The problem of causation
227 In Vairy v Wyong Shire Council (2005) 223 CLR 422 at 461, Hayne J observed that "[t]he inquiry into the causes of an accident is wholly retrospective. It seeks to identify what happened and why." Causation is a question of what was i.e. did the defendant's conduct cause the injury. To the extent that this involves any hypothetical questions, the answers to those questions only go to proof of the historical fact on the balance of probabilities (see Bennett v Minister of Community Welfare (1992) 176 CLR 408 at 422-423 per Gaudron J). The hypothetical questions are not themselves the facts in issue, although in a theoretical sense causation will always involve hypothetical questions. As Hayne J pointed out in Chappel at 282:
"The search for causal connection between damage and negligent act or omission requires consideration of the events that have happened and what would have happened if there had been no negligent act or omission. It is only by comparing these two sets of facts (one actual and one hypothetical) that the influence or effect of the negligent act or omission can be judged."
228 Unlike Sellars, Chappel v Hart was a personal injury case. It involved a failure to warn a patient about a risk of surgery that ultimately eventuated. There were five separate judgments. No member of the High Court decided the case on the basis of a lost chance. It was accepted that the injury in respect of which the plaintiff sought damages was her entire physical injury rather than the loss of a chance of a better medical outcome.
229 Gaudron J did not express an opinion about the role of a theory of loss of a chance in personal injury cases. McHugh J dissented but noted that the case did not fall within the principles defined in Sellars.
230 Gummow J (at 258-263) gave detailed consideration to the issue of loss of a chance. His Honour noted that Dr Chappel sought to avoid liability by arguing that Mrs Hart had lost no real and valuable chance of the risk of injury being diminished or avoided due to the defendant's negligent failure to warn. His Honour then stated (at 258):
"In this way the submissions of Dr Chappel tended to divert attention from the central issue, namely whether there was adequate reason in logic or policy for refusing to regard the 'but for' test as the cause of the injuries sustained by Mrs Hart, by the allurement of further cogitation upon the subject of 'loss of a chance.'
Once the criterion for assessment of the adequacy of causation has been determined as a matter of law, the question whether the plaintiff has suffered some damage and therefore has a complete cause of action in tort is normally established by evidence which satisfies the civil standard of proof [ Sellars at 351, 353]. If causation is not established in this way, then the plaintiff will fail and recover nothing [ Sellars at 368]."
231 Gummow J noted that the traditional standard of proof of causation in negligence (which his Honour appears to accept was not disturbed by Sellars) has led to difficulties in proving causation in some types of case. His Honour acknowledged that there has been some suggestion in other jurisdictions that these difficulties can be avoided by applying the loss of a chance analysis to causation. However, his Honour was concerned to emphasise that in Australia the loss of a chance analysis only affects the standard of proof at the stage of the assessment of damages. Gummow J stated (at 260) that:
"… this is not a case in which Mrs Hart seeks damages for the loss of an opportunity or chance to acquire or receive a benefit with a value to be ascertained by reference to the degree of probabilities or possibilities. As is explained in Sellars v Adelaide Petroleum NL , in Australia this generally is what is involved in the 'loss of a chance' cases."
232 And at 263:
"In the present case, it would have been for Dr Chappel to show that Mrs Hart's damages were to be reduced to reflect the possibility, being more than a speculation, that independently of his negligence Mrs Hart would have sustained at some later date the injuries of which she complained. That was not the way in which the case for the appellant [Dr Chappel] was presented. Rather, the attempt was to show a lack of causation and to deny any liability. The submissions by Dr Chappel in a large measure attempt to turn speculative matters, which are relevant, if at all, upon the assessment of damages, to account by disrupting the principles governing causation. In this Court, as in the Court of Appeal, Dr Chappel seeks an order setting aside the verdict for Mrs Hart and its replacement by a judgment in his favour.
In any event, by her notice of contention Mrs Hart submits that Dr Chappel would have failed in any attempt to obtain a Malec discount and I agree. The evidence of Professor Benjamin, which is set out earlier in these reasons, and the observations in the Supreme Court of Canada to which I have referred, indicate the serious difficulty that would have arisen in this case in passing from the speculative to the ascertainment of a degree of probability. That consideration serves also to emphasise the strength of Mrs Hart's case on causation."
233 Kirby J is the only member of the court who indicated a preference for the loss of a chance approach in the context of causation, although his Honour expressed no concluded view. At 274-275 Kirby J said:
"A further way in which, in some circumstances, the difficulties of causation for a plaintiff are alleviated is by treating the plaintiff's loss as a 'loss of a chance.' In cases in which this approach is permissible, it may allow evaluation of the plaintiff's loss in terms of comparing the chances of suffering harm (given the breach which has occurred) against those that would have existed (if the breach is hypothesised away). In CES v Superclinics (Aust) Pty Ltd [(1995) 38 NSWLR 47 at 56-57] I indicated my attraction to this approach as a more rational and just way of calculating damages caused by established medical negligence. It is clearly laid down by the authority of this Court that, in some circumstances, a plaintiff may recover the value of a loss of a chance caused by a wrongdoer's act or omission. The approach also has some judicial support in the context of medical negligence in England, Canada and the United States. A number of commentators favour this approach because of the failure of orthodox reasoning to do justice to some patients' losses and because it invites a more empirical calculation of loss, with the use of statistics which might offer outcomes that are more accurate and fair to all concerned. On the other hand, the weight of judicial opinion in England and Canada and some academic writing appears to be critical of the application of the loss of a chance theory to cases of medical negligence. In part this is because, where medical negligence is alleged, 'destiny…[has] taken its course,' arguably making an analysis by reference to chance inappropriate or unnecessary in the view of the critics of this approach. Alternatively, the loss of a chance calculation has been criticised on the ground that it would discard commonsense, undermine the plaintiff's onus of proving the case and submit the law to the 'paralysis' of statistical abstractions."
