Swain-Mason & Ors v Mills & Reeve (a firm) (Rev 1)

A party seeking to introduce a new and significantly different case at the opening of trial bears a heavy burden. The court must balance justice to the applicant against prejudice to the opponent, disruption to other litigants and the reasons for the delay. Costs will not invariably compensate for a last-minute adjournment.

Any very late amended pleading must itself state the new case clearly and fully when permission is sought. Later evidence or particulars cannot cure an inadequate pleading. If a case-management discretion is vitiated by legal error, the appellate court ordinarily re-exercises it by reference to the material available when the original decision was made. A late summary judgment application need not observe the usual timetable where proper notice and time to respond are given.

The claimants brought a professional negligence claim against their former solicitors. They alleged that, before a management buy-out, the solicitors should have advised that the transaction's tax consequences would be affected if the principal shareholder died after completion. He died shortly afterwards during a heart procedure, and his estate incurred inheritance tax and capital gains tax liabilities.

The original pleaded case depended on the solicitors' knowledge of his health and forthcoming procedure. At the opening of the rescheduled trial, the claimants sought to plead a wider duty arising independently of those matters. Peter Smith J conditionally permitted the re-amendment in [2010] EWHC 3198 (Ch). He later refused to disallow it and dismissed the defendants' application under Part 24 of the Civil Procedure Rules.

The appeals concerned the proper approach to an extremely late amendment, the adequacy of the new pleading, summary judgment on the original case and an application to add a ground alleging apparent bias.

1. Disposition. The appeals against permission to re-amend and the refusal to disallow the re-amendment were allowed. The appeal against refusal of summary judgment on the original claim was dismissed. Lloyd LJ delivered the judgment, with which Elias and Patten LJJ agreed.
2. A court considering a very late amendment must balance justice to all litigants. As established in Worldwide Corporation Ltd v GPT Ltd [1998] EWCA Civ 1894, the applicant bears a heavy burden where a new and significantly different case is introduced at the opening of trial. The court must consider why the case was not pleaded earlier, its apparent strength, prejudice to the parties and disruption to other litigants. Payment of wasted costs may not compensate an opponent for delay and continued exposure to litigation.
3. A very late amended pleading must itself satisfy the requirements of proper pleading. It must immediately give the opponent sufficiently clear and detailed notice of the case to be met. Deficiencies cannot be left to evidence, subsequent particulars or volunteered information. The proposed pleading was compressed, equivocal and capable of advancing two materially different schemes. Its inadequacy was fatal to the application.
4. The judge misdirected himself by applying an unduly permissive approach to late amendment and by treating the pleading as adequate. His conditional permission was also based on an understanding of the proposed case which differed from the case later supported by expert evidence. The Court of Appeal therefore re-exercised the discretion as at the dates of the challenged orders. Later preparation undertaken in compliance with those orders could not justify preserving orders which should not have been made.
5. The original professional negligence claim remained arguable. Its viability depended on what the deceased believed about the operation's risk and what the solicitors knew or ought to have understood at the material time. Later expert evidence that the objective risk was negligible did not justify summary judgment. A Part 24 application made at this late stage did not have to comply with the timetable appropriate to an early application, provided proper notice and time to respond were given.
6. The proposed apparent-bias ground was not made out. A judge deciding professional negligence issues may draw on relevant professional experience, but should disclose the extent of any particular experience relied upon so that it can be addressed. The judge's unjustified description of the applications as abusive and his robust language did not cause the reasonable informed observer to suppose that there was a real danger of bias.
7. The claim was directed to proceed on the original pleading before a different judge. Any further case-management application was also to be determined by a judge other than Peter Smith J.

1. Court of Appeal (Civil Division). In Swain-Mason & Ors v Mills & Reeve (a firm) (Rev 1) [2011] EWCA Civ 14, the court unanimously allowed the appeals concerning re-amendment, set aside the relevant orders and directed that the claim proceed on the original pleading before a different judge. It dismissed the appeal concerning summary judgment.
2. High Court, Chancery Division. Peter Smith J conditionally permitted the claimants to re-amend their Particulars of Claim, giving reserved reasons in [2010] EWHC 3198 (Ch). He subsequently refused to disallow the amendments and dismissed the defendants' Part 24 application.