Sharpe v Addison (t/a Addison Lister)

LORD JUSTICE RIX: This is an appeal from the judgment of His Honour Judge Langan QC and arises from an action for damages for professional negligence against a solicitor. I can take the essential background from the helpful introduction of the learned judge's own judgment.

The appellant, Micah Sharpe, who sues by his mother and litigation friend, Christine Cunningham, was crossing a road on foot when he was struck by a taxi and suffered serious injuries. He consulted the respondent, Michael Addison (trading as Addison Lister), who caused a writ to be issued against the driver of the taxi for damages for personal injuries caused by his alleged negligence.

The driver was covered by a valid motor insurance policy. Under sections 151 and 152 of the Road Traffic Act 1988 the driver's insurers would be liable to indemnify him in respect of a judgment obtained by Mr Sharpe if, but only if, they were given notice of the action against the driver in due time. Notice had to be given before the issue of the writ or within seven days thereafter. Mr Addison gave notice one day late and Mr Sharpe's right to an indemnity was lost. The driver was not in a position to meet any judgment which might be obtained against him and Mr Sharpe was left with no alternative to discontinuing the action, which he did.

Mr Addison accepts that he was negligent in not giving timely notice of the issue of proceedings to the driver's insurers, but through counsel took issue on the claim on three matters. First, he said that Mr Sharpe's case against the driver was hopeless and that Mr Sharpe had therefore lost nothing of value despite his own, Mr Addison's, admitted negligence, and that the action should therefore be dismissed. Secondly, on the assumption that that first line of defence had failed, the issue arose as to what damages would have been recovered against the driver. The one remaining area of controversy which survives to this appeal relates to the claim for loss of earnings up to the date of a hypothetical trial and thereafter for the rest of Mr Sharpe's life. The third area of dispute related to deductions falling to be made from the damages which Mr Sharpe would have recovered from the driver in the original action. Mr Sharpe accepted that a significant deduction had to be made in respect of an inevitable finding of contributory negligence. Mr Addison maintained, however, that a further deduction must be made to reflect the possibility that Mr Sharpe might not have made good his case on the primary liability of the driver and there was below, and remains on this appeal, an issue as to what that further deduction, if any, should be.

The essential facts relating to the accident were as follows. Mr Sharpe was born on 15 December 1970. The accident occurred on 26 January 1991 when he was 20 years old. The accident happened at night, not long before midnight. It occurred on Derwentwater Road, Gateshead which is a single carriageway road 7.4 m wide at the relevant point. The evidence established that the road was damp. The taxi driver was approaching around a sweeping left-hand bend. On the other side of the road, ahead of the taxi driver, was a bus stop. Mr Sharpe, together with his friend Richard White and their respective girlfriends, had been waiting at that stop for a bus. When the bus came the girls were seen on to the bus and the two friends started to cross the road at the rear of the bus just as it was pulling away from the stop. The taxi being driven along Derwentwater Road in the direction of that bus stop, but on the other side of the road, was being driven by Ian McKechnie. He had a passenger called Ian Grant. The taxi was travelling at no more than 30 mph in a 30 mph speed limited area. As Mr Sharpe crossed over on to the further side of the road, on which the taxi was travelling, he was struck by the taxi. Mr White, who, unlike Mr Sharpe, had seen the taxi coming and stayed in the centre of the road, was not injured.

Within a week of that accident those three witnesses (that is to say the friend, Mr White, the driver, Mr McKechnie, and the passenger, Mr Grant) had given either an interview or witness statements to the police. They agreed that the responsibility for the accident was Mr Sharpe's in that he had continued into the path of the taxi when it was too late for the driver to do anything about it. However, Mr Sharpe himself had no recollection of his accident and could provide no information about it. None of the other witnesses (that is to say the friend, Mr White, the driver, Mr McKechnie, and the passenger, Mr Grant) were called to give evidence at the trial below on the ground that after twelve years since the time of the accident, they could not be expected to recall the precise sequence of events which had led up to it. The judge therefore assessed the evidence on the basis of the written material.

Mr Sharpe suffered a head injury which has left him with a degree of brain damage. He has not been able to work since the accident. He lives on his own in a flat but receives a lot of support from his mother and other members of his family.