234 In marked contrast, Hayne J (at 289) took the view that the loss of a chance analysis should be rejected outright:
"…how does one assess the value of the chance that has been lost? It was suggested in the course of argument that it is reflected in the assessment of damages by discounting the damages otherwise allowed. But that invites attention to what are those damages that are to be discounted - is it, as the argument appeared to assume, the damages attributable to the physical consequences which the respondent suffered? That could be so only if the physical consequences which the respondent suffered were caused by the appellant's negligence.
All of these considerations point to the conclusion that the loss of chance analysis is flawed and should not be adopted."
235 Naxakis concerned a young lad who suffered a burst aneurysm in circumstances where it was alleged that if appropriate medical care had been provided the adverse outcome would have been avoided.
236 Although not necessary for her decision, Gaudron J considered whether the plaintiff could recover for the lost chance of a successful outcome. In doing so her Honour addressed some of the issues surrounding loss of a chance in the personal injury context. Her Honour accepted that in cases involving the failure to diagnose a pre-existing condition "there is no philosophical or logical difficulty in viewing the loss sustained as the loss of a chance" and accepted that this analysis may be "strictly correct." However, in rejecting the approach that damages should be awarded on that basis her Honour, inter alia, observed that the lost chance approach cannot easily be applied in conjunction with the traditional balance of probabilities approach. Her Honour said at 280:
"As already indicated, the lost chance approach requires proof that a valuable chance has been lost. A chance would have no value if the defendant could establish, on the balance of probabilities, that the pre-existing condition would have resulted in the injury or disability in question in any event. Thus, if proof on the balance of probabilities were also retained, damages for loss of a chance would be awarded only in those cases where the plaintiff cannot establish, on the balance of probabilities, that the risk would not have eventuated and the defendant cannot establish that it would. There is, thus, limited practical significance for an approach which allows for loss of a chance if the traditional approach is also retained."
237 Gaudron J joined in the majority in Sellars, but in Naxakis her Honour was careful to limit the application of the loss of a chance analysis to cases involving loss of a commercial opportunity. In rejecting loss of a chance in personal injury cases her Honour observed that although it is usually justified in this context on the basis that it is a legitimate type of damage, the reality is that it is used to alleviate problems with uncertainty of causation: Naxakis at 278-279. The problem is expressed by the commentator Jacques Bore quoted by Gonthier J in Laferrière at [64]:
"If therefore the compensation awarded is only partial, it is not because the death damage was itself partial: a dead person is not partly alive, and the victim or his heirs suffered the damage in its entirety; it is because the compensation is determined in relation to the probable causal link found to exist between the fault and the final damage. It is partial causation, determined in accordance with a probability calculation taking into account the influence of possible external factors, which gives rise to partial liability in this case…" (emphasis in original).
238 Gaudron J expressed the view in Naxakis that the difficulties of proving causation in medical negligence cases had been exaggerated (see 278-279) and that the concept of a lost chance was not required to overcome them. Her Honour confirmed (at 279) that where the defendant negligently creates or increases a risk of harm and that risk eventuates, the tribunal of fact is entitled to conclude that causation has been established on the balance of probabilities unless the defendant can establish that their breach had no effect or that the damage the plaintiff suffered was inevitable.
239 Callinan J was the only other member of the court in Naxakis who considered the issue of loss of a chance. His Honour also accepted McHugh J's "material contribution test" and continued (at 312-313):
"On the evidence here the jury were entitled to hold that the failure, the treating doctor's omission to either undertake an angiogram or the failure to give any consideration to the undertaking of it, materially contributed to the appellant's condition. They would be entitled to take an alternative view that the second respondent's conduct, although it might not be possible to say (on the balance of probabilities) that it definitely materially contributed to the plaintiff's final condition, at least caused him to lose a valuable chance (the value of which it was for them to assess) of avoiding being in the condition that he now finds himself. There is still, in my opinion, room for the operation of the loss of a chance rule (particularly in cases involving the practice of what is even today said to be an art rather than a scientific skill), enabling a plaintiff to recover damages to be equated with, and reduced to the value of the chance he or she has lost, rather than the damages which would be appropriate if it has been proved on the balance of probabilities that the plaintiff's condition owes itself to the defendant's acts or omissions."
