962 by yaosaigeng

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									962. Loss of opportunity.
Where a breach of contract deprives the innocent party of the chance to receive a
particular benefit1, or to avoid a particular risk2, damages may be awarded for the
loss of that chance3. The mere fact that damages are hard to assess, or
impossible to assess with certainty or precision, does not justify a refusal to
award them4. Nor is it a defence that the gain of the benefit, or the avoidance of
the risk, would have depended on the volition of an independent third party, for
such a contingency does not by itself make the assessment of damages
impossible5. An innocent party who is contractually entitled to belong to a
particular class of contestants, and is unlawfully debarred therefrom, can
therefore recover for the loss of the chance to succeed at the contest and to gain
the promised benefits6. An innocent party who, by reason of negligent advice
from his professional adviser, is disabled from taking precautions against the
incidence of some liability, or denied the chance of inflicting some liability on
another, can recover damages to reflect the prospect that the liability would have
been avoided or imposed7.
1
     Chaplin v Hicks [1911] 2 KB 786, CA.2        Allied Maples Group Ltd v Simmons & Simmons [1995]
4 All ER 907 at 918, [1995] 1 WLR 1602 at 1613, CA, per Stuart Smith LJ, where he rejected a
contention that damages were awardable only for loss of an opportunity to receive some valuable
benefit and could detect no difference in principle between the chance of gaining a benefit and the
chance of avoiding a liability.3     Chaplin v Hicks [1911] 2 KB 786, CA; Sellars v Adelaide Petroleum
NL (1994) 179 CLR 332, Aust HC; Allied Maples Group Ltd v Simmons & Simmons [1995] 4 All ER
907, [1995] 1 WLR 1602, CA; Obagi v Stanborough (Developments) Ltd (7 April 1995, unreported),
CA; Stovold v Barlows (a firm) [1995] NPC 154, [1996] PNLR 91, CA; First Interstate Bank of
California v Cohen Arnold [1996] PNLR 17, (1995) Times, 11 November, CA; Hartle v Laceys (a firm)
(28 February 1997, unreported), CA. The availability of damages is not confined to contracts involving
games of chance, sporting contests or other competitions and extends to contracts to provide 'a
commercial advantage or opportunity': Sellars v Adelaide Petroleum NL (1994) 179 CLR 332, Aust HC.
See also Fink v Fink (1946) 74 CLR 127, Aust HC (contract to provide opportunity for reconciliation).
The principles which govern this form of damages are essentially the same whether the claim lies in
'contract or tort': Sellars v Adelaide Petroleum NL supra; Doyle v Wallace (1998) Times, 22 July, CA
(personal injury depriving plaintiff of new career opportunity).4     Chaplin v Hicks [1911] 2 KB 786 at
791–792 per Vaughan-Williams LJ, and at 795–796 per Fletcher Moulton LJ, CA; Fink v Fink (1946) 74
CLR 127, Aust HC; Sellars v Adelaide Petroleum NL (1994) 179 CLR 332, Aust HC. The fact that the
prospects of ultimate success may be less than 50% does not mean that they are incapable of
objective evaluation: Allied Maples Group Ltd v Simmons & Simmons [1995] 4 All ER 907 at 930,
[1995] 1 WLR 1602 at 1626, CA, per Millett LJ; Commonwealth of Australia v Amann Aviation Pty Ltd
(1991) 174 CLR 64, 104 ALR 1, Aust HC (as cited in Sellars v Adelaide Petroleum NL (1994) 179 CLR
332, Aust HC). In Commonwealth of Australia v Amann Aviation Pty Ltd supra the prospect of a
renewal of the contract between the plaintiff and the defendant, although purely at the defendant's
option, was taken into account for the purposes of the principle that a defendant who, in response to a
claim for reliance loss, alleges that the plaintiff had made a bad bargain, must prove that the original
