Supreme Court Decision On 'Lost Litigation' Issues

The Supreme Court has given judgment on an important case dealing with the always complex analysis of causation and loss of chance principles in a case relating to a lost opportunity to pursue a claim against a third party. In this briefing we consider the case and its implications.

Background

The Claimant, Mr Perry, had worked as a miner between 1966 and 1994 and had developed Vibration White Finger ("VWF") as a result of using vibratory tools at work. In 1996, Mr Perry instructed the Defendants, Raleys Solicitors ("Raleys"), to pursue a claim for damages against the Department for Transport and Industry ("DTI"), which had assumed the liabilities of the National Coal Board. In 1999 DTI established a compensation scheme for VWF and Mr Perry's claim was subsequently pursued under this scheme. In November 1999 Mr Perry's claim was settled for £11,600. The severity of Mr Perry's VWF meant that he was entitled to an award for services, if he had previously carried out tasks such as gardening, DIY or car maintenance (the "Services Claim"). However, Mr Perry's settlement did not include any damages for a Services Claim.

Mr Perry pursued a negligence claim against Raleys, alleging that Raleys had negligently failed to advise him of the possibility of pursuing a Services Claim and, therefore, his claim had been settled at an undervalue. Shortly before the trial, Raleys admitted negligence but argued that their negligence had not caused Mr Perry any loss. The judge found that Mr Perry could still perform the relevant services without assistance and so could not honestly have pursued a Services Claim. Mr Perry's claim was dismissed on the basis that, if Raleys had advised on the Services Claim, Mr Perry would not have pursued it.

The Court of Appeal allowed Mr Perry's appeal on the basis that: (1) the trial judge was wrong in his analysis of whether Raleys had caused Mr Perry any loss and (2) the trial judge made various errors in considering the evidence, leading him to find incorrectly that Mr Perry had been ineligible to pursue a Services Claim. Lady Justice Gloster added that there were public policy reasons that supported her decision, stating in particular that "it is far too easy for negligent solicitors, or perhaps more pertinently, their insurers, to raise huge obstacles to claimants... the latter are required, effectively to prove in the litigation against solicitors that they would have succeeded in making such a claim against the third...