240 Callinan J's analysis would seem to be consistent with subsequent authority in the NSW Court of Appeal.
241 When the conduct of a defendant is shown to have "materially contributed" to the plaintiff's injuries causation on the balance of probabilities will be satisfied. The defendant, as a matter of legal proof, has caused the plaintiff's entire injury. Where, however, all that can be shown is that the defendant's breach of duty made some contribution to the plaintiff's injury as opposed to a material contribution, then the only way that the plaintiff can succeed is on the basis of a lost chance of a better outcome. In State of New South Wales v Burton [2006] NSWCA 12 at [14], Spigelman CJ stated that:
"I have set out [the trial judge's] summary of the pertinent evidence of Dr Wright. That summary indicates that Dr Wright gave no evidence of any character on the basis of which the Court could assess the degree of contribution or the degree of increased risk. There was evidence from Dr Wright that the Appellant's [i.e. the defendant's] omissions made some contribution to the development of the PTSD itself. However, there was, in my opinion, no evidence which could justify an inference that that contribution was a material contribution. Furthermore, when one reads the reference to an increased 'risk' of developing PTSD in Dr Wright's reports in their full context there is nothing to suggest that that increased degree of risk was significant" (emphasis in original).
242 His Honour concluded (at [24]) that "… the end result is that damages were assessed on an inappropriate basis. The matter should be remitted to the District Court for damages to be assessed on a loss of a chance basis" (see also the judgment of Basten JA at [66]). While his Honour agreed with Spigelman CJ's opinion that the evidence in the case was insufficient to justify a finding of material contribution, Hunt AJA qualified his agreement by stating (at [91]) that:
"…The Chief Justice has found…that the distinction drawn by Dr Wright between cause and contribution/exacerbation should be interpreted as reducing the extent of the contribution made to the respondent's condition of post-traumatic stress disorder by the appellant's omissions to something necessarily less than a material contribution…The word 'exacerbation' is generally used by the medical profession as meaning only that the original condition is made worse (or more serious), usually involving a greater intensity in the symptoms of that condition. That increase in severity may be minor, medium or extreme. The word exacerbation does not mean to me that the act which led to the exacerbation was necessarily something less than a material contribution to the condition exacerbated."
243 Spigelman CJ had earlier considered the question of the proof necessary to satisfy the "material contribution" test in Seltsam. In that case, His Honour (at 280) accepted as fundamental the proposition that proof of "a mere possibility is not sufficient to establish causation for legal purposes." However, evidence of a possibility is circumstantial evidence which, cumulatively, may amount to proof on the balance of probabilities or even beyond reasonable doubt. At [287] the Chief Justice approved the following passage from the judgment of Herron CJ in EMI (Australia) Ltd v BES [1970] 2 NSWLR 238 at 242:
"Medical science may say in individual cases that there is no possible connexion between the events and the death, in which case, of course, if the facts stand outside an area in which common experience can be the touchstone, then the judge cannot act as if there were a connexion. But if medical science is prepared to say that it is a possible view, then, in my opinion, the judge after examining the lay evidence may decide that it is probable. It is only when medical evidence denies that there is any such connexion that the judge is not entitled in such a case to act on his own intuitive reasoning. It may be, and probably is, the case that medical science will find a possibility not good enough on which to base a scientific deduction, but courts are always concerned to reach a decision on probability and it is no answer, it seems to me that no medical witness states with certainty the very issue which the judge himself has to try."
244 The Chief Justice set out the passage from McHugh J's judgment in Chappel v Hart that has been quoted above. His Honour said (at 279):
"Although his Honour's was a dissenting judgment, this passage has subsequently been referred to with approval: see Naxakis… per Gaudron J and…per Callinan J.
The starting point of McHugh J's analysis was that it had been established on the balance of probabilities that the conduct did create or increase the risk of injury, 'and that risk had eventuated.'
This starting point is the very matter in issue in the present case. Was there evidence on the basis of which the trial judge could conclude, on the balance of probabilities, that there was an increased risk of injury and that that risk had 'eventuated' in the specific disease of the respondent?
If there was such evidence then, to use the words of both Gaudron J…and Callinan J…the tribunal of fact was 'entitled' to find that the conduct which increased the risk, materially contributed to the injury - entitled, but not, of course, required to so find" (emphasis in original).
245 Importantly, his Honour stated (at 280) that:
"There is a tension between the suggestion that any increased risk is sufficient to constitute a 'material contribution,' and the clear line of authority that a mere possibility is not sufficient to establish causation for legal purposes. The latter is too well-established to qualify the former. The reconciliation between the two kinds of references is to be found in the fact that, as in Chappel v Hart and in the cases that suggest the former, the actual risk had materialised. The 'possibility' or 'risk' that X might cause Y had in fact eventuated, not in the sense that X happened and Y also happened, but that it was undisputed that Y had happened because of X" (emphasis in original).
246 The effect is that evidence of a possibility that the relevant conduct caused the plaintiff's injury is circumstantial evidence that may contribute to proof, on the balance of probabilities, of a material contribution. On the other hand, if the evidence taken as a whole does not establish anything more than a mere possibility that the conduct caused the injury, then causation has not been proved to the requisite standard of proof. Nevertheless, the plaintiff may still be entitled to receive damages on the basis of a lost chance.