contract would have been unprofitable to the plaintiff if performed: see para 989 post. For criticism of
this point see Treitel 'Damages For Breach of Contract in the High Court of Australia' (1992) 108 LQR
226.5     Chaplin v Hicks [1911] 2 KB 786 at 799, CA, per Farwell LJ. In exceptional cases, however,
the loss may be so dependent on the unrestricted volition of another person that it is impossible to
identify any assessable loss flowing from the breach: Chaplin v Hicks supra at 792–793 per Vaughan-
Williams LJ.6     Chaplin v Hicks [1911] 2 KB 786, CA. Sapwell v Bass [1910] 2 KB 486 and Watson v
Ambergate Nottingham & Boston Rly Co (1851) 15 Jur 448 must now be read in the light of Chaplin v
Hicks supra. See also, for earlier decisions, Richardson v Mellish (1824) 2 Bing 229; The Empress of
Britain (1913) 29 TLR 423.7       Allied Maples Group Ltd v Simmons & Simmons [1995] 4 All ER 907,
[1995] 1 WLR 1602, CA; followed in Hartle v Laceys (a firm) (28 February 1997, unreported), CA;
Stovold v Barlows (a firm) [1995] NPC 154, [1996] PNLR 91, CA; First Interstate Bank of California v
Cohen Arnold [1996] PNLR 17, (1995) Times, 11 November, CA. See also Davies v Taylor [1974] AC
207, [1972] 3 All ER 836, HL; Obagi v Stanborough (Developments) Ltd (7 April 1995, unreported),
CA. Allied Maples Group Ltd v Simmons & Simmons supra is the leading modern authority on this
subject and earlier cases on professional advisers (as indeed on the loss of opportunity generally)
must now be read in the light of it: see eg Barnett v Cohen [1921] 2 KB 461; Otter v Church, Adams,
Tatham & Co [1953] 1 Ch 280, [1953] 1 All ER 168; Hall v Meyrick [1957] 2 QB 455, [1957] 2 All ER
722, CA; Kitchin v Royal Air Forces Association [1958] 2 All ER 241, [1958] 1 WLR 563, CA; Yardley v
Coombes (1963) 107 Sol Jo 575; McGrath v Kiely and Powell [1965] IR 497; Cook v Swinfen [1967] 1
All ER 299, [1967] 1 WLR 457, CA; (handling of litigation); Malyon v Lawrence Messer & Co [1968] 2
Lloyd's Rep 539, (1968) 112 Sol Jo 623; Sykes v Midland Bank Executor & Trustee Co [1971] 1 QB
113, [1970] 2 All ER 471, CA; Dickinson v Jones Alexander & Co [1993] 2 FLR 521; Martin Boston &
Co v Roberts [1996] PNLR 45, (1995) Times, 17 March, CA. Cf Yeoman's Executrix v Ferries 1967 SLT
332.
UPDATE
962 Loss of opportunity
NOTE 3—Damages for wrongful dismissal can include compensation for the loss of
the opportunity to pursue an unfair dismissal claim: Raspin v United News Shops
Ltd [1999] IRLR 9, EAT.NOTE 7—Kitchin v Royal Air Forces Association, cited,
applied in Harrison v Bloom Camillin (1999) Times, 12 November (court could
take into account possibility of settlement of lapsed action). See also Charles v
Hugh James Jones & Jenkins (a firm) [2000] 1 All ER 289, CA (court could be
assisted by knowledge of medical evidence at date of trial); and Dudarec v
Andrews [2006] EWCA Civ 256, [2006] 2 All ER 856.

964. Evaluation of chance distinguished from remoteness and causation.
The evaluation of a prospect which fails to materialise following a breach of
contract is subordinate to two other matters. Firstly, the innocent party must
show (in accordance with normal principle1) that the loss of the chance was
sufficiently within the parties' contemplation as a serious possible consequence of
the breach when the contract was made2. Secondly, the innocent party must
show that the loss of the chance was caused by the breach 3. The proof of
causation varies according to the type of wrong and the form of loss alleged 4.
Distinctions must be drawn between wrongs of commission and wrongs of
omission, and between hypothetical acts of innocent parties and third parties,
respectively5.
1
     As to the normal principle see para 1015 post.2     Chaplin v Hicks [1911] 2 KB 786 at 798, CA,
per Farwell LJ, at 790–791 per Vaughan Williams LJ, and at 794–795 per Fletcher Moulton LJ.