I now turn to describe the facts relating to the original litigation against the driver, Mr McKechnie. The first thing that happened after the accident was that in March of that year, 1991, Mr Sharpe's mother went to a firm of solicitors called McKeags whose advice was that the claim would not succeed. They wrote a pessimistic letter of advice to that effect on 18 March 1991. It was over two years later, in August 1993, that Mr Sharpe's mother consulted Mr Addison on the claim. His advice was more positive. On 11 August 1993 he wrote to the area director of the legal aid authorities with a request for legal aid to obtain counsel's opinion. The letter reviewed the essential facts relating to the accident as they appeared from the interview and statements taken by the police. The letter continued:

Legal aid was granted to obtain counsel's advice and on 15 November 1993 Mr Jonathan Bennett, counsel then of eight years' call, wrote a preliminary advice in which he expressed whole-hearted endorsement of the contents of Mr Addison's letter and went on to state that a driver who has seen two pedestrians hesitating on the central white line should take some effective warning or evasive action in order to try to avoid an accident. His advice also reviewed the evidence deriving from the police interview and statements, and in particular the fact that the driver stated that he had first seen the two young men when he was only about 15 yards from them. The advice went on to refer to Mr Sharpe's responsibility for the accident and stated that on any view, including that of his friend Mr White, as was plain from Mr White's statement, he was clearly at fault in attempting to cross without making certain that it was safe to do so. The advice went on to say:

On the the basis of this advice, legal aid to bring the action was obtained and the writ was issued on 6 January 1994. Unfortunately, Mr Addison's section 152 notice to the driver's insurers was sent one day late on 14 January 1994. In those circumstances, leave to join those insurers was permitted on 15 June 1994. The action then appears to have entered a long period of dilatoriness and it was only on 26 August 1999 that the court ordered split trials, with a trial on liability to take place on 6 December 1999.

During the run-up to that date fresh counsel, Mr Richard Furniss, was consulted. In an opinion dated 26 October 1999 he advised that, because the driver had disappeared and was in any event not worth powder and shot, and because unfortunately the driver's insurers could not be made liable, the claim should be discontinued since it was on those practical grounds valueless. What was more, given the error over the section 152 notice, there was a conflict of interest between Mr Addison and his client, Mr Sharpe, which should be addressed. Mr Furniss' opinion did not pass upon the underlying merits of the negligence claim against the driver but in a note of conference with which we have been supplied, dated the previous day, 25 October 1999, it is clear that Mr Furniss thought that that "there would be at least 75% contributory negligence". So it was that, come the trial date of 6 December 1999, the action was discontinued.

This secondary action against Mr Addison has been conducted on the basis that if the original litigation had been properly conducted, the trial on both liability and quantum would have been concluded by 31 July 1997. At that time Mr Sharpe was 26.

I turn then to the first of the three issues identified by the judge which are still live on this appeal, which is whether Mr Sharpe's case against the driver was hopeless. In this connection, the principles to be derived from the authorities are in themselves not in dispute. A leading case is that of Kitchen v Royal Air Force Association [1958] 1 WLR 563, in which Lord Evershed MR said at 575:

I can then go forward to 1998 to the case of Mount v Barker Austin [1998] PNLR 494 where at 510 Lord Justice Simon Brown expressed the applicable principles as follows:

The other two judges in that case did not refer expressly to that statement of principle but in the subsequent case of Sharif v Garret & Co [2002] 1 WLR 3118, those principles were adopted by the full court, as being both applicable and admirably summarised. In that case Lord Justice Simon Brown himself went on to say, at paragraphs 38-39, as follows:

Finally I would refer to the case of Hatswell v Goldbergs [2001] EWCA Civ 2084 (unreported, 11 December 2001), a case in which this court did find that the underlying claim was of no value but where Sir Murray Stuart-Smith said this at paragraph 49 by way of contrast to the facts of that case:

In the light of those general principles the parties, by their counsel, have put before this court a number of cases in which those principles have been applied, amongst them cases where the court held that the underlying claim was of no value. I mention them briefly. There was Mount itself, but there the underlying claim depended upon the wording of a bank guarantee. It was the court's view upon that wording that the claimant had no claim of any value. Casey v Hugh James Jones & Jenkins [1999] Lloyds Rep PN 115 was a case about a claimant who had been walking at night along a railway line when he was struck by a train carrying lights and travelling at only 6 mph. The court considered that in those circumstances the claimant's own responsibility was so all-embracing as to exclude the prospect of any liability or recovery on his claim. I have already mentioned the case of Hatswell, a case of medical negligence where, however, on what was described as a very narrow issue which was covered by detailed medical records, this court agreed with the trial judge that the claim was of no value.

