Claims or Lost Opportunity Claims: It All Has to Be Honest

Claims or Lost Opportunity Claims: It All Has to Be Honest

The Supreme Court has this week handed down judgment in Perry v Raleys Solicitors [2019] UKSC 5, a much-anticipated decision on the court’s approach to causation and quantum where the claimant’s claim is that the breach of duty has caused him to lose an opportunity he would allegedly otherwise have had.

Below, Richard Gould, associate at BLM that acted for the successful solicitor defendants Raleys Solicitors, discusses the case and the evaluation of alleged opportunities lost.

The shorthand description for this type of claim is as being for the loss of a chance – rather easier to say than sometimes to evaluate. Guidance is given in Allied Maples v Simmons & Simmons [1995] 1 WLR 1602:

  • When looking at what the claimant would have done, that has to be proven on the balance of probabilities – it is for the claimant to establish there is a 51% prospect that they would have taken the ‘initiating step/act’. Once proven the claim proceeds on the basis that this is what would have happened (Issue 1);
  • When looking at what a third party would have done this depends on a loss of chance evaluation – the claim will be subject to a deduction to take account of the likelihood or otherwise of a certain scenario (Issue 2).

Perry v Raleys reinforces that this is the right approach whilst viewing the issues at play very much in a modern setting over 20 years post Allied Maples.

The facts

The claimant, a retired miner, suffered from Vibration White Finger (VWF) caused by excessive exposure to the effects of using vibratory tools. Raleys were the solicitors he instructed to pursue a claim against the Department of Trade & Industry (who assumed the liabilities of British Coal Corporation) to compensate him for that condition. The claim was pursued via a government scheme which had been set up to handle what were volume claims made by miners for VWF and which were administered via a Claims Handling Arrangement (CHA) which aimed to manage those claims effectively and at proportionate cost. Some 170,000 claims were submitted.

A medical examination (MAP1) confirmed if the claimant suffered from VWF and also the severity of the condition. In November 1999 the claimant accepted an offer of £11,600 for general damages in line with the Scheme. No claim was made for services. In order to claim for services (gardening, decorating, DIY, car maintenance, car washing and window washing (“the tasks”)), a claimant had to prove that prior to suffering from VWF he performed the tasks without assistance, but that his VWF condition meant that he could no longer undertake those tasks without assistance.

Nearly 10 years later the claimant issued proceedings against Raleys (in administration since March 2016). He alleged they had failed to give him appropriate advice as to his claim for services and that as a result he had lost the opportunity to claim a services award. He said that his VWF meant that he couldn’t now carry out any of those tasks without assistance and alleged that such assistance was provided by his wife and his two sons. The services claim he alleged he lost was quantified at just in excess of £17,300.

The journey to the Supreme Court

Whilst breach of duty was admitted, other defences loomed large; limitation (which was rejected at the first instance trial) and crucially whether the claimant had suffered any loss.

The claimant gave evidence at trial, as did his wife and his two sons. His Honour Judge Saffman dismissed the claimant’s claim. Given the claimant’s lack of credibility (and that of his family members), his medical records and evidence (photographs from social media etc) of his actual manual capability, the judge was satisfied that the claimant, properly advised, would not have been able to make an honest claim for services. The judge didn’t accept that the claimant required assistance with service tasks because of VWF disability.

Despite dismissing the claimant’s claim on causation, the court proceeded to assess the prospects of success of the claim for services, in the event that it had been made, at 80%. This high percentage was reflective of the low evidential thresholds inherent in the CHA.

The claimant’s appeal to the Court of Appeal was successful – the judgment at trial was overturned. However the trial judges’ findings on quantum were adopted – meaning the claimant was awarded just over £14,500 plus interest and costs. Raleys (in administration) appealed.

The decision of the Supreme Court

The Supreme Court very much took this claim back to first principles; indeed back to the approach in Allied Maples. In doing so it rejected the Court of Appeal’s criticisms of the trial judge’s approach and reinstated what it described as a careful…detailed and lucid judgment at the trial.

One of the key reasons the Supreme Court came to this decision, was that it rejected the Court of Appeal’s criticism of the way the defence of the claim had been run, describing it as a trial within a trial. The rationale behind this rejection, was that a forensic investigation and an adversarial trial of what the claimant would have done is justified, especially as if the claimant reaches the threshold of 51% (and the burden of proof is on the claimant) the court proceeds on the basis that is what would have happened (as per Issue 1). Similarly, if the Claimant falls short of this threshold then the burden of proof is not discharged and the claim fails – it’s an all or nothing position.

The trial judge had added when looking at Issue 1 that it must be an honest claim for services. The Supreme Court wholeheartedly agreed. Further, if a bare nuisance value claim is outside the scope of lost claims for the recovery of damages then so surely must be dishonest claims.

With respect to the approach in relation to what a third party would have done (Issue 2), this analysis is based on loss of chance principles and the Supreme Court said …it is generally inappropriate to conduct a trial within a trial. Really, it’s all about prospects. So, in an action about the lost chance to pursue a claim against insurers for an indemnity in relation to a fire claim the court did not have to decide, in a trial within a trial, whether the fire had been started deliberately – the court simply had to assess the prospects of the claimant resisting the allegations of arson (as was the case in Hanif v Middleweeks – with the chance being put at 25%). As far as the Supreme Court was concerned here the claimant never even got to this stage – his claim failed at Issue 1 as he couldn’t have made an honest claim.

Looking ahead

The approach in Allied Maples is described by the Supreme Court as a …sensible, fair and practicable dividing line…Unsurprising then that it adopted the reasoning in it wholeheartedly. So whilst not really anything new Perry v Raleys is an affirmation of these principles.

Despite the welcome guidance here tensions remain. We may get more clarity from the Supreme Court appeal in Edwards v Hugh James Ford Simey [2018] EWCA Civ 1299 which is due to be heard in July 2019 and again arises from a mishandled VWF claim although with a focus on the issue of what evidence is admissible (especially as to evidence that would not have been available at the notional original trial date).

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