National Westminster Bank Plc v Nederland

Lateness alone does not justify refusing an amendment. An arguable amendment needed to resolve a real issue should be allowed where it causes no significant prejudice, or any prejudice can be adequately compensated. A trial timetable remains important, but modest and manageable disruption does not outweigh the serious prejudice caused by preventing a party from advancing its full alternative case. Where the material facts are already pleaded, a new legal characterisation need not create a new factual investigation. Expert evidence is not automatically required to determine a professional duty where the judge can assess the duty from the instructions and circumstances.

NatWest claimed an indemnity for costs arising from United States proceedings and damages for breach of contract. Rabobank’s defence and counterclaim alleged fraud and breach of fiduciary duty and sought rescission of the parties’ transfer arrangements and damages.

During the trial, Rabobank sought permission to re-re-amend its pleading to add alternative claims that NatWest had procured Price Waterhouse to breach its professional duty of care and was liable as a joint tortfeasor. Colman J refused the application, principally because of its lateness, the possible need for expert evidence and disclosure, and disruption to the trial timetable. The issue on appeal was whether that case-management decision was justified by prejudice to NatWest or to the administration of justice.

Appeal allowed. The Court of Appeal held that Colman J had gone outside the considerable ambit of judgment available to him in refusing permission to advance the alternative claims.

1. The governing principle is that even a late amendment should be permitted where it is necessary to resolve a real issue and can be allowed without significant prejudice to the other party or the administration of justice. If prejudice exists, it may be addressed by adequate compensation, including costs. This principle was illustrated by Cobbold v London Borough of Greenwich [1999] EWCA Civ 2074.
2. The proposed claims were arguable and potentially relevant to a critical issue. The untidy and prolix character of the existing pleading was not, by itself, a sufficient reason to deny the amendment.
3. The proposed claims attached additional legal significance to facts already pleaded, particularly the alleged instructions at the meeting on 29 August 1996 and Price Waterhouse’s subsequent conduct. They therefore did not necessarily introduce a wholly new factual investigation.
4. The Court was highly sceptical that expert evidence was required to determine the scope of Price Waterhouse’s professional duty. The trial judge was likely to be as well placed as an accounting expert to assess that duty from the pleaded instructions and circumstances.
5. The possible disruption to the trial was limited and manageable. Any additional evidence would be likely to extend the trial by only a few days, if at all. That possibility did not justify the serious prejudice to Rabobank of being denied the opportunity to present its alternative case. The materially greater delay in Borealis AB v Stargas Ltd & M/V Berge Sisar [2002] EWCA Civ 757 did not govern the present application.

• Court of Appeal (Civil Division) — In [2006] EWCA Civ 1578, permission to appeal was granted and the appeal was allowed.
• High Court of Justice, Queen’s Bench Division — On 16 October 2006, Colman J refused permission to re-re-amend the defence and counterclaim during the ongoing trial.