In Hopkins v Murphy,[1] the Ontario Superior Court of Justice (the Court) dismissed a professional negligence claim in which the plaintiff alleged that the defendant lawyer had negligently advised him to accept a settlement lower than what he was entitled to. While this case is particularly relevant to lawyers advising on settlements, it also highlights the importance of expert evidence in professional negligence claims, whether for plaintiffs seeking to establish liability or defendants seeking to avoid it.
Background
On November 11, 2003, the plaintiff drove his vehicle into the rear of a transport truck that was pulled over onto the shoulder of a high-way on-ramp. The truck was stopped one meter off of the highway with all of its lights on, including its four-way flashers. The plaintiff’s vehicle was completely destroyed and he suffered serious injuries, including a traumatic brain injury. The plaintiff had no memory of the accident or the day before.
The defendant was hired on December 6, 2006, to represent the plaintiff in all matters arising out of the motor vehicle accident. The parties involved in the accident attended mediation on August 11, 2008, resulting in a settlement of CA$127,900, which was finalized with signed minutes of settlement and a full and final release on August 24, 2008. Years later, the plaintiff sued the defendant, alleging that it was negligent to advise him to accept the settlement amount because it was too low. The plaintiff argued that the Court should apply the doctrine of “loss of chance” instead of “improvident settlement” to determine liability and damages.
Decision
The Court addressed two key issues: (1) whether the defendant was negligent or breached his contract by recommending that the plaintiff accept the settlement amount; and (2) whether the Court should apply the doctrine of loss of chance. The action was dismissed on the first issue, but the Court considered the second issue in the alternative.
The Court noted that the standard for negligence claims involving legal advice is reasonableness. Specifically, whether the advice is outside of the range of reasonable choices. This acknowledges that no lawyer can definitively determine whether a settlement is the optimal amount in a given case.
The Court also considered whether to apply the doctrine of loss of chance or improvident settlement. Referring to the Court of Appeal for Ontario’s guidance in Jarbeau v McLean,[2] the Court concluded that in a solicitor negligence case alleging an improvident settlement, a trial within a trial is required to determine the liability and damages the plaintiff would have received had the case gone to trial. The court must then determine the difference between the amount settled for and the amount the plaintiff would have received and whether that amount is within a reasonable range of possible choices made by a competent member of the profession. If a trial within a trial is impossible, the court may resort to the doctrine of “loss of chance.”
In this case, the plaintiff failed to conduct a trial within a trial (i.e., to determine whether he would have been entitled to damages in relation to the motor vehicle accident) and failed to call evidence to establish why a trial within a trial was not possible.
The plaintiff also failed to prove that the defendant was negligent. The central question was whether the defendant’s advice fell outside the range of reasonable choices that could have been made by a competent member of the profession. Although the plaintiff argued that the defendant was negligent for failing to make additional inquiries and to take necessary actions before settling at mediation, he failed to call any expert evidence on the standard of care, as required by the Court of Appeal for Ontario in Krawchuk v Scherbak.[3] Generally, it is not possible to determine professional negligence without the benefit of expert evidence unless: (1) it is possible to reliably determine the standard of care without the assistance of expert evidence; and (2) the actions of the defendant are so egregious that it is obvious that his or her conduct has fallen short of the standard of care, even without knowing precisely the parameters of the standard. Neither of the two exceptions applied in this case.
Since the plaintiff failed to call expert evidence as required by Krawchuk, he failed to prove that the defendant was negligent or breached his contract by showing that the defendant’s advice fell outside the range of reasonable choices that could have been made by a competent member of the profession. Further, the plaintiff failed to conduct a trial within a trial or satisfy the Court why that could not be done, precluding the court from determining liability and damages in relation to the motor vehicle accident. The plaintiff also failed to call any evidence of what a reasonable settlement amount would have been in the circumstances.
Key takeaways
This case underscores the critical role of expert evidence in professional negligence claims, both for establishing the standard of care and determining whether the defendant met or breached that standard. Without that expert evidence, a claim for professional negligence is likely to fail. Professionals should take notice that expert evidence is likewise crucial to defending against a professional negligence claim.
Additionally, while not directly addressed in the decision, this case also illustrates a strategic consideration between summary judgment motions and expert evidence. In situations where it appears that a party may fail to call expert evidence, the opposing party may consider bringing an early summary judgment motion. In this case, had the defendant brought a summary judgment motion, it could have led to reduced legal expenses and an earlier resolution.
For more information on this case or any questions related to the legal implications of this decision on your business, please contact the authors, Sara E. Hart, KC or Deepshikha Dutt. We would like to thank our articling student, Janson Fu, for his contributions to this insight.
[1] 2024 ONSC 3698.
[2] 2017 ONCA 115.
[3] 2011 ONCA 352.
