Recent Court decisions, all involving underlying professional negligence actions, have reinforced the need for Claimants to formulate properly and articulate their claims at the outset, and not to rely on the Court using its power of discretion to permit later amendments, especially when limitation or otherwise un-pleaded matters are involved:
In Dee Holdings Ltd & Anor v Benson Mazure LLP & Anor, the Claimant brought a negligence claim against its former solicitors in connection with a company acquisition and related land purchase. Although the factual background was complex, the core issue concerned mortgage finance obtained by the acquired company. After the company defaulted on the loan, Receivers were appointed and the assets were sold.
The Claimant alleged that the solicitors had acted in a conflict of interest and failed to advise on securing charges over the company’s assets and land.
The Defendants identified significant deficiencies in the pleading, prompting the Claimant to seek amendments. The proposed amendments were rejected by the Defendants, and an application for strike-out made. In response, the Claimant applied for permission to amend and to reserve its position for further changes.
The Court was critical of the Claimant’s approach, finding that it had attempted—but failed—to plead fraud, instead advancing a case in contract, tort, and fiduciary duty without adequately pleading causation, despite ample opportunity. The Court held that the Defendants would still be left guessing the case they had to meet and accordingly granted the strike-out application.
In Collingwood v Irwin Mitchell LLP (formerly Thomas Eggar LLP), the Claimant brought a negligence claim against Thomas Eggar LLP (TEL), which had been acquired by Irwin Mitchell in 2015 and renamed Rhealisation LLP. The claim was issued against “Irwin Mitchell LLP (formerly Thomas Eggar LLP).”
Irwin Mitchell’s solicitors declined to accept service, and applied to strike-out the claim and / or for summary judgment, arguing the wrong Defendant had been named and the claim was time-barred.
The Court held that limitation issues required factual findings and should proceed to trial. It agreed the claim should have been brought against TEL but declined to strike out the entire claim. Instead, it struck out the claim against Irwin Mitchell and allowed TEL to be substituted as Defendant.
In BCD v Simons Muirhead Burton LLP, the Court considered three applications arising from a professional negligence claim. The first was brought by the Claimant, who argued that SMB’s solicitors should cease acting due to a conflict of interest. The Court found that there was no basis for any conflict, with the application dismissed as being totally without merit.
The Claimant also applied for an order compelling the filing of a Defence. However, the Court reaffirmed that under the Civil Procedure Rules, a defendant is not required to file a Defence while an application to strike out or for summary judgment is pending. Again, the application was totally without merit.
Finally, the Defendant applied to strike out the claim or for summary judgment. The Court found that the claim had no real prospect of success, had not been properly particularised, and there was no compelling reason to allow it to proceed to trial.
Key takeaways
The decisions do not raise novel points of law, but are a reminder of the need to properly plead claims at the outset, and identify the correct Defendant. Whilst the Court may permit later amendments, it will not always do so and parties can expect scrutiny over why the need has arisen. Further, even if an amendment is permitted there are likely to be cost consequences (see the wasted costs order in Robinson v Air Compressors & Tool Limited & Others).
