‘Lost Chance’ Theory Gains Ground

/ / CFES Publications, Expert Testimony Cases

by Jerome M. Staller, Ph.D.

The “lost chance” theory of recovery is steadily gaining ground in medical malpractice cases involving reduced life expectancy or increased risk of future harm, and also in employment matters.

Under the lost-chance theory, a claimant’s recovery is limited by the odds or likelihood that an event would have occurred but for the defendant’s actions, or will occur in the future. For example, if it is shown that there is a 20 percent chance that the plaintiff will suffer future harm, the plaintiff would be awarded 20 percent of what he or she would have been awarded had he or she sustained the injury.  This is a departure from the traditional “all-or-nothing” rule of recovery, whereby a claimant receives the full measure of damages if — but only if — the injury is reasonably certain. Here are some recent medical-malpractice opinions interpreting the lost-chance argument:

Dillon v. Evanston Hospital, 199 Ill. 2d 483, 771 N.E. 2d 357, 264 Ill. Dec. 653 (May 23, 2002), a medical-malpractice action concerning, inter alia, jury instruction. The Illinois Supreme Court reversed a jury verdict in favor of the plaintiff in a medical malpractice action because the instruction “fails to instruct the jury on several important legal requirements, e.g., the increased risk must be based on evidence and not speculation, and, more importantly, the size of the award must reflect the probability of occurrence.” While there may be a less-than-even chance that a future injury would occur, the court held, there is a reasonable degree of certainty that the defendants’ negligence increased the plaintiff’s risk, and the plaintiff is entitled to damages for that increased risk “…as measured by multiplying the total compensation to which the plaintiff would be entitled if the harm in question were certain to occur by the proven probability that the harm in question will in fact occur.”

Lord v. Lovett, 146 N.H. 232 (2001). The New Hampshire Supreme Court held that damages for lost opportunity are recoverable and should be assessed using the “proportional” approach, as opposed the “all-or-nothing” preponderance standard. Addressing the defendant’s contention that lost-chance damages should be denied because they are intangible and not amenable to damages calculation, the court wrote: “First, we fail to see the logic in denying an injured plaintiff recovery against a physician for lost opportunity of a better outcome on the basis that the alleged injury is too difficult to calculate…. Loss of opportunity is not inherently unquantifiable…. This can be done through expert testimony just as it is in aggravation of preexisting injury cases.” (The New Hampshire legislature subsequently overruled Lord v. Lovett on the grounds that it expanded recovery in medical malpractice actions.)

Humpal v. Iowa Physicians Clinic Foundation, Supreme Court of Iowa No. 29 / 0-1858 (Oct. 8, 2003). The question was whether the decedent’s estate could recover for both wrongful death damages and for lost-chance damages.

The decedent was age 73 when she died of complications stemming from a misdiagnosis. The trial court denied a claim for loss of accumulation to the estate, on the grounds of insufficient evidence, but allowed the claims for burial-expense interest, pre-death pain and suffering, pre-death “loss of full mind and body,” and lost chance of survival. The defense asked for new trial, claiming that the verdict impermissibly contained both “all or nothing” damages and lost chance damages. The Iowa Supreme court held that “one seeking to recover these damages may also recover pre-death damages under our survival statute, but those damages are not attributable to a decedent’s death because they may be recovered in instances where death has not occurred. Pre-death damages, if proximately caused by the defendant’s negligence, are recoverable in full.” Both claims can be made in one case, the court held because “the trier of fact might fail to find on the evidence that a negligent act was the proximate cause of…death, yet believe that the negligence deprived the patient of a chance to survive.” However, if both a traditional wrongful-death claim and lost-chance-of-survival claim are submitted, the trier of fact must choose between lost-chance damages or traditional wrongful-death damages.

The lost-chance theory is gaining acceptance not only in medical-malpractice matters, but also as a remedy in employment litigation.

Doll v. Brown, 75 F.3d 1200, 1206-07 (7th Cir. 1996) offers a discussion of the use of lost-chance theory in the employment context, stating “it [the lost chance theory] strikes us as peculiarly appropriate in employment cases” involving competition for a job. The court explained:

In such a case the plaintiff’s chances are inherently uncertain because of the competitive setting. Suppose there were five applicants for one job, the employer discriminated against four, all four were equally well qualified, and the fifth got the job. Would all four of the discriminated-against applicants be entitled to back pay, one to the job, and the other three to front pay? Obviously not….

It would be hard to pick a number that would reliably estimate the probability of [the plaintiff’s] receiving the promotion but for discrimination. Would it be 5 percent? 10 percent? 40 percent? Who knows? Yet no less uncertainty attends the efforts of triers of fact to fix the percentage of a plaintiff’s negligence in a tort case governed, as most tort cases are today, by the rule of comparative negligence. See, e.g., Wassell v. Adams, 865 F.2d 849 (7th Cir. 1989), upholding an allocation of 97 percent of the fault to the plaintiff. If the uncertainty is bearable there, why not in an employment case?

(Id. at 1206-07)

In Bishop v. Gainer, 272 F.3d 1009, 1015-16 (7th Cir. 2001), the Seventh Circuit did adopt the rule that percentage-based damages reductions should be applied when a group of plaintiffs allege that they were denied positions for which the number of applicants exceeded the available jobs.

In Bishop, a number of plaintiffs applied for, but were refused, promotions. Each applicant contended that he was denied the promotion because of his race and/or sex. In vying for the promotions, each plaintiff competed against each other as well as against the successful applicants. The court, noting that not all plaintiffs could have received the promotions, applied the lost-chance doctrine, calculating the plaintiffs’ back pay by assessing the probability that each plaintiff would have received the promotion. The court determined that the three plaintiffs had, respectively, a 45%, 30% and a 15% chance of being promoted absent any discrimination, so each received that proportion of the back pay for the position.

The plaintiffs in Bishop objected to the judge’s calculations, contending that each was entitled to the full amount of the recovery. In approving the lower court’s reduction of back pay and front-pay damages using the lost-chance doctrine, the Seventh Circuit stated that, in light of the facts of this case, “a full award to each candidate in [this] situation would not be simply wrong, it would be obviously wrong.” Id., see also Cloud v. City of Chicago, No. 88 CV 3773, 2002 WL 1160930 (N.D. Ill. May 31, 2002).


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