Sharpe v Addison (t/a Addison Lister)

In a solicitor-negligence claim for loss of a litigation chance, the court must first decide whether the lost claim had real and substantial value. A claim is not worthless merely because it might ultimately have failed, and the court should not turn a proposed oral trial into a paper mini-trial. If the threshold is met, the chance must be valued realistically, taking account of likely damages, contributory negligence, litigation risk and any realistic prospect of settlement. Overlapping assessments must not double count the same facts. Uncertain future earnings should be assessed by reference to earning capacity and checked against the conventional multiplicand-and-multiplier approach.

The claimant suffered serious injuries after being struck by a taxi. His solicitor issued proceedings against the driver but gave the insurers notice under the Road Traffic Act 1988 one day late. The insurers were consequently no longer liable to indemnify the driver, who could not satisfy a judgment, and the action was discontinued.

The claimant sued the solicitor for loss of the chance to recover damages. On 25 November 2002, the High Court, before His Honour Judge Langan QC sitting as a deputy High Court judge, dismissed the claim on the basis that the underlying action was worthless. The appeal concerned the real prospect of success, the valuation of the lost chance after contributory negligence, and the assessment of future loss of earnings.

The appeal was allowed unanimously. Lord Justice Rix gave the principal judgment. Lord Justice Chadwick agreed with the analysis of the real prospect and valuation issues, and Lord Justice Simon Brown agreed with the material reasoning and the result.

1. Real value of the lost claim. The claimant had to show that the underlying action was a chose in action of real and substantial value, rather than merely negligible or nominal. The burden on the solicitor to show that the claim was worthless was particularly heavy because he had advised that proceedings should be brought. The principles in Kitchen v Royal Air Force Association [1958] 1 WLR 563, Mount v Barker Austin [1998] PNLR 494, Sharif v Garret & Co [2002] 1 WLR 3118 and Hatswell v Goldbergs [2001] EWCA Civ 2084 supported that approach. The road-accident claim had a real prospect of success, despite the substantial contributory negligence and the possibility of total failure.
2. Assessment without a paper mini-trial. The court should assess the lost opportunity in its proper trial context. Where oral evidence would have been tested, it should not conduct a documentary mini-trial. The threshold was closely analogous to the question under Civil Procedure Rules 1998 Part 24.2 whether a claim had no real prospect of success. The evidence concerning speed, braking, warning and the taxi driver’s opportunity to avoid or reduce the accident required a trial assessment.
3. Valuation of the chance. The lost chance was the chance of recovering the net value of the personal-injury claim, not the full value before contributory negligence. A finding of at least 75 per cent contributory negligence was inevitable. A further discount for the risk of failure on primary liability was permissible, but liability and contributory negligence substantially overlapped because both depended on causation. The court therefore rejected mechanical multiplication of separate discounts and made a global assessment of 10 per cent of the claim’s quantum value. Chadwick LJ explained that the likely prospect and amount of a compromise or payment into court may also be relevant.
4. Future earnings. Rix LJ held that uncertainty about the claimant’s artistic career did not justify reducing future loss to a nominal figure. A global assessment should be checked against the multiplicand-and-multiplier approach discussed in Cornell v Green. The past-loss award of £30,000 remained unchanged, but future loss was increased from £70,000 to £170,000. The total award was increased from £279,272.12 to £379,272.12 as at July 1997, producing a total claim of just over £500,000 after interest and an award of just over £50,000 at 10 per cent.

The respondent was ordered to indemnify the appellant for the appellant’s costs liability to the original defendants. Costs arguments were to be submitted on paper if not agreed.

1. Court of Appeal (Civil Division): On 23 July 2003, the appeal was allowed: [2003] EWCA Civ 1189.
2. High Court, Queen’s Bench Division: On 25 November 2002, His Honour Judge Langan QC sitting as a deputy High Court judge dismissed the claimant’s loss-of-chance claim.