Loss of a chance – where are we now?

1. The concept of ‘loss of a chance’ is relevant to the assessment of damages when a negligent omission by a professional leads to the loss of a valuable business opportunity or the loss of a valuable claim.
2. Understanding the loss of a chance principles is of critical importance to those instructed on professional negligence claims since the greater the number of ‘chances’ that are in play the greater the impact on the claimant’s damages.
3. This article examines the approach the court will take when it assesses the counter factual of the likely chance of the occurrence of a hypothetical event, the event being conditional on the defendant having acted in a non-negligent way.
4. Where a claimant’s loss depends on what they would have done absent negligence, then this must be proved by the claimant on the usual balance of probabilities. However, to the extent that the supposed beneficial outcome depends on that a third party would have done, the claimant need only show that they had a ‘real and substantial chance’ of achieving a better outcome than was in fact was achieved. A real and substantial chance can be as low as 10%.
5. Two (relatively) recent cases shed some light on the application of the principles.
6. In Bugsby Property LLC v LGIM Commercial Lending Ltd [2022] EWHC 2001 (Comm) the court awarded damages of £14,980 to a claimant who had lost the chance of acquiring an exhibition centre when a commercial lending group which it had approached for funding breached an agreement giving exclusivity to the claimant in relation to the possibly acquisition.
7. The court (Robin Knowles J) held that it was a near certainty (90%) that the seller would have been prepared to sell the exhibition centre to the claimant. It was also a near certainty that the claimant would have been able to finance its bid. However there was a competing purchaser Y in the running. The chance that the claimant would have run the race was 40%.
8. To assess the loss of a chance the court quantified the value of the acquisition, debt arrangement and annual investment fees it had lost and multiplied that figure by 90% and then by 40% resulting in an overall result of 36% rounding to 35%. It can be seen therefore that the damages figure can come down quite drastically when there a number of multiplicands. If there are three multiplicands of 60% for example the result is only 21.6%.
9. In Brearley v Higgs & Sons [2021] EWHC 2635 (Ch) a firm of solicitors had been negligent in failing to advise a senior executive that his pursuit of a business opportunity (a franchise) on his own account put him at risk of breaching his obligations in his contract of employment.
10. However, that negligence had not caused the executive to lose the chance represented by the opportunity; even if he had been competently advised it was unlikely he would have acted differently, and therefore there was no real chance of that opportunity coming to fruition since his there was no substantial chance of his employer consenting to him taking the franchise.
11. The timely warning to claimants in the Brearley case is that you can win on liability, but still lose on causation and damages if the ‘chance’ that you lost was not a substantial one.

Article by John de Waal KC