Court of Appeal allows claim for "loss of a chance" damages where claimant failed to establish causation on a balance of probabilities

In a claim for inducing a breach of contract, the Court of Appeal held that a football agent could claim damages for the lost chance of earning commission on a player's transfer, even though he could not establish that he was more likely than not to have been paid the commission if it hadn't been for the breach. The case was remitted to the High Court to determine the value of the lost opportunity: Anthony McGill v Sports & Entertainment Media Group & 8 Ors [2016] EWCA Civ 1063.

Although this case does not establish new law, it is a useful example of the courts' willingness, in certain circumstances, to award damages for the "loss of a chance" where the claimant's loss depends, not on what it would have done, but on the hypothetical acts of a third party. Where the court is satisfied that a real and substantial chance was lost, even if it is less than 50%, damages will be quantified in percentage terms depending on the courts' assessment of the relevant chance.

The decision provides an interesting contrast with the Court of Appeal's decision in Law Debenture Trust Corporation PLC v Elektrim SA [2010] EWCA Civ 1142 (see our blog post) in which it appeared to advocate a more restrictive approach to assessing damages on a "loss of a chance" basis in commercial claims.

James Leadill, an associate in our dispute resolution team, considers the decision further below.  Another aspect of the decision, giving guidance on the circumstances in which a settlement agreement with one defendant may also discharge claims against other defendants, will be considered in a separate blog post.

Factual background

The claimant was (and is) a licensed football agent. His claim concerned an alleged oral contract with former professional football player Gavin McCann (the "Player") to act as his exclusive agent for the negotiation of an improved contract either with his then employer, Aston Villa FC, or a new club, prior to the end of the August 2007 transfer window. The main defendants were a rival agency ("SEM") and Bolton Wanderers FC.

In summary, the claimant alleged that he negotiated the transfer of the Player from Aston Villa to Bolton, on terms which Bolton indicated it would be willing to accept. However, before completion of this transfer, SEM (and some of its employees) induced the Player to breach his contract with the claimant and completed the transfer themselves on substantially the same terms as those negotiated by the claimant, thereby earning a £300k commission and depriving the claimant of the commission promised him under his oral contract with the Player. The claimant brought various claims against the Defendants including for inducing breach of contract and unlawful means conspiracy.

The claimant's claim against the Player for breach of contract was settled in a separate action in 2009, some three years before the present claim was issued.

It is relevant to note that under the FA's Football Agents Regulations (then in force), any representation contract between a licensed agent and either a club or player had to be made in writing. Whilst these Regulations had no statutory force, in practice the claimant would have been unable to obtain payment of any fee due to him under an oral contract, unless he had entered into a written agreement with the Player before the conclusion of the transfer.

At first instance, the judge held that the claimant had failed to make out any of the causes of action asserted. The judge held that the claimant had not established his case as there was less than a 50% chance that by the close of the transfer deal his oral agreement with the Player would have been reduced to writing, so as to comply with the Regulations and allow him to claim his promised commission. The judge did not consider that it was open to the claimant to pursue a "loss of chance" claim as it had not been pleaded that way.

The claimant appealed on various grounds, including that the judge erred when finding that it was necessary for him to prove on the balance of probabilities that the Player would have signed a written representation agreement. The correct analysis, he said, was that the defendants' actions meant he had lost the chance of entering into a written representation agreement and therefore earning the commission. As the chance of entering this written agreement was real and substantial, it should be assessed by the judge on a percentage basis, notwithstanding the judge's conclusion that this chance was less than 50%.

Legal background

There was no dispute as to the principles to be derived from the two leading cases concerning loss of a chance: Allied Maples Group Limited v Simmons & Simmons [1995] 1 WLR 1602 and, more recently, Wellesley Partners LLP v Withers LLP [2015] EWCA Civ 1146, [2016] 2 WLR 1351.

Henderson J (with whom Lord Jones LJ agreed) reviewed these authorities and identified the key relevant principle as:

"where the claimant’s loss depends, not on what he would have done, but on the hypothetical acts of a third party, the claimant first needs to prove (to the usual civil standard) that there was a real or substantial, rather than a speculative, chance that the third party would have acted so as to confer the benefit in question, thereby establishing causation; but … the evaluation of the lost chance, if causation is proved, is a matter of quantification of damages in percentage terms".

Decision

The Court of Appeal allowed the appeal. The present case fell within the principles enunciated in Allied Maples and Wellesley on the basis that the claimant's loss depended on the hypothetical actions of a third party, namely the Player. It was equally clear, the court said, that the threshold test of causation was "comfortably satisfied"; there must have been a real or substantial chance that, but for SEM's interference, the Player would have entered into a written agreement with the claimant, even though the judge's finding (on a balance of probabilities) that the Player would have refused to enter a written contract should not be disturbed.

The court also overturned the finding that it was not open to the claimant to pursue his claim on a "loss of a chance basis". A reference in the re-amended particulars of claim to the claimant having "suffered loss and damage in the loss of opportunity to be paid the agent's fee on the transfer" was sufficient to permit the claimant to claim damages on a "loss of a chance" basis.

The case was remitted to the High Court to determine the value of the lost chance, which could not (in light of the judge's finding on the balance of probabilities) be more than 50%.