Bown v Las Direct Ltd

In a negligent-reference claim, loss of a chance requires evidence of a real and substantial chance, rather than speculation. Where causation depends on the claimant’s own hypothetical conduct, the claimant must prove it on the balance of probabilities. Where it depends on what a third party would have done, a real and substantial chance is sufficient, but the evidence must support that inference. A claimant cannot introduce an entirely new basis for quantifying damages after a full trial, particularly where the pleaded and evidential basis had been challenged during the trial. The court should determine the case within the parameters on which it was tried.

Mr Peter Norman Bown claimed damages from Las Direct Ltd for negligent employment references given to prospective employers in the financial services industry. The references stated that he owed LAS £16,678.50, although the trial judge found that the proper debt was approximately £4,500–£5,500.

The Central London County Court found negligence in overstating the debt and held that there was a real and substantial chance that the smaller debt could have been resolved, enabling future employment. It adjourned the assessment of damages for further evidence after rejecting the claimant’s pleaded basis of quantification. LAS appealed both the causation finding and the adjournment. Mr Bown sought permission to cross-appeal on contractual and related issues.

1. Appeal allowed; permission to cross-appeal refused. The causation finding was unsupported by evidence. The court distinguished between two hypothetical questions. If the claimant relied on his own conduct, he had to prove on the balance of probabilities that he would have discharged the debt. If he relied on prospective employers taking over the debt, he had to show a real and substantial chance of that occurring.
2. The evidence showed only that a lower debt might improve employment prospects. It did not establish a real and substantial chance that Mr Bown or a prospective employer would settle the debt. Evidence from actual prospective employers or of relevant market practice was not invariably required, but was required in the circumstances of this case.
3. The judge was also wrong to adjourn the matter for a new assessment of damages. The claimant had deliberately advanced a particular basis of quantification, that basis had been challenged at trial, and it had failed. Introducing a wholly new basis after the trial was effectively permitting a new case to be pleaded. The observations of Lord Griffiths in Ketteman v Hansel Properties Ltd and the approach in Stuart v Haywood supported that conclusion.
4. The court upheld the trial judge’s conclusions on the cross-appeal. The June 1991 letter validly exercised LAS’s contractual discretion over payments after the first 12 months. The alleged irrationality challenge had not been raised below. The contract did not provide for paid holiday, and the relevant debt provisions applied to Mr Bown’s indebtedness because the exemption concerned the creditor’s business, not the employee’s particular role. It was not negligent to include the debt in the reference, particularly given the duty to provide a full and frank reference recognised in Spring v Guardian Assurance Plc.
5. The formal order was: appeal allowed; cross-appeal dismissed. Costs of the trial were remitted to the trial judge, with separate orders concerning the appeal and permission application.

• Court of Appeal (Civil Division): [2001] EWCA Civ 1798 — LAS’s appeal allowed on causation and assessment of damages; permission to cross-appeal refused.
• Central London County Court: judgment of His Honour Judge Hallgarten QC — negligence established in overstating the claimant’s debt; loss of a chance found; damages adjourned for further evidence.