Marie O'Carroll v Paul F Diamond (practising as Paul F Diamond and Company Solicitors)

• Jurisdiction: Ireland
• Judge: Mr. Justice Kearns,Mr. Justice Hardiman
• Judgment Date: 12 April 2005
• Neutral Citation: [2005] IESC 21
• Court: Supreme Court
• Docket Number: [S.C. No. 354 of 2002]
• Date: 12 April 2005

[2005] IESC 21

THE SUPREME COURT

Hardiman J.

Geoghegan J.

Kearns J.

[354/2002]

O'CARROLL v DIAMOND T/A PAUL F DIAMOND & CO SOLICITORS

BETWEEN

MARIE O'CARROLL

PLAINTIFF/APPELLANT

AND

PAUL F. DIAMOND (PRACTISING AS PAUL F. DIAMOND AND COMPANY SOLICITORS)

DEFENDNAT/RESPONDANT

FAMILY HOME PROTECTION ACT 1976

CARROLL v CARROLL 1999 4 IR 241 2000 1 ILRM 210

HILTON v BARKER BOOTH & EASTWOOD 2005 1 AER 651

MOODY v COX 1917 2 CH 71

FINLAY v MURTAGH 1979 IR 249

HEDLEY BYRNE v HELLER 1964 AC 465

MIDLAND BANK TRUST CO LTD v HETT STUBBS & KEMP 1978 3 AER 571 1978 3 WLR 167 1979 CH 384

SYKES v MIDLAND BANK EXECULAR & TRUSTEE CO LTD 1971 1 QB 113 1970 3 WLR 273

DUGDALE & STANTON PROFESSIONAL NEGLIGENCE 3ED 397

CANTERBURY v SPENCE 150 US APP DC 263 1972 464 F 2D 772

REIBL v HUGHES 1980 114 DLR 3D 1

ELLIS v WALLSEND DISTRICT HOSPITAL 1989 17 NSWLR 553 1990 2 MED LR 103

BUSTOS v HAIR TRANSPLANT PTY LTD UNREP NEW SOUTH WALES COURT OF APPEAL 15.4.1997

O'BRIEN v WHEELER UNREP NEW SOUTH WALES COURT OF APPEAL 23.5.1997

CHATTERTON v GERSON 1981 1 QB 432

HILLS v POTTER 1984 1 WLR 641

SMITH v BARKING 1994 5 MED LR 285

GEOGHEGAN v HARRIS 2000 3 IR 536

NEGLIGENCE

Solicitors

Non- client - Requirement to advise party who was not client to obtain independent legal advice - Solicitor's obligation to non client varies depending on circumstances -Causation - Objective test - Subjective test -Whether solicitor should force non-client to obtain independent legal advice - Test for damages where professional negligence claimed - Whether court should adopt pragmatic approach when determining whether plaintiff would have followed advice- Geoghegan v Harris [2000] 3 IR 536 followed - Claim dismissed ( 354/ 2002 - SC- 12/4/2005) [2005] IESC 21, [2005] 4 IR41; [2005] 2 ILRM 219

O'Carroll v Diamond

The plaintiff brought proceedings against the defendant, who was a solicitor, claiming damages for professional negligence, breach of duty and breach of contract. The trial judge (O'Neill J.) held that the defendant had been guilty of negligence but further held that the plaintiff had not suffered any loss as a result. The plaintiff appealed against the dismissal of her claim and the defendant, in turn, challenged the finding of negligence.

Held by the Supreme Court (Hardiman, Geoghegan and Kearns JJ) in dismissing the plaintiff's appeal that the defendant was not negligent, in breach of duty or in breach of contract. The trial judge also correctly decided the issue of causation.

Reporter: R.W.

1 JUDGMENT of Mr. Justice Kearns delivered the 12th day of April, 2005

2 I have read the judgment about to be delivered by Hardiman J on the issue of negligence in this case and agree with his reasoning and conclusion. I would also be of opinion that this appeal must fail on causation grounds.

3 In cases such as the present one, a claimant will only recover damages if the court is satisfied on the balance of probabilities that the claimant would have acted on such advice had it been given and, if so, in a particular way which would have avoided the loss. In opening the appeal Mr. Dwyer, counsel on behalf of the appellant, accepts that proof of causation is a necessary prerequisite to the recovery of compensation.

4 The point is illustrated in this context by the case of Sykes v. Midland Bank Execular and Trustee Company Ltd, [1971] 1 Q.B. 113 in which a solicitor negligently failed to advise the client that the terms of a lease he was proposing to take prohibited him from sub-letting with the lessor's consent. The client took the lease and subsequently wished to sub-let the property. The lessor refused to give consent and the client claimed from the solicitor for the loss of rental income. The Court of Appeal considered in the light of the evidence that the client had taken other leases with similar provisions and that, the balance of probabilities, he would have taken the lease in question even if correctly advised as to its terms.

