Williams & Anor v Lishman, Sidwell, Campbell & Price Ltd & Ors

On an application under CPR Parts 3 and 24, a claim may be disposed of summarily where the limitation defence shows that the claimant has no real prospect of success. The court must not conduct a mini-trial, but may assess the merits sufficiently to decide whether the claim should proceed.

For section 14A of the Limitation Act 1980, knowledge need not include knowledge of the legal allegation of negligence or its detailed mechanism. It is enough to know the material damage, the essence of the act or omission relied upon, and that there is a real possibility that it caused the loss. Constructive knowledge may arise where independent expert advice should reasonably have been obtained.

For section 32, a concealed fact must be relevant to the right of action itself, not merely evidence strengthening the claim.

The claimants alleged that financial advisers negligently advised them in 1997 to transfer pension funds from an executive pension plan into personal income drawdown plans. They claimed losses arising from the transfer and subsequent failures to advise. The claim form was issued on 16 October 2006.

The first and third defendants applied under CPR Parts 3 and 24. The first defendant sought disposal of the whole claim against it. The third defendant challenged the claims concerning the initial advice, while accepting that some claims based on continuing duties after 16 October 2000 were not statute barred.

The issues were whether the claims had a real prospect of avoiding limitation under sections 14A and 32 of the Limitation Act 1980, and whether the first defendant owed a continuing advisory duty until 7 April 2001.

1. Summary judgment. The approach under CPR Part 3.4 and Part 24 was the same. The claimants had to show a real, rather than fanciful, prospect of success. The court could consider the merits only as far as necessary and was not to conduct a mini-trial. The pleaded facts were assumed to be true for the applications.
2. Accrual and section 14A. The negligence claims accrued when the pension funds were transferred into the income drawdown plans on 21 November 1997, alternatively when the cooling-off period expired and the early surrender charges became payable. By the end of 2002, and at the latest by mid-2003, the claimants knew that their capital was seriously eroding and that they were substantially worse off than under the original plan. They therefore knew enough to appreciate a real possibility that the defendants’ advice or omissions had caused the loss and to begin investigating a claim.
3. Knowledge of the detailed legal character of the negligence was unnecessary. The claimants’ reliance on continuing reassurance from the third defendants did not amount to taking reasonable steps to obtain expert advice under section 14A(10), because the relevant advice had to be independent of the parties whose conduct was in issue.
4. Continuing duty. The first defendant remained on the product provider’s records as a joint agent and received some documents, but it had ceased servicing the arrangements after inception, gave no further advice and received no continuing commission. Those facts did not create an agency agreement or continuing advisory duty.
5. Section 32. The alleged concealment of early surrender charges did not postpone limitation. The claimants’ relevant cause of action concerned losses caused by the transfer into the income drawdown plans, not the earlier loss represented by liability for the charges. The charges were evidence or a separate loss, rather than a fact necessary to complete the pleaded right of action. The third defendants’ later conduct also could not constitute concealment of their role, which the claimants already knew.
6. The first defendant’s application succeeded. The whole claim against it was struck out and/or summary judgment was entered. Paragraphs 43 and 44 of the Particulars of Claim against the third defendants were struck out and/or summary judgment was entered on those claims.