By contrast, an example of a claim of meagre value which nevertheless succeeded in obtaining at any rate 20 per cent redress for the claimant is that of Hanif v Middleweeks [2000] Lloyd's Rep PN 920, a case concerning a claim under an insurance policy, to which I will refer later on a separate issue.

I turn then to the way in which the judge dealt with this first issue below and to the submissions which arise on this appeal.

The judge first of all reminded himself of the relevant principles by reference to Lord Justice Simon Brown's restatement of them in Mount. He also recorded the frank acknowledgment of Mr Bacon (who appeared below and does again on this appeal on behalf of Mr Addison) that there was a heavy evidential burden on his client. Nevertheless, following his review of the material deriving from the police interview and statements, he concluded that the claim was worthless. He reviewed that evidence in full, first of all by reference to Mr McKechnie's interview, then by reference to Mr White's statement and finally by reference to the statement of Mr Grant, the passenger. But what ultimately had greatest weight with him was the evidence of all three of those witnesses that when the driver first saw the two young men emerge from the rear of the bus, he was only some 10 or15, or 20, or 10 to 20 yards from them, to cite the three estimates mentioned by the three witnesses. He therefore considered that, albeit the driver had time to see the two young men hesitating at the centre of the road and had time to see that whereas one of them (Mr White) stopped, the other ultimately kept on going, he was unable to brake until he was, in essence, on top of Mr Sharpe.

In this connection the judge referred to the figures, derived from the highway code, that at a speed of 30 mph the shortest stopping distance was 23 metres. He rejected the submissions made by Mr Spencer QC (who appeared below and again on this appeal on behalf of Mr Sharpe) that, first, the driver should, when he saw the bus at the stop, have been alert to the possibility that there might be pedestrians about, although then unseen, attempting to cross the road and, secondly, that the judge had taken no account of the fact, to which the evidence of Mr White and Mr Grant bears witness, that the driver had not had regard to the circumstance that Mr Sharpe had not initially looked in the direction of and thus seen the taxi, albeit the driver's evidence was that both young men had looked at him.

On this appeal Mr Spencer renews those submissions. He also relies upon the firm advice given by both Mr Addison himself and counsel, Mr Bennett, and on that basis the admission of this claim to legal aid support. He also submits that if the driver's speed had been reduced, either as a precautionary measure upon first seeing the bus, or by reason of braking as soon as the young men first came into sight, it does not follow that, even if some accident was still unavoidable, Mr Sharpe would have been hit at the same speed in the same place of the road or with the same severe consequences as actually occurred.

On the other hand, Mr Bacon submitted that the judge had come to the right result for the right reasons. He also sought to discount the original advice given by Mr Addison and Mr Bennett by reference to the fact that there is no express reference in their opinions to the highway code stopping distance at a speed of 30 mph, which carried so much weight with the judge.

In my judgment, however, it cannot be said that Mr Sharpe's claim was of no real value or of only negligible or merely speculative or nominal or nuisance value, or was worthless. All these expressions have been used at one or other time in the cases, but they are all intended to mean and to aim at the same thing and concept. It is true that on the meagre evidence contained in the police interview and statements there does not appear to be any particular controversy as to the essential underlying facts of the case. But the basic facts remain these. On a night when the road was damp, in a 30 mph speed area, a car comes around a bend and sees a bus at a bus stop on the other side of the road. The car was travelling perhaps just within the speed limit, but at about the speed limit. The car does not slow upon seeing the bus to allow for the possibility that some passengers may have disembarked from it and may be about to appear from behind it, as it sets off, on their way across the road. At a certain point, however, the driver sees that that is exactly what is happening. The two young men were not ex-passengers from the bus but companions of their girlfriends whom they had just handed on to the bus, but that makes no difference in principle.

