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Damages in loss of chance claims against solicitors

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Posted by Susan Hopcraft on 03 September 2014

Susan Hopcraft Partner

Solicitors acting for a structured credit salesman who had been working for JP Morgan failed to lodge a court document in time. This prevented their client from appealing an employment tribunal decision that had gone against him.

The solicitors admitted negligence and the court therefore needed to assess the value of what the client had lost as a result. This July 2014 decision summarises how the courts go about that. 

Background

The dispute between Mr Chweidan and solicitors Mishcon de Reya began in 2008, when Mr Chweidan instructed the firm to take on his unfair dismissal claim against his former employer, JP Morgan. Mr Chweidan was made redundant following a skiing accident which left him disabled. The employment tribunal at first instance found he had been unfairly dismissed and ruled that JP Morgan had acted unlawfully and discriminated against him on the basis of his disability. Mr Chweidan was awarded in excess of £550,000.

JP Morgan appealed successfully in 2011. As a result, Mr Chweidan’s award was reduced significantly. Mishcons lodged a cross-appeal on Chweidan’s behalf but failed to do so in time. As a result of this the claimant lost his chance to cross appeal, and was awarded just £68,000 for his unfair dismissal and left with a costs bill far in excess of that sum. 

Claim in professional negligence

Mr Chweidan made a professional negligence claim against his solicitors for his lost opportunity to cross-appeal. Mishcons accepted blame for the late cross-appeal, but denied that their breach had caused the claimant to suffer any loss as the cross-appeal had no more than negligible prospects of success. The court was therefore left to consider whether the admitted negligence had caused any loss and if so, the value of the loss.  

Mrs Justice Simler summarised her approach to this issue as follows:

  • The claimant must prove that the claim had more than a negligible prospect of success.
  • If the court decides that the claimant’s chances were more than merely negligible then it must make a realistic assessment of what would have been the claimant’s prospects of success had the original litigation been fought out.
  • The court should then assess the likely level of damages the claimant would have received, then apply an appropriate fraction to reflect the various uncertainties of litigation.
  • In some loss of chance cases it may be appropriate to view the prospects on a fairly broad basis, whilst in other cases it may be appropriate to look at the prospects in greater detail. 
  • The oral and documentary evidence available (and whether or not it is more limited than what would have been available in the action) and the possibility that the claim might have settled are features that must be factored into any assessment. It is wrong in any event for the court to conduct a trial within a trial.
  • If there are “separate hurdles”, the percentage prospects on each should be multiplied together to give an overall percentage prospect. 

Assessment

The judge evaluated the claimant’s total prospects at 18%.This was calculated on the basis that he had a 50% chance of winning the age discrimination cross-appeal, and a 33% chance on the underlying claim following the appeal. This gave a 16% chance, which was nominally increased on the basis that, if the claimant won his cross-appeal, JP Morgan’s attitude to the case may have changed in the claimant’s favour (presumably making settlement more likely).

The claimant was awarded 18% of his £357,574.86 total claim against his solicitors, plus interest, amounting to just over £66,000.

Conclusion

If a solicitor has missed a deadline, such as a limitation date or an appeal deadline, and a court action has been lost as a result, the court needs to assess the value of that lost chance. Yet that depends on so many factors. More documents might be located, additional witnesses might come forward, the parties’ willingness to settle may flex, different judges and tribunal members see things different ways and of course the law changes sometimes in unexpected ways. Each aspect altering even slightly could provide infinitely different outcomes at trial. The approach adopted by the courts in the six steps above is therefore a practical way forward, even if the sum awarded in any loss of chance case will remain difficult to predict with any precision.

About the author

Susan is a disputes and professional negligence lawyer, mainly in the financial services sector.

Susan Hopcraft

Susan is a disputes and professional negligence lawyer, mainly in the financial services sector.

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