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Wishful Thinking on Loss of Chance

Wishful Thinking on Loss of Chance

The tricky thing about suing your lawyer for allowing prescription to lapse on your right to recover loans is that you can’t make the issue of causation disappear into thin air.

In the recent case of Cansica Holding Inc. v. Boidman, 2018 QCCA 2130 the Court of Appeal confirmed that plaintiffs will not be compensated for simple loss of chance to recover loans if the evidence before the court is that the plaintiff would never have recovered the value of their loans in the first place.

In 2000, Cansica made a loan to its debtors that was secured against a hypothecated property. By the time Cansica’s lawyer introduced proceedings to exercise the hypothec and recover the loan, the right of action was prescribed.

Cansica promptly sued its lawyer for the full value of the unrecovered loan based on “loss of chance”, the controversial head of damages.

At trial, Madame Justice Perrault accepted that the time-barred action would have been successful but for the issue of prescription. Finding no probability that the creditors would have been able to collect on any assets besides the hypothecated property, the Court ordered damages from Cansica’s attorney in the amount that Cansica would have received upon a judicial sale of the hypothecated property, the remedy sought in the originating application.

Presumably this would have solved Cansica’s grievance with its attorney had the proceeds of the judicial sale been sufficient to cover the full value of the loan. Regrettably, they were not.

In light of this fact, Cansica tried on another remedy for size, one which eventually formed the basis for its appeal. Cansica argued that the trial judge should have applied the notion of loss of chance as set out by the Supreme Court of Canada in the 1991 case Laferrière v. Lawson.

As Cansica saw it, once the trial judge recognized that the company lost a “real and serious chance” to sue the debtors, it should be entitled to apply the value of the lost chance to every potential mode of recovery it might have had available, regardless of whether recovery was ever likely to happen in the first place. According to this line of the reasoning, the judge should have awarded Cansica an amount equal to the percentage chance of recovery under every possible avenue, multiplied by the value that could have, in theory, been recovered in each such scenario.

The Court of Appeal was unmoved. The Court upheld the trial judge’s decision to assess whether recovery under each option was probable. In the eyes of the Court, the trial judge rightly assessed whether Cansica’s recovery under each avenue was likely to occur and decided whether to award damages under each lost opportunity only if Cansica’s likelihood of recovery was higher than fifty percent. In so doing, the Court of Appeal reinforced the notion articulated in Laferrière v. Lawson that “the judge’s duty is to assess the damage suffered by a particular [plaintiff], not to remain paralysed by statistical abstraction”.[1]

As this most recent Court of Appeal judgment on point reminds us, loss of chance sits uncomfortably within the traditional approach of Quebec civil law, which requires indemnifying actual damages caused by the defendant’s fault. The relevant question is not what could have happened, but what would have happened but for the fault. In real life, people face binary outcomes: they either win the lottery, or they do not. Loss of chance, by contrast, turns outcomes into a matter of degree.

Incidentally, it was a lottery-related example that Justice Gonthier in Laferrière v. Lawson identified as a potentially appropriate case to conceive of the loss in terms of degree. Specifically, in the case of the lottery ticket which is not placed in the draw due to the negligence of the seller of the ticket, loss of chance might have some merit because “damage in such a case can only be understood in probabilistic or statistical terms” and “it is impossible to evaluate sensibly whether or how the chance would have been realized”.

This limitation is important, because loss of chance is a dangerous notion from a defendant’s perspective. When lost opportunity for an outcome displaces the lost outcome itself as the basis for compensation, the plaintiff can essentially short-circuit legal causation to achieve some degree of recovery that it otherwise might not have been able to obtain. For example, if a plaintiff cannot prove that a desired outcome would have been more likely than not to occur but for the defendant’s fault, the plaintiff could still argue that the fault caused her to lose a 30% chance of achieving that outcome. Assuming the plaintiff is successful in this argument, she could stand to recover 30% of the total damages attributable to the lost outcome.

This latest judgment on loss of chance in civil law confirms that loss of chance will be kept at bay. This is good news for defendants everywhere, but bad news for these particular creditors who, as it turns out, might have been better off taking their chances on Lotto 649.

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[1] Laferrière v. Lawson, [1991] 1 SCR 541, p. 607

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