Carr & Ors v Formation Group Plc & Ors

For limitation purposes, a claim form stops time only for a cause of action whose nature is stated in the form. A concise statement need not name the cause of action, but it must identify its essential elements, including the relevant wrongdoing or breach of duty. The court may construe the claim form objectively and consider contemporaneous background material and particulars of claim, especially where served promptly. That approach does not extend to a solicitor’s later letter which formulates a new claim. If a claim is removed from the claim form by amendment, its later reintroduction is treated as a new claim for limitation purposes.

The claimants brought proceedings concerning undisclosed commissions allegedly paid to an agent by financial advisers. The Fourteenth Claimant, Mr Short, pursued Formation Group plc for unconscionable receipt, dishonest assistance, joint tortfeasor liability and unlawful means conspiracy. The underlying wrongdoing occurred before 2010, and Mr Short accepted that he discovered it in 2010.

A 2015 claim form contained broad allegations concerning undisclosed commissions and fiduciary breaches. An allegation of conspiracy was later removed by amendment. Following an order for the commission claims to proceed separately, a new claim form was issued in March 2018. The issue was whether the additional causes of action had been stated in the 2015 claim form so as to avoid limitation.

1. Disposition. The claim for unconscionable receipt was not summarily disposed of, since the First Defendant accepted that its nature had been stated in the 2015 claim form. The claims in dishonest assistance, joint tortfeasor liability and unlawful means conspiracy were treated as made in March 2018. Mr Short had discovered the wrongdoing in 2010, so those claims were out of time and were dismissed.
2. Concise statement. Under CPR 16.2(1), a claim form must state concisely the nature of the claim and specify the remedy sought. It need not identify the technical cause of action, but it must state the essential elements of the alleged wrongdoing. The court followed the approach in Nomura International plc v Granada Group Ltd [2008] Bus LR 1, informed by the earlier authorities on writ indorsements.
3. