Williams v Lishman, Sidwell, Campbell & Price Ltd

For section 32(1)(b), the court must identify the loss that completed the negligence cause of action. A concealed charge does not postpone limitation as a separate first loss where it and the later loss from entering a riskier arrangement were incurred together. The ordinary six-year period therefore applied.

Under section 14A, knowledge can arise from serious capital erosion, awareness that the claimant is materially worse off, and a real possibility that the defendant’s acts caused the loss. Knowledge of the full future extent of the loss is unnecessary. The claimants had the necessary knowledge by the end of 2002 or, at latest, mid-May 2003.

The claimants transferred occupational pension funds through an intermediary insurer into personal income-drawdown plans following advice from the respondents. They alleged negligent advice and relied on section 32 because a transfer charge was deliberately concealed. They also argued that a later statement by one respondent concealed its role, and that their knowledge under section 14A did not extend to long-term loss.

On applications under CPR rules 3.4 and/or 24.2, His Honour Judge Reddihough struck out or summarily dismissed specified 1997 claims as time-barred. The appeal concerned whether the charge was an earlier loss capable of keeping section 32 engaged after a later loss, and when the claimants acquired the knowledge required by section 14A.

The Court of Appeal unanimously dismissed the appeal. The 1997 complaints against Lishman and Northern were time-barred, although other claims survived.

1. Section 32. Rix LJ held that the concealed £38,000 charge was not a distinct first loss. Following Shore v Sedgwick Financial Services Ltd [2008] EWCA Civ 863, [2009] Bus LR 42, the loss caused by leaving a secure pension arrangement for a riskier one was suffered when the relevant transfer was effected. The intermediate transfer through GA was merely a technical step. If the claimants had abandoned the scheme, all loss would have been avoided; if they completed it, the losses were incurred together. The charge becoming irrevocable on 3 November 1997 therefore did not create a prior concealed loss capable of postponing limitation.
2. The court considered the established ‘statement of claim’ test under section 32(1)(b): a concealed fact must be necessary to plead a complete cause of action, rather than merely strengthening the evidence or claim for damages. That issue did not determine the appeal because the alleged first and later losses were simultaneous.
3. Obiter analysis. Rix LJ considered that, if a first loss had been deliberately concealed and a later loss was not, section 32 might nevertheless continue to protect the combined cause of action. He regarded section 32 as taking precedence over sections 14A and 14B where it applied, consistently with the policy identified in Sheldon v RHM Outhwaite (Underwriting Agencies) Ltd [1996] 1 AC 102. He also noted that a separate cause of action concerning the concealed charge might have received separate protection, but none had been pleaded.
4. Section 14A. The judge’s factual findings were not challenged. By the end of 2002, and at the latest by mid-May 2003, the claimants knew that their pension funds were seriously eroding, that they were materially worse off than under the Prudential arrangements, and that the respondents’ acts or omissions might have caused the loss. That was sufficient knowledge to justify investigation and included the relevant long-term damage. The late-October calculations did not alter the position.
5. The alleged October 2003 concealment by Northern could not postpone limitation. The claimants had always known that Northern had participated in the 1997 advice.
6. Elias LJ agreed with the dismissal but suggested, without deciding, that relevance under section 32(1)(b) might include causal relevance to the decision to sue: ignorance could be relevant where it explained why proceedings had not been brought earlier. Moses LJ expressly declined to comment on these obiter observations.

• Court of Appeal (Civil Division): [2010] EWCA Civ 418 — dismissed the appeal.
• High Court of Justice, Queen’s Bench Division: His Honour Judge Reddihough, sitting as a High Court judge, struck out or summarily dismissed specified claims as time-barred on 12 June 2009.