At this point, travelling at 30 mph, it may be that it is already too late to avoid some kind of accident, as the judge thought. But that is to assume a braking distance for a car at 30 mph. At 20 mph, as the highway code figures make clear, the braking distance is very different. Even at 30 mph, a hand poised upon a horn (because of the sight of a bus at the bus stop) may have led to a different outcome. The evidence was that the friend who saw the taxi held back in the centre of the road whereas Mr Sharpe, who on the evidence of two of the witnesses did not see the taxi, went on. He may not have done so if he had heard a horn from a taxi that he did not see. In any event, at a slightly different speed, with a horn sounded in time, an accident, even if unavoidable, may have been less serious. In these circumstances, although one firm of solicitors had advised that the case was indeed hopeless, this respondent, Mr Addison, had advised that it was not, counsel had agreed, and the legal aid authorities had also been persuaded. That is not to say that there was not plainly, as everyone concerned has acknowledged, a high degree of contributory negligence or that the case, if fought out to a conclusion, may not have resulted in total failure for Mr Sharpe, but that is a different question.

I fear that in these circumstances, although the judge was aware of and sought to apply the correct principles, he was tempted, perhaps by the very fact that the case was presented to him as an entirely documentary exercise, to conduct a mini-trial on paper. But the trial, if it had taken place, would not have been conducted on paper. The taxi driver and his passenger would have been challenged along the lines indicated by counsel's submissions and the possibilities adverted to in this judgment.

Nowadays, under the CPR regime a defendant can apply to strike out a claim at its inception on the basis that it has no real prospect of success: see Part 24.2. The test of a worthless claim for loss of a chance purposes seems to me to be very similar to that modern test. If the question is asked in these terms, whether a case such as this would be struck out under CPR Part 24.2, it seems to me that it would not. To do so would have involved the court seeking to turn what has ultimately to be a trial on oral testimony into a paper exercise, something which modern authorities on CPR Part 24.2 repeatedly warn the courts against.

The matter can also, in my judgment, be tested by reference to the underwriters' likely response if they had remained on the Road Traffic Act hook of a section 152 notice. It is difficult to think that they would not have made some more than merely nominal payment into court. Of course they would have discounted the claim very significantly on the grounds of contributory negligence and also, no doubt, on the ground which figured so largely in the judge's reasons, namely the issue of whether there was anything the driver could possibly have done to have avoided or mitigated the accident. But it is in my opinion far-fetched to think that they would have proceeded to trial without the protection of some real payment in.

I therefore turn to what I have described above as the final area of dispute, the question of how in percentage terms this claim, which in my opinion was something of real value, is to be valued in the context of this litigation against the negligent solicitor. There are in effect two issues here. One is whether the question of liability and the question of the extent of contributory negligence are to be assessed separately and cumulatively so as to drive down in two separate stages the value of the lost chance; and the other is what in any event is the right percentage of value to place on the lost chance, however it is derived.

On the question of separate evaluations of different issues, I would first refer to a handful of cases which have been put before us which illustrate the problem. In Hanif a claim against fire insurers was met by three separate defences. One issue related to a condition precedent, one issue related to the familiar insurance defence of non-disclosure, and the third issue was one of fraud. The judge held that the claimant would have had an 80 per cent chance of success on the first of those issues, a 60 per cent chance on the second of them and a 25 per cent chance on the third, the issue of fraud. However, overall, he put out of mind his assessments on the first two issues and awarded a loss of chance recovery at the rate of 25 per cent. There was an appeal, in which the appellant submitted that the judge should have multiplied those percentages, to derive an ultimate figure of 12 per cent, on the basis that each issue represented a separate and cumulative hurdle. This court held, however, that although the three issues were three separate hurdles, nevertheless there was a certain amount of interplay between them. For that reason it would not have been right simply to have multiplied the percentages mathematically, which would have resulted in a recovery of only 12 per cent. Looking at the matter globally, this court decided to reduce the judge's assessment of 25 per cent to an ultimate figure of 20 per cent.

Jones v Hibbert Pownall & Newton (unreported, 26 March 2002) was, like this, a claim for negligence against solicitors arising out of a personal injury claim in which there were issues both as to liability and contributory negligence in the original litigation. McCombe J held that he ought to discount the damages which would have been awarded in the event of total success by 10 per cent to take account of the real possibility of a finding of some contributory negligence, and also assessed the overall value of the claim at 60 per cent. The effect of that was that he multiplied those two assessments together to give a recovery of 54 per cent of the damages found. Mr Bacon relies upon that authority as being in his favour on the first of the two issues which arise under this heading.

