Mason & Ors v Mills & Reeve (A Firm)

Permission to amend pleadings may be granted where the amendment identifies the real dispute and any prejudice to the opposing party can be addressed through costs, directions and an adjournment. Lateness is an important consideration, but it is not decisive. The court must balance the injustice of refusing an arguable case against the practical prejudice caused by allowing a new case. A previous application that was withdrawn without adjudication does not ordinarily prevent a later application, although the earlier history remains relevant to the exercise of discretion.

The claimants brought professional negligence proceedings against their solicitors concerning tax advice given in connection with a management buy-out. During the opening of the trial, the claimants advanced a case which was not contained in their existing pleading. They sought permission to re-amend the Particulars of Claim to plead that the defendants should have advised generally about the inheritance-tax and capital-gains-tax consequences of converting business-property-relief assets into non-relieved consideration.

The application was opposed on the grounds that the proposed case had not been supported by evidence, was made very late, had previously been withdrawn before another judge, and would cause prejudice. The central issue was whether permission should be granted subject to evidence and case-management conditions.

1. Application granted. Permission was granted to re-amend the Particulars of Claim in the proposed form, subject to the claimants producing evidence within 10 days showing that the new case had a reasonable prospect of success. The trial was adjourned and directed to recommence on 17 January 2011.
2. The proposed pleading disclosed an intelligible cause of action and set out the case sufficiently clearly for the defendants to plead to it. The absence of evidence supporting a reasonable prospect of success justified a condition on permission, rather than refusal, because that deficiency arose from the fact that the case had only just been advanced.
3. The governing approach was that cases should be dealt with justly under the overriding objective. Amendments should generally be allowed so that the real dispute can be adjudicated, provided prejudice can be compensated in costs and the administration of justice is not significantly harmed. This approach was drawn from the observations of Peter Gibson LJ in Cobbold v Greenwich LBC (unreported, 9 August 1999).
4. The lateness of the application and the need for an adjournment were important factors. They did not justify refusal because the delay was relatively short, the defendants could meet the new case before the resumed trial, wasted costs would be paid, and the additional evidence was unlikely to be extensive. The fact that the case was being presented differently did not itself constitute actionable prejudice.
5. The earlier application before HH Judge Kaye QC had not been adjudicated upon. The claimants’ withdrawal of that application therefore did not preclude the present application, although the procedural history was relevant to the discretionary assessment. No estoppel or limitation prejudice was established.
6. The injustice to the claimants of being forced to try the case on an artificially restricted pleading outweighed the practical prejudice to the defendants. Permission was accordingly granted on the stated terms.

This was a first-instance decision on an application made during the trial. The judgment records an earlier unadjudicated amendment application before HH Judge Kaye QC, but no appeal or prior determination of that application.