Chamberlain v Boyd (1883) 52 LJQB 277 is probably best explained on this ground: see McGregor on
Damages (16th Edn, 1997) para 377. For a modern application of the rules of remoteness in this
context see Hartle v Laceys (a firm) (28 February 1997, unreported), CA.3      Allied Maples Group Ltd
v Simmons & Simmons [1995] 4 All ER 907 at 914–916, [1995] 1 WLR 1602 at 1609–1611, CA, per
Stuart-Smith LJ. As to causation in contract generally see paras 1035–1040 post; and CONTRACT.4
Ordinarily the issue of causation is governed by the general standard of proof in civil actions: Sellars v
Adelaide Petroleum NL (1994) 179 CLR 332, Aust HC. This would require a plaintiff to show on a
balance of probabilities that he had sustained some loss or damage. But the loss of a commercial
advantage or opportunity, which has been shown to possess some value beyond that which is
negligible, may suffice for this purpose: Sellars v Adelaide Petroleum NL supra.5     Allied Maples
Group Ltd v Simmons & Simmons [1995] 4 All ER 907 at 914–916, [1995] 1 WLR 1602 at 1609–
1611, CA, per Stuart-Smith LJ. This is the leading judgment in the field and has been followed in the
following decisions: Hartle v Laceys (a firm) (28 February 1997, unreported), CA; Stovold v Barlows
(a firm) [1995] NPC 154, [1996] PNLR 91, CA; First Interstate Bank of California v Cohen Arnold
[1996] PNLR 17, (1995) Times, 11 November, CA; Doyle v Wallace (1998) Times, 22 July, CA
(personal injury causing loss of a career opportunity). See also Obagi v Stanborough (Developments)
Ltd (7 April 1995, unreported), CA (decided before Allied Maples Group Ltd v Simmons & Simmons
supra). The following decisions must now be read in the light of the decision in Allied Maples Group
Ltd v Simmons & Simmons supra or of observations therein: Otter v Church, Adams, Tatham & Co
[1953] 1 Ch 280, [1953] 1 All ER 168; Griffiths v Evans [1953] 2 All ER 1364, [1953] 1 WLR 1424,
CA; Hall v Meyrick [1957] 2 QB 455, [1957] 2 All ER 722, CA; Kitchen v Royal Air Force Association
[1958] 2 All ER 241, [1958] 1 WLR 563, CA; Yardley v Coombes (1963) 107 Sol Jo 575; Fraser v BN
Furman (Productions) Ltd [1967] 3 All ER 57, [1967] 1 WLR 898, CA; Davies v Taylor [1974] AC 207,
[1972] 3 All ER 836, HL; Dunbar v A & B Painters Ltd [1985] 2 Lloyd's Rep 616 (affd [1986] 2 Lloyd's
Rep 38, CA); Lillicrap v Nalder & Son [1993] 1 All ER 724, [1993] 1 WLR 94, CA; Spring v Guardian
Assurance plc [1995] 2 AC 296, [1994] 3 All ER 129, HL. See also Hotson v East Berkshire Area
Health Authority [1987] AC 750, [1987] 1 All ER 210, HL; Norwest Refrigeration Services Pty Ltd v
Bain Dawes (WA) Pty Ltd (1984) 157 CLR 149, 55 ALR 509, Aust HC, as discussed in Sellars v
Adelaide Petroleum NL (1994) 179 CLR 332, Aust HC.


968. Evaluation of the opportunity.
In evaluating the lost opportunity, regard is paid to the circumstances at large1,
and in particular to those contingencies which would have affected the course of
events had the breach not occurred2. The full value of the benefit not received, or
the full cost of the risk incurred, will be reduced in proportion to the degree of
likelihood that the benefit or risk would have been gained or avoided 3. The
percentage ascribed to the chance will reflect any mixed or split contingency
(requiring conduct by both innocent party and third party in order for the
prospective benefit or avoidance of risk to be realised)4 and any double
contingency affecting the conduct of either of those parties 5. Account may be
taken of the value of any residual contractual subject matter left in the innocent
party's hands after the breach6.