Mr Spencer, however, although he accepts (under a certain amount of pressure from the court) that the issue of contributory negligence is separate from the ultimate issue of liability and indeed one does not get to the question of contributory negligence until liability is established, nevertheless submits that since both issues are concerned with responsibility and causation for the accident there is a high level of overlap between them.

I would agree with both that acknowledgment and that submission, particularly, it seems to me, in a case where the degree of contributory negligence is high. It is obvious that if one simply multiplied the discounts for contributory negligence and for the establishment of liability together, there would be grave danger of counting the same considerations twice over. Therefore, I would not accept Mr Bacon's submission that, for instance, to a discount of 75 per cent on grounds of contributory negligence, one should make a further discount of another 75 per cent on the basis that there was only a one in four chance of establishing liability. On that basis the ultimate figure for which Mr Bacon was contending was thus 6.25 per cent.

In my judgment, this matter can be approached in two ways and perhaps it is well to do so as a means of cross check. First of all one can ask the question, is it absolutely plain that a certain degree of contributory negligence must have been established in this case, whatever might have been the position on liability? In this connection, I remind myself that the original counsel, Mr Bennett, spoke of contributory negligence of up to 75 per cent and replacement counsel, Mr Furniss, spoke of contributory negligence of at least 75 per cent. For myself I would agree that contributory negligence of at least 75 per cent was an inevitable finding in this case. It then follows that the real area of dispute is between something above zero per cent -- that question has already been determined on issue 1 -- and 25 per cent. In my judgment, I would assess the percentage within those parameters as something less than half: say 40 per cent. Less than half, on the basis that ultimately it seems to me that this would have been a very difficult case for Mr Sharpe to win, to establish liability against the driver; but not as low as Mr Bacon's 25 per cent on the basis that one goes below a figure of 40 per cent one is in grave danger of duplicating the same factors as have already been taken into account in saying there must be contributory negligence of at least 75 per cent.

I next test that result in this way. What, taking all factors into account, both the first necessity of establishing liability and the problem of contributory negligence, is the right percentage at which to establish the value of this claim? That is, after all, ultimately the goal at which this process is aiming. Counsel even more than judges have daily familiarity with that question. They have daily familiarity with the case which raises many different issues and where they are asked to advise their client in terms which their client can easily understand and act upon, a form of bottom line: What does counsel think this case is worth in percentage terms of the monetary claim? It seems to me that, taking the factors of both liability and contributory negligence into account, this was a case of more than negligible value but which would have been extremely difficult for the claimant to win for the reasons canvassed by the judge in his judgment. I would value overall the claim at 10 per cent of its quantum value. That is the same as 40 per cent of 25 per cent.

I therefore turn finally to issue 2, where the one surviving controversy which remains as a matter of quantum concerns the level of lost earnings. The judge awarded £30,000 for a period of over six years between January 1991 and the nominal date of trial, 31 July 1997, in respect of past lost earnings, and a further lump sum of £70,000 in respect of a future lifetime of lost earnings. Mr Sharpe was 20 at the time of the accident and as at July 1997 was 26. Mr Spencer submits that the judge was wrong to approach the question of lost earnings on a pure lump sum basis. He did so on the ground that at the time of his accident Mr Sharpe was at the beginning of an A-level course in the history of art. He had left school at 16 with several CSEs and a single GCSE O-level. He had worked for a certain time for a signwriting business but had lost this job with the failure of that business. He then had a period of unemployment before returning to college. He had what the judge described as "vaguely artistic ambitions". He had a certain artistic talent and definite artistic interests but no definite plans and "just wanted to live as an artist".

Mr Spencer, however, refers this court to the case of Cornell v Green (unreported, 20 March 1998), in which there was discussion about global lump sum, so-called Smith v Manchester, awards of this kind. In particular, the judgment of Robert Walker LJ in that case warned that if the Smith v Manchester approach is to be used not only in its narrower application to assess the additional loss which is inherent in the difficulties of finding new employment if old employment is lost, but is also applied to a wider field, where the attempt is made to assess loss of earnings over a whole lifetime on the basis that such an assessment is very difficult to do in other than a lump sum way, nevertheless it is dangerous to do so without looking over one's shoulder to some degree at the classic assessment of such damages by means of multiplicand and multiplier.

