Hull on Estates Podcast #46 Causation
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1 Posted on February 13 th, 2007 Hull on Estates Podcast #46 Causation Suzana Popovic-Montag: Hi and welcome to Hull on Estates. You re listening to Episode #46 of our podcasts on Tuesday, February 13 th, Welcome to Hull on Estates, a series of podcasts for the Canadian legal community dealing with issues and insights surrounding estate planning in Canada. Hosted by the lawyers of Hull & Hull, the podcast will touch on some key considerations when planning estates and Wills. Now, here are today s hosts. Ian Hull: Hi Suzana. Suzana Popovic-Montag: Hi Ian, how are you? Ian Hull: Just great. Suzana Popovic-Montag: That s good. Ian Hull: Well today I thought when we were getting prepared for our renewed visit to Hull on Estates, we would talk a little bit about what is sort of an interesting area of the law. I know your practice and my practice, a large part of it is defending lawyers and acting for lawyers in situations where negligence claims are made. So we thought we might touch on what is a reasonably complicated aspect of that and that being the question of causation and the concept of causation generally and how it relates to estate matters. So whenever I do these things, I always like to go to the starting point and sort of identify what the issue itself is. And for whatever you re defending a lawyer, the first textbook that we always turn to is Jackson and Powell on Professional Negligence, and it is a sort of, it is the leading text in the UK on this issue. The third edition is one that we were working from the other day on a case. And on the question of causation, the authors describe it when assessing the question of damages. So you expect to create a situation where a lawyer may have made a mistake, for example, on a drafting issue or something like that in a Will situation. The question comes to whether or not the claim is brought in contract or in tort. It s first necessary to determine whether the solicitor s breach of the duty was the cause of the damage complained of. And that s the primary question. It s often easy to identify, again we ll use the example of a lawyer not drafting a Will properly. You can see that there s a breach of duty there, because we re expected to draw Wills properly when we are retained by clients. But that breach of duty is only the first step in the equation. And the other sort of fundamental starting point I like to work from is from Black s Dictionary, and if you look at the definition of causation, it says that the fact of being the cause of something produced or of happening, and the act by which an affect is produced. So the fact that the cause is something that produced an event is the key to following through this general concept. So why don t we
2 2 take some time in talking about it and maybe use some examples in the context of estate matters. Suzana Popovic-Montag: That s a good idea Ian, I think that ll help put it all into perspective and make it a little bit more easy to digest. Ian Hull: So, let s again, starting from first principles. Whenever you re defending a lawyer in a situation where an allegation of negligence is being made, the first question you always have to ask is, the first line of defense is the standard care, did the lawyer meet the standard of care expected of other lawyers in the jurisdiction in question. Suzana Popovic-Montag: And then the second thing that you would look at, Ian, is the duty of care. Is there a duty firstly, and secondly, to whom. So of course when you re drafting a Will, there is a duty to make sure that you re upholding the testator s intentions. Ian Hull: A side issue and one that we ll save for another podcast is, of course, the question of contributory negligence and how that might play into it. Where, in that situation, when you want to look to blame others like the accountants, or the financial planners around you. What s the next step in this process? Suzana Popovic-Montag: Well the next step then, Ian, is if you ve got a standard of care and you realize it s been breached that there is this duty and that there has, on the face of it, been some form of negligence, then you want to look, when you re defending the lawyer, to somehow break that chain, to break that causation or the argument that that breach caused the loss to the individual. Ian Hull: And that s a cornerstone to any defense, so when we re looking at making claims against professionals or defending professionals, this question of causation can in fact take you right out at the knees on either side of the equation. Suzana Popovic-Montag: So then it seems to me, Ian, that the key then is that no matter what happened, the damages have to have been actually caused by that lawyer s breach of duty. Ian Hull: And an important aspect of dealing with the question of causation, and one that is often forgotten and in my experience is that the onus is on the plaintiff that the loss was actually caused by the lawyer s negligence and that onus is not always easy to overcome. Suzana Popovic-Montag: Now Ian, when you refer to the onus, that onus that you re talking about is on a balance of probabilities and that s different from the criminal standard, where it s beyond a reasonable doubt. So you have to essentially show that, you know, if you were to look at it on a weighing of a scale situation, that it s more likely than not that that damage caused the loss.
