Versloot Dredging BV & Anor v HDI Gerling Industrie Versicherung AG & Ors (Rev 1)

Permission to make a very late amendment is a discretionary question requiring a fair balance between the applicant, the opposing party and other litigants. The court should consider the history and explanation for the delay, the prejudice if permission is refused, the prejudice if it is granted, and whether the proposed pleading is clear and properly particularised. A heavy burden rests on the party seeking a late amendment. Costs may not compensate for disruption to a fixed trial, delay in judgment, litigation uncertainty or serious financial prejudice. The court should also consider whether the amendment could and should have been advanced earlier.

The claimants sought insurance cover in respect of the vessel DC Merwestone. After the evidence at trial had concluded, the defendant underwriters sought permission to re-re-amend their defence to introduce a new non-disclosure case concerning alleged failures by the vessel’s officers and crew to comply with the safety management system.

The application was made shortly before final submissions and would have required further pleadings, disclosure, evidence and a further hearing. The central issue was whether the underwriters had justified permitting such a late amendment.

1. Application refused. The proposed re-re-amendment was very late and the underwriters had not discharged the heavy burden of justifying it.
2. The relevant principles, conveniently summarised in Brown v Innovatorone plc [2011] EWHC 3221, required the court to strike a fair balance. Relevant considerations included the history of the amendment and the explanation for delay, the prejudice to the applicant if refused, the prejudice to the opposing party if allowed, and the clarity and particularity of the proposed pleading.
3. The fact that the amendment arose from evidence given at trial did not justify the delay. The underwriters had been able to formulate the substance of the proposed non-disclosure case from earlier pleadings, expert evidence and witness statements. The later evidence added colour rather than a new factual foundation.
4. The prejudice to the claimants would have been substantial. The amendment would have required further particularisation, responsive pleadings, disclosure, witness statements, expert reports, recalled witnesses and a further three-to-four-day hearing. It would have delayed judgment until late 2013 or possibly 2014. The claimants had a legitimate expectation that the fixed trial would determine the defences advanced.
5. Following Ketteman v Hansel [1987] AC 189, costs could not necessarily compensate for such prejudice. The disruption to the trial and to other litigants was also relevant, as explained in Worldwide Corporation v GPT Limited [1998] EWCA Civil 189 and Swain-Mason v Mills & Reeve [2011] 1 WLR 2735.
6. The proposed pleading was itself unsatisfactory. It gave examples rather than proper particulars, did not identify the relevant crew members or the person whose knowledge was relied upon, and did not identify the source of that knowledge. Permission was therefore refused as unfairly prejudicial.