In the present case it is agreed that a multiplier of 17 is appropriate for this young man as from July 1997. Mr Bacon nevertheless submitted that a multiplicand was still impossible to arrive at. Here, in effect, was a young man of vague artistic ambitions. In one conference with counsel in August 1993, when asked about his plans, he had merely replied that he had been a student at art college and had no fixed plans. At another conference a few weeks later he said he had no definite plans, he just wanted to live as an artist. That was the comment picked up by the judge in his judgment. Mr Bacon also relied on a passage in the report of 29 September 1993 from Mr James Buchanan, orthopaedic surgeon, that:

However, in my judgment Mr Spencer's submissions have weight. Mr Spencer sought to submit that a multiplicand of something over £15,000 should be adopted on the basis of figures, which he was able to put before us, relating to artists, commercial artists, and graphic designers. The new earnings survey figure for average gross earnings of £409 a week for that category is reflected in Mr Spencer's £15,542 per year figure. However, I think that is too optimistic. I would accept that the judge was entitled to have in mind that Mr Sharpe's future career was uncertain and, in as much as he had an avowed interest, it was directed towards an occupation where uncertainties multiply. Nevertheless, Mr Sharpe had his lifetime before him. He was otherwise a not unintelligent and healthy young man. In those circumstances, I think the judge's award of £70,000, which if viewed in multiplier and multiplicand terms reflects a multiplier of only a little over £4,000 per year, puts the matter far too low. For myself, I would adopt a figure of £10,000 a year, giving a figure for loss of future earnings not of £70,000 but of £170,000. I would, however, not change the figure of £30,000 down to trial. Mr Sharpe had artistic ambitions. He had taken himself back to college for further study. He would no doubt have attempted to make good his artistic ambitions. During his early and mid-20s this may have meant that his earnings were meagre, but at some stage or other I consider that he would either have had to be able to make a go of his artistic talent or else would have sought out some more than nominal financial support in some other direction.

In sum, therefore, I would increase the judge's total award of £279,272.12 as of July 1997 to a figure of £379,272.12. The interest on that I have not been able to calculate to its ultimate conclusion but it is, it seems to me, a figure of something like £125,000. Counsel can no doubt identify that figure in due course. Ultimately, therefore, the total claim is a figure of something just over £500,000. Applying my figure of 10 per cent, that would give an award of something over £50,000.

LORD JUSTICE CHADWICK: The claim in these proceedings is for damage for the loss of a chance: as it is put in paragraph 20 of the particulars of claim:

In the present case it is not in dispute that the defendant failed to do what he ought to have done as the claimant's solicitor in proceedings, or contemplated proceedings, against Mr McKechnie; that is, he failed to give notice of the claim within time to Mr McKechnie's insurers. In those circumstances, it is not in dispute that if, prior to the failure to give that notice within time, the claimant had some prospect of recovering damages from Mr McKechnie, the claimant lost that prospect by reason of the defendant's default. That was not because the failure to give notice affected the prospect of obtaining judgment against Mr McKechnie; but rather because the failure to give notice led to the position that Mr McKechnie's insurers were no longer liable to indemnify Mr McKechnie or to satisfy any judgment against him that might have been obtained.

The first question, therefore, is whether the claimant had some real prospect of obtaining a judgment against Mr McKechnie. It is accepted that, if he had a real prospect of obtaining judgment, then the defendant's failure to give notice has caused him loss: it being common ground that, if the notice had been given, the judgment would have been satisfied, directly or indirectly, by the insurers.

I agree with Lord Justice Rix, for the reasons that he has given, that the claimant did have a real prospect of obtaining judgment against Mr McKechnie; that is to say, there was a real prospect that Mr McKechnie would have been held liable in respect of the loss suffered by the claimant as a result of the accident on 26 January 1991.

The second question, then, is what value should be attributed to that which the claimant has lost. That, as it seems to me, requires consideration of two factors. First, in what sum would judgment have been given if the earlier proceedings had proceeded to trial. And, second, what discount, if any, should be applied to that sum in order to reflect the uncertainty (inherent in any litigation to a greater or lesser degree) that a claim which has a real prospect of success may nevertheless, in the event, fail?

