AXA Insurance (UK) Plc v Cunningham Lindsey United Kingdom

Applications to amend pleadings shortly before trial should be assessed by reference to the nature of the proposed case and the prejudice caused by allowing it. Under the CPR, a defendant should plead a positive case on quantum and causation rather than merely deny quantum. Amendments may be allowed where the issues have been open for a substantial period and can be answered without prejudice. They should be refused where new allegations would require evidence that the opposing party cannot fairly obtain at that stage, particularly where an existing witness is also the expert whose conduct is challenged. A limited amendment may nevertheless be permitted where it responds directly to late expert evidence and the opposing witness can fairly address it.

The defendant applied shortly before the start of a trial arising from alleged professional negligence in the reinstatement of a subsidence-damaged farmhouse. The claimant sought substantial damages, alleging that the defendant loss adjusters caused or contributed to the increased reinstatement costs.

The proposed amendments advanced positive allegations concerning quantum and causation. They alleged that instructions given to, or work undertaken by, the claimant’s later consultants broke the chain of causation or constituted a failure to mitigate loss. The claimant objected on the ground of irredeemable prejudice, as its principal engineering witness was also the expert whose conduct would be challenged and no independent expert had been retained.

The central issue was whether, and to what extent, the defendant should receive permission to amend its Defence at that late stage.

1. Application granted in part. Permission was granted for the amendments on the first page of the draft, except for the unparticularised allegation concerning the claimant’s or its consultant’s failure to control or limit the work and costs.
2. Since the introduction of the CPR, defendants are expected to plead positive cases on quantum. A bare denial of quantum is no longer sufficient where the defendant relies on matters said to affect the amount of loss.
3. The proposed allegations concerning the later consultants’ alleged failures were advanced as a case that the chain of causation had been broken. The judge made no determination on whether negligence by an expert adviser or designer must be established before such a case could succeed.
4. Those allegations were refused, save for limited amendments concerning Glenborough Estates. Allowing the wider allegations on the third day of trial would cause irredeemable prejudice. The claimant’s factual witness and expert, Mr Kirwin, would be required to answer allegations concerning his own conduct, without the benefit of an independent engineering expert. Obtaining such evidence at that stage would cause major disruption and likely require an adjournment.
5. The allegations concerning Glenborough Estates were allowed because they arose in response to matters first raised in Mr Kirwin’s late supplementary report concerning newly disclosed files. The defendant was entitled to address those matters. The permitted amendments were confined to subparagraphs (b), (d) and (f), insofar as they related to Glenborough Estates, and did not extend to Pearce.