Professional Liability And The Loss Of Chance In Quebec

In a recent case,1 the Court of Appeal of Québec reiterated that the application of the "loss of chance theory" is limited and exceptional under Quebec law. According to this theory, a loss of chance can only be indemnified up to the likelihood that this chance will be realized, even if that probability is less than 50%.2 The judge therefore focuses on the chance itself, and compensates in accordance with its degree of probability.3

The facts

In 2006, Cansica Holdings Inc. mandated its lawyers to recover amounts it had loaned to third parties (Debtors). The loans granted totaled $276,300 and were secured, among other things, by an immoveable hypothec.

Although they took some steps to recover this debt, Cansica's lawyers only filed suit on February 17, 2011, after the claim became prescribed on May 5, 2007. The lawyers' fault was therefore admitted, seeing as they recognized having failed to take timely action to interrupt the limitation period of Cansica's right of action.

Owing to this fault, Cansica was claiming, in addition to the value of the loan's capital, over $500,000 in interest and additional indemnity and the fees paid to its lawyers to carry out the mandate, which the parties had set at $15,000.

The Superior Court specified at trial that, to succeed in its claim, Cansica had to show on the balance of probabilities the amount it would have recovered on its loans had it not been for its lawyer's fault. The Superior Court also held that the damages had to be assessed on the date on which the fault was committed, namely the date on which the right of action became time-barred.

Based on these premises, the trial judge concluded that even if its lawyers had acted in due time, Cansica would only have recovered $67,247.67 on the execution of the immoveable hypothec securing the loans seeing as, in the Superior Court's opinion, out of all the property in the debtor's estate only the sale of that immoveable would be likely if the debt were to be realized.

The Superior Court therefore ordered the lawyers to pay $67,247.67 and a further $15,000 in reimbursement of the fees paid, with interest at the legal rate and additional indemnity as of the date of the demand letter.

Dissatisfied with the value of this award, Cansica appealed to have it increased to $812,779.77. Essentially, Cansica argued that the trial judge should have applied the notion of "loss of chance" when determining the damages suffered and thus indemnify it for the...