Lost chances and lost cases: Hanbury v Hugh James Solicitors
The latest word on “loss of a chance” discounting in lawyers’ negligence claims comes from the recent decision of Mrs Justice Yip in Hanbury v Hugh James Solicitors  EWHC 1074 (QB). The judgment involves an interesting consideration of the extent to which uncertainties in the underlying claim should be reflected in “multiple discounting”.
Mr Hanbury had been a lagger in industrial South Wales for much of his working life, with a fair number of employers. He died after a short illness and at post-mortem the discovery was made that he had been exposed to very substantial amounts of asbestos. The medical conclusion was that this exposure had played a causal role in the development of the lung cancer from which he died. The family instructed specialist industrial injury solicitors, Hugh James, to investigate pursuing a claim against Mr Hanbury’s former employers.
Extensive investigations by Hugh James produced evidence of multiple employers over several decades, but very little positive evidence to establish culpable exposure to asbestos by any of them. There were also some periods in respect of which there was no viable insurance cover and no solvent employer entity to sue. So the claim had significant difficulties. Hugh James instructed an expert chest physician to report on causation, but the firm mistakenly failed to send him a copy or summary of the post-mortem findings. Surprisingly, the expert did not call for them. Instead, he concluded that there was insufficient evidence to attribute the lung cancer to asbestos exposure. Hugh James did not appreciate that the expert’s conclusion was flawed because he had not seen the crucial post-mortem findings.
This expert opinion, coupled with the evidential difficulties in establishing culpable exposure, led Hugh James to advise the family that the claim had poor prospects. They therefore abandoned the claim.
In the professional negligence action the firm admitted at trial that it had acted negligently, but argued for loss of a chance discounting to reflect each of the hurdles the claim would have faced, such as obtaining positive advice from Counsel, AND finding any former employer(s) who could be shown to be liable for culpable exposure, AND who had adequate insurance cover for the relevant period(s), AND who would be prepared to contribute to a settlement, etc.
The “multiple discounting” approach was adopted in two fairly recent High Court authorities.
- In Chweidan v Mishcon de Reya  EWHC 2685 (QB) Simler J multiplied the percentage chances of success for various hurdles to produce an overall assessment of 18% prospects of success for a lost employment tribunal claim.
- In Altus Group v Baker Tilly  EWHC 12 (Ch) HHJ Keyser QC dealt with an accountant’s negligence claim for the loss of a company’s chance to restructure to secure a large reduction in tax liabilities. The Judge multiplied a 60% chance of an HMRC challenge, with a 40% chance of another obstacle being raised, and a 30% chance of success for the claimant in getting over those hurdles. This brought him to an overall 7.2% chance of success, and that was the proportion of the full value of the claim which was awarded.
The Judge in Hanbury rejected that approach as inappropriate. She considered that it involved “building in multiple discounts effectively for the same risks“. Instead, she chose “a relatively broad assessment, looking first at the likely value after trial and then applying appropriate discounts so as to fairly reflect my assessment that this was a claim that was highly likely to be settled before trial“.
The Judge applied a 25% discount to reflect the risk that the various insurers of the former employers might not have agreed to an apportionment approach to compensation (which would have left the claimants substantially under-compensated) – although she said she actually felt the claimants’ chances were probably better than that. She was then persuaded to apply a further 20% discount to reflect the risk that no settlement would have been achieved at all – although she considered this, too, to be “quite generous to the defendant“. Multiplied together, those modest discounts gave the claimants an award of 60% of the “full value” of the lost underlying claim.
This was certainly a victory from the claimants’ perspective, as the perhaps brutal effects of multiple discounting for multiple hurdles were avoided. It is fair to comment that the courts are bound to have natural sympathy for the family of someone who suffered as Mr Hanbury had, and to strain to favour them when there is the benefit of any doubt to be given. Also, the defendant’s evidence had unravelled badly at trial, which again might have influenced the judicial mind in deciding what approach to take.
Ivor Collett appeared for the defendant in this professional negligence trial. Read the judgment here.