That is not to suggest that the value to be attributed to the loss of a chance in a litigation context is necessarily to be determined by reference only to those two factors. It is only a minority of personal injury claims that do, in fact, proceed to trial. Many, indeed most, claims which are thought by insurers (where a party is insured) to have a real prospect of success are compromised by agreement or by the acceptance of monies paid into court before they come to trial. Whether or not that would be likely to happen in the particular case (and if so, in what sum the claim would be compromised) is a factor to take into account. But, in deciding whether or not that would be likely to happen, it will normally be relevant to consider the two factors which I have already identified. That is because if parties, their insurers and their respective advisers are to make rational decisions as to compromise, as to payment in, and as to acceptance of payment in, they will take those two factors into account.

In considering the amount in which judgment would have been given had the claim proceeded to trial and the defendant had been held liable, it is necessary to consider whether (and, if so, what) contribution in respect of damages suffered by the claimant would have been required of the claimant himself under the Civil Liability (Contribution) Act 1978. It is necessary to consider that because the extent to which the claimant would himself have been held responsible for the loss he suffered would affect, directly, the amount for which judgment would be given. In the present case, it has to be recognised -- and it is recognised by the claimant through his counsel in this court -- that, to a substantial extent, this claimant would have been held responsible for his own loss. I agree with Lord Justice Rix that a discount of at least 75 per cent on the grounds of contributory negligence would have been appropriate -- indeed, probably inevitable -- in this case.

The assumption that judgment would have been given in an amount which reflects a 75 per cent contribution by the claimant reflects, of course, an assumption that the defendant to the earlier proceedings would have been held liable in respect of damage suffered by the claimant. What further discount, if any, should be allowed in order to reflect the real possibility that the defendant would not have been held liable at all?

It is important to keep in mind that, if any further discount is allowed, it must take account of the discount for contributory negligence. The further discount is not to reflect the fact that the claimant would not have obtained judgment in 100 per cent of the sum claimed. That has already been reflected in discounting for contributory negligence. The question is: what was the chance that the claimant would not recover even 25 per cent of the amount which he claimed?

In a case such as the present, where both liability and contributory negligence would have turned on the single question of causation, the discount for the one is closely linked to the discount for the other. The greater the discount for contributory negligence, the greater the chance that the claimant would have recovered that discounted amount. It is possible to take the two matters together and reach a single figure; and, like my Lord, I find that is a useful check. For my part, I would agree with him that the right overall figure is rather by discounting down to 10 per cent; that represents a discount of 75 per cent discount attributable to contributory negligence, and a further discount of 60 per cent (of the remaining 25 per cent) to reflect the chance (40 per cent) that the driver of the taxi would not have been held liable at all. But there are, of course, other ways of reaching the same end figure. For example by discounting 70 per cent for contributory negligence and assessing the chance as one in three; or 80 per cent for contributory negligence and an evens chance. At the end of the day, the question is: what was the claim worth?

I agree, therefore, with the overall discount which Lord Justice Rix has proposed; and I agree with his analysis of the amount to which that discount should be applied.

LORD JUSTICE SIMON BROWN:

That salutary and much-quoted dictum from Megarry J's judgment in John v Rees [1970] 1 Ch 345 at 402 is generally invoked in the context of natural justice challenges based on procedural improprieties. It is invoked to meet the defence that, however fairly the claimant had been treated, the decision would still have gone against him. But why should it not be prayed in aid here too to meet this respondent's plea that his negligence cost the appellant nothing, since his claim was in any event bound to fail? Here too the defendant's negligence has cost his client the chance of establishing the contrary; here too he is likely to feel resentful if the solicitor who first supported his claim then escapes liability on the basis that the claim was in fact worthless.

The essential chronology of this case is as follows. On 26 January 1991 the claimant suffered grave injuries when struck by a taxi as he crossed the road. On 15 November 1993 counsel instructed on the claimant's behalf advised that he had a good claim in negligence against the taxi driver, albeit subject to a very substantial finding of contributory negligence. Counsel "wholeheartedly" endorsed his instructing solicitor's, ie the respondent's own, view, expressed to the Legal Aid Board, that the merits of the case justified the grant of a legal aid certificate. Counsel had "no hesitation in recommending that proceedings be issued in due course".