1
     Allied Maples Group Ltd v Simmons & Simmons [1995] 4 All ER 907, [1995] 1 WLR 1602, CA.2
Allied Maples Group Ltd v Simmons & Simmons [1995] 4 All ER 907, [1995] 1 WLR 1602, CA.3
Sellars v Adelaide Petroleum NL (1994) 179 CLR 332, Aust HC (value of hypothetical commercial
opportunity to be ascertained by reference to degree of probability or possibilities: claim of this nature
not defeated by reply that commercial opportunity was valueless on the balance of probabilities, for
that is to value the commercial opportunity by reference to a standard of proof which is inapplicable).
See also Mallett v McMonagle [1970] AC 166, [1969] 2 All ER 178, HL, cited in Sellars v Adelaide
Petroleum NL supra and in Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 at 640, 92 ALR 545 at 547,
Aust HC, per Brennan J and Dawson J.4       Allied Maples Group Ltd v Simmons & Simmons [1995] 4 All
ER 907, [1995] 1 WLR 1602, CA; Hartle v Laceys (a firm) (28 February 1997, unreported), CA;
Stovold v Barlows (a firm) [1995] NPC 154, [1996] PNLR 91, CA; First Interstate Bank of California v
Cohen Arnold [1996] PNLR 17, (1995) Times, 11 November, CA; Obagi v Stanborough
(Developments) Ltd (7 April 1995, unreported), CA; Doyle v Wallace (1998) Times, 22 July, CA.5          Cf
Stovold v Barlows (a firm) [1995] NPC 154, [1996] PNLR 91, CA (defendant solicitor acting for
prospective vendor wrongfully sent contract documents by document exchange system and not by
post; late arrival and sale not effected; double contingency that contract documents would not have
arrived even if sent by proper means, and that prospective purchaser would still not have bought
plaintiff's property; lost chance assessed at 50%).6     Hartle v Laceys (a firm) (28 February 1997,
unreported), CA (defendant solicitor negligently failed to advise prospective vendor that property
could be sold free of unregistered covenant; covenantee later registered covenant, whereupon sale
then under negotiation lost; court found on balance of probability that vendor would, if properly
advised, have reduced price at which property offered to prospective purchaser or other persons as
incentive for early completion; court further found real and substantial chance that, if vendor properly
advised, sale could have been effected at £375,000 before covenantee discovered non-registration
and registered covenant; loss of chance of sale at that price left vendor with chance of selling property
at indeterminate future time and price; property eventually sold for £150,000; court assessed at 60%
vendor's lost opportunity of selling at £375,000; vendor therefore recovered difference between lost
potential price and price received (ie £225,000) reduced by 40%). Cf Chaplin v Hicks [1911] 2 KB
786, CA, distinguished in Hartle v Laceys (a firm) supra per Ward LJ, where the plaintiff had nothing
left after the chance was lost. See further First Interstate Bank of California v Cohen Arnold [1996]
PNLR 17, (1995) Times, 11 November, CA (accountants negligently misrepresented client's financial
strength to bank which, relying thereon, made and (at client's request) later extended loan to client,
thereby failing to take early opportunity to sell property on which debts secured; bank proved on
balance of probability that it would have put the property on the market immediately if truth known;
court found real and substantial (ie 2:1) and not fanciful or speculative chance that bank would have
got higher price than it actually got when sale finally made; bank awarded 66% of difference between
prospective price and price received).

UPDATE
968 Evaluation of the opportunity
TEXT AND NOTES—Where a solicitor's negligence has caused a claim to be struck out
because the issues cannot be fairly tried, the starting point for the judge who has
to assess the claimant's prospects of success but for the solicitor's negligence is
the conclusion that no trial is possible: Sharif v Garrett & Co (a firm) [2001]
EWCA Civ 1269, [2002] 3 All ER 195. See also Dixon v Clement Jones Solicitors
(a firm) [2004] All ER (D) 127 (Jul), CA.

								
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