3 3 Ian Hull: Okay, let s just take a minute and really sort of dissect this question of onus. We ve got the standard that it has to be met, and what is a classic sort of aspect of the question of causation in the context of the onus? Suzana Popovic-Montag: Well the question, Ian, and it s referred to really as the but for test, so but for the negligence of the solicitor, would that loss have occurred anyways? Ian Hull: So when you tie that into the question of onus, the plaintiff must establish that the loss would not have occurred but for the negligence of that lawyer. Suzana Popovic-Montag: That s right. And so the onus, as you say, is on the plaintiff to show that, and they ve got to show that on a balance of probabilities. Ian Hull: Alright, what s the problem with the but for test that we ve seen in the past, when we are using this as a defense and also on the plaintiff s side when you re making the claim itself? And I think really that question ties into what impact does the but for test have on the expectations of the lawyers? And what the courts have said in terms of taking the onus, taking this burden of proof and then saying to the claimants, is there still an out, is there, on a balance of probabilities, an outlet pass that can be taken. And so let s walk backwards and one of the cases that we really sort of focused on in a recent decision of the British Columbia Court of Appeal is the decision of Haag. And in that case, they talked about the first starting point, and that was the question of the burden of proof. Suzana Popovic-Montag: And what the court was saying there, Ian, was that, in a situation where it s impossible, as perhaps a practical matter, to prove whether the breach of duty caused the loss, it s actually more in keeping with the common sense approach to causation said the court, and as a tool of justice to let liability in those circumstances actually fall on the defendant. Ian Hull: And the whole idea is, is that the plaintiff would have done it anyway. The whole causation issue is, is cut out at the knees by the defense because they re saying look, this would have happened in any case. And there s a decision of Sykes vs. Midland Bank, in the British Court of Appeal where this was really flushed out. Suzana Popovic-Montag: And there, the court, Ian, as you recall said that the plaintiff would have done it even if they had been properly advised. And so in that case, only nominal damages were awarded in a situation where the plaintiff alleged that had they been told something properly by the solicitor, they wouldn t have taken that course of action. And the courts said, well nice try but I think that on a balance of probabilities, you would ve taken it anyways and so no damages. Ian Hull: Alright, so that case, is sort of the facts are kind of revealing in terms of giving us a real hard example of how the but for watered down approach is taken. And in that
4 4 case the solicitor, in reviewing a sub-lease with his clients, failed to point out to them the impact of an onerous clause relating to a change of use. Suzana Popovic-Montag: And so the plaintiff in their evidence couldn t actually say that it would have taken that sub-lease even if it had been correctly advised of the fact that, you know, it couldn t change the use for that property. Ian Hull: And as you say, the Court of Appeal still said, but on the balance of probabilities using that standard, the plaintiffs would have taken the sub-lease in any event, so the damages are nominal. Let s sort of flip the coin a little bit and see how other courts have looked at it, and there s a decision of Major vs. Buchanan, it s an Ontario High Court decision dealing with the duty to warn, which the previous decision we just mentioned did as well. Suzana Popovic-Montag: And in this case, Ian, the court held that a solicitor had a duty to warn the client of the risks that were involved in a particular course of action. And if he or she failed to do so and it appeared probable that the client would not have taken the risk had they been warned properly, then the solicitor in those circumstances will be liable. Ian Hull: So this is a real hypothetical situation and this is the guess work that comes into the whole question of causation, which makes it, a negligence case is a dangerous game which, you know, on both sides, the plaintiff s side and the defense side. Because if you take the strict, literal analysis of the but for test, you apparently could have a very strong defense to many, many claims. But the guesswork comes with respect to how the but for test is being applied. Suzana Popovic-Montag: And that s really quite a surprise, I think, Ian, from the court s perspective because we know that they don t like to deal with hypotheticals. And so in these situations they are difficult, and you see courts even struggle sometimes with their reasoning and trying to determine how that test should be applied. Ian Hull: So I think that this has sort of been a good starting point on what is, can be a complicated area of analysis and the question of defense. But one that if we start with the basic principle that we have to find a standard of care that means something, then we turn to whether or not a solicitor breached his or her duty of care in the conduct of his retainer. Then as the final sort of step, both on the plaintiff s and on the defendant s side, we look at the question of causation and whether or not the chain in the event ever got broken as a result of the facts in a particular situation. Suzana Popovic-Montag: And it s that break in the chain that we, when we re defending solicitors, are always hoping to find, because at the end of the day, that s the only way we ll be able to save the solicitors in their particular situation. Ian Hull: And it s tough because many of the situations are fact driven and the courts historically have been very tough on lawyers and they might well find the facts the way
5 5 they want to find them to make sure that they find the right result. But having said that, we ve also seen many successful defenses to claims against lawyers where the causation argument is so strong and so compelling that, and that being essentially that the plaintiffs would have done whatever was done regardless of the solicitor s evidence on either side. Suzana Popovic-Montag: And that s where the danger of twenty-twenty hindsight arises in the cases I think, when it s easy to criticize something after the fact but to be able to defend it during it is really the key. Ian Hull: Well I hope that was an interesting sort of guide through a potentially complex area of negligence law and we certainly run into it every day and struggle with it but hopefully that s been helpful. Suzana Popovic-Montag: Thank you very much, Ian. Ian Hull: Thanks Suzana. This has been Hull on Estates with the lawyers of Hull & Hull. The podcast you have been listening to has been provided as an information service. It is a summary of current legal issues in estates and estate planning. It is not legal advice and you are reminded to always talk with a legal professional regarding your specific circumstances. To listen to other podcasts, or to leave a question or comment, please visit our website at Our theme music is Upper Structure by DJ AKid and is courtesy of the Podsafe Music Network. /mem X:\Podwise\HULL & HULL FILES\PDF Podcasts\hoe#46.doc
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