Lenderink-Woods v Zurich Assurance Ltd & Ors

On an application for summary judgment, a limitation defence should not succeed where the claimant has a real prospect of proving that the relevant statutory knowledge was acquired within time. Knowledge must be assessed by reference to the claimant’s actual complaint, including the material facts of the damage and the causal relevance of the defendant’s acts or omissions.

Broad concern about poor investment performance, charges or the operation of an existing scheme does not necessarily amount to knowledge that the original advice was unsuitable or that a better alternative should have been considered. A claimant is not fixed with expert knowledge that an instructed adviser ought to have but did not provide. A professional-negligence claim should not be summarily determined without appropriate expert evidence where the applicable professional standard remains genuinely arguable.

Mrs Lenderink-Woods, aged 95, claimed against Zurich Assurance Limited and Zurich Advice Network Limited for allegedly negligent financial advice and careless misstatements concerning a loan trust scheme and investment bonds established in 2001 to mitigate UK inheritance tax.

Zurich applied for summary judgment under CPR Part 24, contending that the claim was time-barred under section 14A of the Limitation Act 1980 and that the claimant had no real prospect of establishing breach of duty under the Bolam test. The central issues were whether she had, or should reasonably have acquired, the requisite knowledge before 10 December 2011, and whether breach could be determined without expert evidence.

1. Application dismissed. The court dismissed Zurich’s application for summary judgment and directed that costs and further directions be dealt with by written submissions.
2. For section 14A of the Limitation Act 1980, the claimant had to show at trial that she first acquired the relevant knowledge after 10 December 2011. On the application, however, she only had to provide sufficient material to demonstrate a real prospect of doing so. Zurich therefore had to establish that the contrary case was fanciful.
3. The relevant knowledge had to be analysed by distilling the claimant’s actual complaint. That complaint was not simply that the bonds performed poorly, that charges were high, or that withdrawals eroded capital. It was that the scheme was suitable for a person domiciled in the United Kingdom but that, because of her domicile, simpler and more effective alternatives should have been considered.
4. The correspondence before the court showed concern about the operation and cost of the existing arrangement. It did not conclusively establish knowledge of the relevant alternative, of the adviser’s failure to investigate it, or of the causal connection between that failure and the alleged loss. The claimant therefore had a real prospect of proving that she lacked the requisite knowledge until advice received in February 2012.
5. Constructive knowledge did not mean that the claimant was treated as having received expert advice which she had not in fact received. If she reasonably obtained and acted on expert advice, she was fixed only with what that expert actually told her. Whether PMB Advisors had been instructed on the relevant issue, and what advice it gave, were matters for trial.
6. The breach argument also could not properly be summarily decided. There was no expert evidence establishing that the advice fell within differing and well-established professional schools of thought, and the Financial Ombudsman material did not address all the alleged alternatives or heads of loss. It was therefore inappropriate to conclude that the claim had no real prospect of success.