Australia: High Court Rules Out Damages For Loss Of A Chance

Introduction

On 21 April 2009 the High Court handed down its judgment in Tabet v Gett. The Court was required to rule on the validity of awarding damages for "loss of a chance" – where a defendant's negligence deprives the plaintiff of an opportunity of avoiding loss or damage, but falls short of being causative of such loss or damage under the principles of legal causation.

Recent years have seen an increased frequency of damages being awarded for loss of a chance, commonly in medical liability cases where misdiagnosis or delay in diagnosis deprived the patient of an opportunity to receive treatment which may have resulted in an improved outcome. However, the concept of damages for loss of a chance is not limited to medical liability cases. There is authority, for example, supporting the proposition that damages may be awarded for loss of business opportunities in cases of commercial wrongdoing.

Facts

Reema Tabet, aged 6 at the time, was admitted to hospital on 11 January 1991 with symptoms including headaches and vomiting. She came under the care of Dr Gett, a paediatrician, who initially considered her to be suffering symptoms of resolving chicken pox and possibly meningitis. On 13 January Tabet exhibited a number of abnormal neurological signs. On 14 January her neurological condition deteriorated further and she had a seizure. A CT scan was performed and a brain tumour diagnosed. Tabet underwent surgery and other treatment but was left with significant brain damage.

Lower court decisions

At first instance, Studdert J of the NSW Supreme Court found that Dr Gett had breached his duty of care by failing to order a CT scan on 13 January, but was not persuaded that the discovery of the tumour on 13 January would have led to Tabet being treated in a manner which would have avoided the brain damage which occurred on 14 January. Therefore, he was not satisfied that the damage had been caused by Dr Gett's negligence.

However, Studdert J did find that, had the tumour been detected by a CT scan on 13 January, treatment would have commenced prior to the deterioration on 14 January and Tabet would have had a chance of a better outcome. On this basis, he determined that Tabet was entitled to damages for loss of a chance.

In assessing damages, Studdert J found that the deterioration on 14 January contributed 25 per cent to Tabet's ultimate disabilities (the other 75 per cent being caused by the tumour, the surgery to remove it and subsequent radiation therapy). Studdert J reduced the damages referrable to Tabet's entire brain injury by 75 per cent to give the proportion of damages referable to the deterioration. Studdert J estimated Tabet's loss of chance of a better outcome, specifically avoiding the damage referable to the deterioration on 14 January by arranging a CT scan on 13 January, to be 40 per cent. He then awarded Tabet damages of 40 per cent of the 25 per cent proportion of damages referable to the deterioration.

Dr Gett successfully appealed to the NSW Court of Appeal which found that damages for loss of a chance could not be awarded and that authorities suggesting otherwise were "plainly wrong". Tabet appealed to the High Court.

High Court decision

In the High Court, the principal argument submitted on behalf of the plaintiff was that the loss of a chance of a better medical outcome, in itself, constitutes damage which gives rise to a cause of action in negligence.

The High Court (comprising Gummow ACJ and Hayne, Heydon, Crennan, Kiefel and Bell JJ) dismissed the appeal unanimously, albeit in five separate judgments.

In his judgment, Heydon J found that the evidence at trial did not allow a conclusion that Dr Gett's negligence had caused the plaintiff to lose a chance of achieving a better outcome. Given this, Heydon J did not need to decide whether, under the law, damages for loss of a chance could be awarded.

The remainder of the court, however, dealt with the loss of a chance issue head on. In doing so, their Honours found that the concept of awarding damages for loss of a chance which was less than probable was quite simply contrary to principles of the common law of negligence in general, and the law of causation in particular. Kiefel J, with whom Hayne, Bell and Crennan JJ agreed in separate judgements, suggested that a chance equated to a mere possibility and that, consequently, the plaintiff could only succeed if the standard of proof was lower than the balance of probabilities standard which the law presently requires and which already allows for 'some uncertainty in proof of causation'.

The High Court also held that there were no pressing policy reasons supporting the adoption of damages for loss of a chance. To the contrary, Gummow ACJ and Crennan J suggested that adoption of the principle for medical liability cases may encourage excessive practising of defensive medicine with emphasis on costly testing procedures. Crennan J also suggested in passing that adoption of the principle may have an adverse impact on the Medicare system and medical indemnity insurance.

In response to the plaintiff's argument that the lost chance in itself constitutes damage which is actionable, the High Court held that medical cases needed to be distinguished from commercial cases in which the loss of a commercial opportunity has been held to be actionable damage. On this issue, Kiefel J stated that in commercial cases, the commercial interest lost may readily be seen to be of value in itself but that the same could not be said of a chance of a better medical outcome or a person's interest in it. In her view, while a commercial opportunity provides a substantial but not merely a speculative prospect of acquiring a benefit, the only value of the loss of a chance of a better medical outcome is derived from the final, physical damage. Gummow ACJ further distinguished some commercial loss of chance cases on the basis that they involved recovery for breach of contract rather than negligence.

Is loss of a chance dead?

The judgments of Gummow ACJ, Kiefel and Crennan JJ were careful to distinguish medical liability cases from commercial cases. Given this, outside the medical liability sphere, the proposition that damages may be awarded for the loss of a chance or opportunity will survive Tabet v Gett.

For medical liability cases, at first blush the High Court's decision would appear to sound the death knell for the awarding of damages for loss of a chance. However, dicta in the judgments of Gummow ACJ, Hayne and Bell JJ do suggest some flickering signs of life for the concept in certain circumstances.

In his reasons, Gummow ACJ stated that the outcome did not require acceptance in absolute terms that loss of a chance in the medical context can never be regarded as constituting damage which is actionable in negligence. Hayne and Bell JJ went further and suggested that other cases involving loss of a chance arising from medical negligence may differ significantly from the said circumstances and gave the example of cases involving a diminution in life expectancy, where empirical evidence was available to substantiate the value of the lost chance.

However, neither Gummow ACJ nor Hayne and Bell JJ expanded on their comments suggesting that medical loss of a chance cases with different circumstances may yield different outcomes. Viewing the High Court's decision as a whole, such circumstances would now seem to be, at most, very limited.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.