This preview shows page 1. Sign up to view the full content.
Unformatted text preview: f
probabilities. It has come to be recognized that a chance that an event will occur which is beneficial to the plaintiff is a right which has value.56 Sometimes this is termed 'loss a chance'. Closely connected are the cases where there is a 'loss of opportunity'. Loss of
opportunity, although it is certainly an opportunity cost, it is not to be confused with
opportunity cost in general. All losses of a commercial opportunity can be considered
opportunity costs, but not all opportunity costs are losses of a commercial opportunity.57 U n d e r the "balance of probability" test, cases where the plaintiff lost a chance which
itself had less than 50% probability of a successful outcome would be treated as having nothing of value, incurring no loss, and thus failing to prove a cause of action. Starting
1911, though, the common law began to attribute value where the loss was a chance to
gain a benefit. In Chaplin v Hicks (1911) the House of Lords recognised that a loss of a
chance to win in a contest, or to gain a valuable right, was a chance for which some
people would pay money and was valuable in itself. This has led to courts addressing a
number of related issues including the valuation of chances where there are lost
CO c ommercial opportunities, where the chance is a chance to recover from an injury misdiagnosed by a physician,59 or the chance is the chance to recover damages in 54 Hamer,D. 1999, p. 3.
The terminology in the courts is unfortunate, for courts in the past have not used "probability" in a
mathematical sense, making discourse on this subject difficult between economics and the c ommon law.
The value of a chance can be explained through option theory. A n option upon a benefit gained through a
contingent event is the basis for option theory, but the courts have not analysed common law disputes in
this way. This will be discussed further in Chapter Ten.
This depends, of course, on whether one defines "commercial" in the wide sense as any profitable
undertaking, whether personal, business related or otherwise.
Sellars v Adelaide Petroleum NL. and Others; Poseidon Ltd. v Adelaide Petroleum N.L. and O
(1994) 179 C.L.R. 332, (1994) A.T.P.R. 41-301; Nexus Minerals v Brutus Constructions Pty. Ltd. & A
(unreported)  F C A 926
Naxakis v Western and General Hospital and Anor.  73 A.L.J.R.782; Hotson v Fitzgerald [198
W.L.R. 1036; Hotson v East Berkshire Area Health Authority [ 1987] 2 All E.R. 908.
55 215 litigation, which w a s prevented by the professional negligence of firms of solicitors. These issues are hypothetical, for the court must assess what the position of the plaintif
would have been if the defendant had not committed the act, for which s/he is being held responsible by the plaintiff. The losses claimed by the plaintiff normally divide into pre trial losses, and post-trial losses. The future-oriented post trial losses, and hypotheti pre-trial losses are normally assessed differently than the pre-trial losses which actua
occurred. The hypothetical past, and future losses incorporate probabilistic thinking and
raise a number of controversial issues. Pre-trial and Post-trial Loss Assessment
"The past has already happened and is, in principle, knowable. The future, on the other
hand, is a matter of chance, and is a far less certain object of knowledge".61 The past
events occurring prior to trial are either proven to the requisite standard or they are
the court is satisfied that their occurrence was "more probable than not" then they are treated as certainly having occurred. If it is considered "more probable than not" that th
losses were caused by the defendant, the defendant is treated as having caused the whole
loss. When losses include future elements, the common law fails to elucidate a consistent
framework of principle which is both workable and applicable in wider curial
application. The cases reveal that the courts resort to a proportional assessment of the future damages If it is concluded that a plaintiff will need, say, an operation in the future which costs 50 Johnson vPerez; Creedv Perez [1988-1989] 166 C.L.R. 351.
Hamer, D. 1999, p. 2. There is, as Hamer points out, an asymmetry in the knowledge of time between the
knowable past and the unknowable future. This asymmetry is too often overlooked and presumed rather
than addressed openly in case judgments.
61 216 today's terms, $30,000, but only on a 4 0 % probability, then it is likely that only 4 0 % of
the entire amount will be awarded.
T he role of the court in making an assessment of damages which depends upon its v iew as to what
will be and what would have been is to be contrasted with its ordinary function in civil actions of
determining what w as. In determining what did happen in the past a court decides on the balance
of probabilities. Anything that is more probable than not it treats as certain. But in assessing
damages which depend upon its v iew as to what will happen in the fu...
View Full Document