5 In that case, the evidence was unusually unequivocal in that the plaintiff's evidence was that he would have executed the underlease in any event. Lord Salmon stated (at 127 G-H):-

"... Mr. Sykes was a remarkably candid witness. He, no doubt disappointingly, would not say that it would have made any difference had the proper advice been given... at the end of his evidence it certainly appeared that in his view it was as likely as not that the plaintiffs would have acted just as they did even if they had had proper advice about the effect of clause 2 (XI) of the underleases."

6 In most cases, however, the question of whether advice would have made a difference to a claimant's conduct involves a fairly sophisticated exercise on the part of the trial judge to determine what a particular person would have done in the specific circumstances obtaining in the case before him.

7 Inevitably, the trial judge will depend to a large extent upon the evidence and demeanour of the claimant when giving that evidence. The court in discharging this obligation must exercise considerable care having regard to the fact that a plaintiff's evidence about what he or she would have done if properly advised is bound to be coloured by the fact that an adverse outcome did in fact eventuate. There is an inevitable risk that evidence given by a plaintiff in these circumstances will be coloured (whether consciously or unconsciously) with the benefit of hindsight.

8 This difficulty has led to widespread discussion in other common law jurisdictions, particularly with regard to advice given in the context of the doctor/patient relationship, as to how courts should go about this task. While the present context is that of solicitor/client, the underlying requirements of proof are not dissimilar. Indeed, authors Dugdale & Stanton (Professional Negligence, Butterworths; 1998 ed. Chap 18, p 397) treat the themes interchangeably. The briefest review of some of the medical cases is thus helpful, not least to decide whether the assessment of a claimant be made by reference to an objective or subjective test as to what he/she would probably have done if appropriate advice had been given.

9 In the United States the objective test was preferred in Canterbury v. Spence [1972] 464 F. 2d 772 and a similar approach was taken in Canada in Reibl v. Hughes [1980] 1 14 D.L.R. (3d) 1.

10 In Canterbury v Spence, Robinson J, in delivering the opinion of the Court, explained the preference for an objective test at p.790:-

"No more than breach of any other legal duty does nonfulfilment of the physician's obligation to disclose alone establish liability to the patient. An unrevealed risk that should have been made known must materialise, for otherwise the omission, however unpardonable, is legally without consequence. Occurrence of the risk must be harmful to the patient, for negligence unrelated to injury is nonactionable. And, as in malpractice actions generally, there must be a causal relationship between the physician's failure to adequately divulge and damage to the patient.

A causal connection exists when, but only when, disclosure of significant risks incidental to treatment would have resulted in a decision against it. The patient obviously has no complaint if he would have submitted to the therapy notwithstanding awareness that the risk was one of its perils. On the other hand, the very purpose of the disclosure rule is to protect the patient against consequences which, if known, he would have avoided by foregoing the treatment. The more difficult question is whether the factual issue on causality calls for an objective or a subjective determination.

It has been assumed that the issue is to be resolved according to whether the fact finder believes the patients testimony that he would not have agreed to the treatment if he had known of the danger which later ripened into injury. We think a technique which ties the factual conclusion on causation simply to the assessment of the patient's credibility is unsatisfactory. To be sure, the objective of risk disclosure is preservation of the patient's interest in intelligent self - choice on proposed treatment, a matter that the patient is free to decide for any reason that appeals to him. When, prior to commencement of therapy, the patient is sufficiently informed on risks and he exercises his choice, it may truly be said that he did exactly what he wanted to do. But when causality is explored at a post injury trial with a professedly uninformed patient, the question whether he actually would have turned the treatment down if he had known the risks is purely hypothetical; "viewed from the point at which he had to decide, would the patient have decidedly differently had he known something he did not know?" and the answer which the patient supplies hardly represents more than a guess, perhaps tinged by the circumstances that the un-communicated hazard has in fact materialised.

In our view, this matter of dealing with the issue on causation comes in second best. It places the physician in jeopardy of the patient's hindsight and bitterness. It places the fact finder in the position of deciding whether a speculative answer to a hypothetical question is to be credited. It calls for a subjective determination solelyon testimony of a patient/witness shadowed by the occurrence of the undisclosed risk.

Better it is, we believe, to resolve the causality issue on an objective basis: in terms of what a prudent person in the patient's position would have decided if suitably informed of all perils bearing significance. If adequate disclosure could reasonably be expected to have caused that person to decline the treatment because of the revelation of the kind...