Ridgewood Properties Group Ltd & Anor v Kilpatrick Stockton Llp & Ors

A claim for professional negligence may amount to an abuse of process where proving the alleged loss would require the claimant to challenge factual findings made in earlier litigation, despite the later claim being formally against different defendants. The question is one of substance, not form. The court should consider whether the claimant had a proper opportunity to advance the relevant case previously and whether an appeal was realistically available. A collateral challenge may also be permitted where genuinely new evidence entirely changes the aspect of the case and could not reasonably have been obtained earlier. On a summary judgment application, the court must assess whether there is a realistic prospect of success without conducting a mini-trial, while considering evidence reasonably expected to be available at trial.

The claimants alleged that their legal advisers negligently failed to advise them to accept an alleged repudiatory breach of agreements concerning development opportunities. They claimed damages for the lost opportunity to terminate the agreements and pursue a claim against the contracting counterparty.

Earlier proceedings against that counterparty had been determined by Proudman J. The claimants’ proposed case required them to contend that, had they terminated the agreements, they would have had a valuable chance of obtaining planning permission and developing the sites. The defendants applied to strike out that head of loss as a collateral attack on Proudman J’s findings, alternatively for summary judgment.

1. Collateral attack. The claim was an abuse of process under CPR r. 3.4(2)(b). In substance, proving the lost-opportunity claim required the claimants to establish that the earlier findings about the failure to obtain planning permission were wrong. The issue depended on substance rather than pleading form.
2. The applicable principles were those identified in Secretary of State for Trade and Industry v Bairstow [2004] Ch 1. A collateral challenge may be abusive where the claimant had a proper opportunity to advance the relevant case in the earlier proceedings and permitting re-litigation would bring the administration of justice into disrepute. The reasoning in Laing v Taylor Walton [2007] EWCA Civ 1146, [2008] PNLR 11 was binding and materially applicable.
3. The claimants had given evidence about their attempts to obtain planning permission, had opportunities to adduce further evidence at later hearings, and had been granted permission to appeal. Their financial difficulty did not justify suing the professional advisers instead of appealing. The proposed new evidence did not satisfy the Phosphate Sewage Co Ltd v Molleson (1879) 4 App Cas 801 test: it did not entirely change the aspect of the case and could reasonably have been obtained earlier.
4. Summary judgment. If the strike-out conclusion were wrong, summary judgment would be granted in relation to every site except Caledonian Road and Dome. The court applied the realistic-prospect principles stated in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch). The evidence showed no realistic prospect of proving a valuable lost chance for the other sites. There remained an arguable case for Caledonian Road and Dome.
5. Paragraph 62(1) was therefore struck out as an abuse of process. After circulation of the draft judgment, the claimants discontinued the claim. The court nevertheless handed down judgment because it contained useful analysis of collateral attack and was in the public interest.

Not stated in the judgment. The decision was a first-instance determination of interlocutory applications in the High Court.