Can a defendant be liable for failing to warn about a risk which does not materialize, where this leads the plaintiff to be injured by a second undisclosed risk that, unlike the first, would not have influenced the plaintiff if disclosed? In Wallace v. Kam,  HCA 19, released today, the High Court of Australia answered no. The decision in Wallace could prove to be an important one for Canadian defendants who are frequently targeted with failure to warn claims, particularly in the context of product liability class actions and medical negligence disputes.
The Wallace litigation involved a claim by the plaintiff, Mr. Wallace, against a neurosurgeon, Dr. Kam. As a result of a surgical procedure performed by Dr. Kam, Mr. Wallace suffered a condition known as “bilateral femoral neurapraxia”, which consisted of temporary local damage to nerves on his thighs.
Mr. Wallace’s claim was originally dismissed at trial. Harrison J. found that although Dr. Kam negligently failed to warn Mr. Wallace of the risk of neurapraxia, he would have chosen to undergo the surgery even if the risk was disclosed. In response, Mr. Wallace argued that Dr. Kam also negligently failed to disclose the risk of paralysis, and that even though he did not suffer paralysis, he would have decided against the surgery had he known about it.
This argument was rejected by both Harrison J. and the majority of the New South Wales Court of Appeal. They found that Dr. Kam’s failure to warn of the risk of paralysis could not be the legal cause of Mr. Wallace’s neurapraxia.
The Wallace Decision
The judgments below were unanimously affirmed by the High Court of Australia. It concluded that although Dr. Kam’s failure to warn Mr. Wallace of the risk of paralysis was the factual (or “but for”) cause of his neurapraxia, it should not be regarded as the legal cause based on considerations of policy:
… The duty of a medical practitioner to warn the patient of material risks inherent in a proposed treatment is imposed by reference to the underlying common law right of the patient to choose whether or not to undergo a proposed treatment. However, the policy that underlies requiring the exercise of reasonable care and skill in the giving of that warning is neither to protect that right to choose nor to protect the patient from exposure to all unacceptable risks. The underlying policy is rather to protect the patient from the occurrence of physical injury the risk of which is unacceptable to the patient. It is appropriate that the scope of liability for breach of the duty reflect that underlying policy. (para. 36)
Based on these considerations, the High Court concluded:
… The normative judgment that is appropriate to be made is that the liability of a medical practitioner who has failed to warn the patient of material risks inherent in a proposed treatment “should not extend to harm from risks that the patient was willing to hazard, whether through an express choice or as found had their disclosure been made.” (para. 37)
The Wallace decision suggests that the scope of liability for failure to warn of a particular risk does not extend to a different risk which the plaintiff either accepted, or would have accepted had it been revealed. Although the High Court’s decision was based upon the distinction between factual and legal causation in the New South Wales Civil Liability Act, the same distinction has been drawn at common law by the Supreme Court of Canada (see, e.g., Mustapha v. Culligan of Canada Ltd.,  2 SCR 114).
Assuming Wallace were to be adopted in Canada, it could have an important limiting effect in failure to warn claims against medical professionals. In addition, it could prove significant in product liability class actions alleging failure to warn, since it underscores the complexity and individual issues that can be involved in decision and injury causation inquiries. It will therefore be interesting to see how Wallace is received by Canadian courts.
The McCarthy Tétrault Opinions Group consists of members of the firm’s litigation department whose practices focus on written advocacy and the provision of strategic advice and opinions in the context of complex business disputes and transactions. The members of the Opinions Group are Anthony Alexander, Martin Boodman, Brandon Kain, Hovsep Afarian and Kirsten Thompson.