In 1722, the curious case of Amory v Delamirie came before the court. A chimney sweep’s boy had found a jewel. He took it to a goldsmith to be valued but was told it was worth one and half pence. When the boy asked for the jewel back, the goldsmith’s apprentice returned the setting but pocketed the jewel. The boy later sued the goldsmith.

There was a problem, however: what value should be placed on the missing jewel? In a charming instance of redistributive justice, the judge told the jury that “unless the defendant did produce the jewel, and shew it not to be of the finest water, they should presume the strongest against him, and make the value of the best jewels the measure of their damages”.

Almost 300 years later, the rule in Amory still runs strong - only now it is applied to claims against lawyers, not goldsmiths, and in the context of lost litigation rather than missing gemstones.

Lost litigation claims are about causes of action: the package of rights and facts that allow a claimant to extract a remedy from a defendant with the help of the courts. A cause of action is a fragile thing. It is surprisingly easy to damage or lose. A solicitor can miss a time limit for commencing proceedings or allow them to be struck out for delay. A barrister can fail to call vital evidence at trial or advise the client to under-settle a viable claim. Where this happens as a result of a lawyer’s negligence, a claim may be brought for the value of the lost cause of action.

Lost litigation claims can pose all sorts of almost philosophical problems. Does the claimant have to prove on a balance of probabilities he would have won the action? What sort of evidence could or should have been adduced at the notional trial? How would the hypothetical judge have dealt with the claim? What if the law changes after the date of the notional trial?

The courts have responded to these problems in a characteristically robust fashion. A claimant is allowed to recover damages for the chance of winning, even if that chance is less than 50 per cent. A broad-brush approach is taken in regard to the evidence. A trial-within-a-trial of the underlying action is not allowed. Sometimes, when assessing damages, the court will even take into account events that take place after the date when the lost action would have come to trial.

The courts’ generosity to chimney sweeps and lost litigation claimants comes from the same origin. In each case, the neglect of the defendant has put it beyond the ability of the claimant to establish the value of that which has been lost. The defendant has destroyed the very evidence that could have been used to do so. Hence, the court’s tendency to “presume the strongest against”.

Is it really fair to compare a solicitor who has lost a cause of action with someone who pockets a gemstone? The difference is that whilst the jewel has vanished, something will always be known about the lost cause of action, some trace of it will be left, even if the solicitor’s neglect meant that it was poorly presented in court or struck out because the evidence had become stale.

Of course, it is difficult to value lost litigation when imperfect evidence exists about its merits and that imperfection has been caused by a lawyer’s neglect. However, these days litigants are urged to do their best and assess the value of their claims on the basis of what may be very limited information. For example, solicitors are duty-bound by their new Code of Conduct to discuss with their clients at the start of their retainers “whether the potential outcomes of any legal case will justify the expense or risk involved including, if relevant, the risk of having to pay an opponent's costs”.

Further, cases are routinely settled at an early stage of development, usually on a risk-value basis, paying close regard to the prospects of success, the costs expenditure to trial and the exposure to the opponent’s side. Underlying these developments is the hand of homo economicus - the rational, self-interested individual beloved of economists, who seeks to maximise his utility on the basis of available information about opportunities and constraints. Litigants (and their lawyers) are expected to act in this rational fashion, even where the information about the case is incomplete or vague. And, with practice, we are becoming better and better at it.

This suggests it may be time to reconsider Amory. Why should the court assume the worst against a lawyer when there is uncertainty over the outcome of an action he has lost for his client? If litigants can be expected to assess the odds on inadequate information, then so should judges.

The author is a barrister in the lawyers liability group at Reynolds Porter Chamberlain LLP

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