Birchall Blackburn (a firm) v Gibrail

An amendment to a statement of case is not barred merely because limitation may have expired. Under CPR 17.4, the court must ask whether the proposed pleading adds a new claim and, if so, whether it arises from the same or substantially the same facts as an existing claim. A pleading that quantifies damage flowing from an already pleaded wrong may be permitted. The court should not refuse re-amendment on speculative limitation or ownership concerns without addressing those questions. Recovery remains constrained by causation and remoteness: losses dependent on uncertain commercial success are speculative, and distress-related loss is ordinarily outside a solicitor’s contractual retainer unless within the parties’ contemplation.

A former client was sued by his solicitors for unpaid fees arising from advice and representation connected with a failed share acquisition and related litigation. He obtained an assignment from his trustee in bankruptcy and sought to re-amend his defence and counterclaim to plead detailed heads of loss. His Honour Judge Kershaw refused the proposed amendments, reasoning that some claims might be time-barred and others might belong to the company. The Court of Appeal considered whether CPR 17.4 permitted the amendments and whether the proposed losses were legally sustainable, including issues of causation, remoteness and damages for distress.

The appeal was allowed unanimously. Permission to appeal was granted, the respondent was permitted to file its notice out of time, and the judgment refusing re-amendment was set aside. Permission to re-amend was granted on a limited basis.

1. Lord Justice Sedley held that CPR 17.4 imposed no absolute bar on re-amendment merely because a limitation period might have expired. The relevant questions were whether the proposed damage amounted to a new claim and, if so, whether it arose from the same or substantially the same facts as a claim already advanced. The assessment was one of impression. The court applied the approach in Welsh Development Agency v Redpath Dorman Long Ltd [1994] 1 WLR 1409, 1418.
2. The proposed particulars were, on the court’s assessment, substantially a quantification of injury already pleaded. The possibility that some damage might be a sufficiently new characterisation to constitute a new claim, as discussed in Darlington Building Society v O’Rourke [1999] PNLR 365, 370, did not justify refusing the amendment without addressing the same-facts question.
3. Where a cause of action was already pleaded and had not been struck out, the claimant was entitled, and if relying on it was bound, to quantify and particularise the damage. Questions concerning whether Mr Gibrail could properly advance particular losses in his own name required assessment of whether the claims were sustainable, rather than wholesale refusal of permission.
4. Causation could not extend indefinitely to every loss that would not have occurred but for the alleged wrongdoing. Losses dependent on speculation about the outcome of a completed takeover were not sustainable. The court permitted pleading of the purchase of shares, the asserted loan to Nightingale, legal expenses already paid, and arguable wasted costs, while leaving ultimate recoverability for later determination.
5. Stress, suffering, loss of enjoyment of life, the indignity of bankruptcy and associated publicity were ordinarily outside the ambit of a solicitor’s contractual retainer. Such loss could fall within the parties’ contemplation in an appropriate case, but no such circumstances were present here.

Permission to re-amend the defence and counterclaim was therefore granted only in the specified respects.

1. Court of Appeal (Civil Division) — On 4 July 2003, permission to appeal was granted and the appeal was allowed. The judgment refusing permission to re-amend was set aside, and permission to re-amend the defence and counterclaim was granted on a limited basis: [2003] EWCA Civ 1145.
2. Judgment below — His Honour Judge Kershaw refused permission to re-amend the defence and counterclaim, relying on possible limitation and assignment difficulties.