Loss of a Chance
![handle is hein.journals/vuwlr29 and id is 255 raw text is: Loss OF A CHANCE
Ben Smith
Compensation for the loss of a chance has the potential to revolutionise the law of civil
obligations as it is known today. It is an innovative theory of damages which was first conceived of
at the beginning of this century. It effectively reformulates the damage as the loss of a chance to
which the balance of the probabilities test still applies.lThis is consistent with the orthodox 'all or
nothing' causation rule.2 Its impact however has been delayed and it is only in the last decade'that
its challenge to orthodoxy has become clear. The primary purpose of this paper therefore is to
consider whether or not compensation for loss of a chance represents only a subset of the law of
damages or its complete destruction.
I INTRODUCTION
A Purpose
This paper aims to identify the origins and prescribe the limits of the loss of a chance theory.
Damages were first awarded for loss of a chance in contract and were initially confined to
solicitors' negligence actions. In this context, loss of a chance damages reinforce the fundamental
goals of contract law. They protect the reasonable expectations of the respective parties and the
interests of those who have reasonably relied on the promises or behaviour of others.3 Loss of a
chance damages also have origins in medical negligence law. However in the late twentieth
century, the loss of a chance theory has slipped its theoretical moorings and drifted into
previously uncharted areas of liability. Today in all Commonwealth jurisdictions even the loss
of a commercial opportunity is compensated; not only in contract, but also in tort. This
. This is an edited version of a paper submitted in fulfilment of the VUW LLB(Hons) requirements.
1 Jane Stapleton The Gist Of Negligence (1988) 104 LQR 389, 396.
2 The text book example of the 'but for' causation test can be seen in Barnett v Chelsea & Kensington HMC
[1969] 1 All ER 1068 (CA).
3 P S Atiyah An Introduction to the Law of Contract (5 Ed, Clarendon Press, Oxford, 1995) 34-36.](ViewImageLocal?handle=hein.journals/vuwlr29&div=25&collection=journals&method=preview&ext=.png&size=3)
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Loss of a Chance
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