On 6 January 1994, following the grant of legal aid in the light of those advices, the writ was issued. Through the defendant's negligence, however, the driver's insurers were not notified of the proceedings in time and so it was that eventually the claim came to be discontinued, the driver himself being in no position to satisfy any judgment.

It is common ground that, had the action been properly conducted, it would have been heard on 31 July 1997. Following his preliminary advice, the same counsel advised twice more, respectively in July 1994 and July 1997. Both those further advices were concerned principally with trying to overcome the difficulties brought about by the defendant's negligence. Neither of them, however, hinted for a moment that the claim could in any event be regarded as worthless: on the contrary. In the last of them counsel said in terms, "My advice as to the strengths of Mr Sharpe's arguments on liability have not really changed since I advised on 15th November 1993."The appellant's original action having been discontinued, he sued his solicitor for losing him the chance of having succeeded upon it, whether by judgment or settlement. On 25 November 2002 that claim was dismissed by Judge Langan QC below.

True it is, as Mr Bacon submits, that the court may reject a loss of a chance of action on the basis that the underlying claim had been bound to fail, notwithstanding the claimant's previous legal adviser's view as to the contrary. Such indeed was the position in Casey v Hugh James Jones & Jenkins [1999] Lloyd's Rep PN 115. It is important to note, however, that the legal aid board there had itself discharged the claimant's certificate and that the negligence of the defendant's solicitors lay in failing to advise the claimant as to the consequences of that discharge and to make representations on appeal. In my judgment, for reasons to which I shall come, it would not often be appropriate to value as nil a lost claim which the negligent solicitor had himself earlier advised should be brought. As I observed in Mount v Barker Austin [1998] PNLR 494, 510:

There may, of course, be cases where the defendants fail to satisfy the evidential burden. Mount v Barker Austin itself was one such. But note the very special circumstances of that case, reflected in my regretful conclusion that the principles I had outlined could not avail that particular appellant:

Here, by contrast, the appellant's underlying claim was based on a road accident. There was no issue of law involved and no contemporary documents which were "wholly inconsistent" with his case. Lord Justice Rix has already explored the evidence available and I am happy to agree with his analysis. It would have been a brave insurer, had he been properly put on notice of this claim, who would have felt able to guarantee its total rejection, bearing in mind not least that it was publicly funded and, therefore, implicitly supported by a favourable legal opinion. At the very least, some reasonable settlement offer might have been expected.

I have already referred to the advice which this appellant received from his solicitor and counsel, advice which Mr Bacon now recognises he must stigmatise as plainly negligent if he is to make good his case that the appellant's underlying claim was bound to fail. The unattractiveness of the argument needs no emphasis. The same solicitor who advised that legal aid be granted and who then personally profited from that grant, having forfeited the claim through his own negligence later asserts that his earlier optimistic advice was itself negligent too. Let me repeat here, as I did in Mount v Barker Austin, what Diplock LJ said in Allen v Sir Alfred MacAlpine & Sons Ltd [1968] 2 QB 229 at 256-257:

The judge below correctly directed himself, consistently with Mance LJ's judgment in Hanif v Middleweeks [2000] Lloyds Rep PN 920 at 924, paragraph 29, that he must not attempt to try the original litigation. To my mind, however, he came altogether too readily to the view that the chances of success in that original litigation were so remote as to be worthless. At the very least there was a doubt as to whether or not the original claim was doomed to inevitable failure and, as I observed in Sharif v Garrett [2002] 1 WLR 3118, 3128-9, the benefit of any such doubt had to be given to the appellant.

Holding, as I would, that the original action had a real prospect of success, it becomes necessary to embark on the second stage of the process of determining the value of the lost chance: see paragraph 38 of my judgment in Sharif which Lord Justice Rix has already set out. What was lost was the chance not of recovering the full value of the claim on a 100 per cent liability basis but rather of recovering 25 per cent of that value, a finding of 75 per cent contributory negligence being, as my Lords have indicated, the best outcome for which this appellant could possibly have hoped.

What then was the value of the lost chance of recovering 25 per cent of the full value liability of the claim? On this issue, as also with regard to the question of what was the full liability value of this claim, I am in full agreement with all that Lord Justice Rix has said. I agree too with Lord Justice Chadwick's approach to the process of discounting required in a case such as this. I too therefore would allow the appeal with the result already proposed by my Lords.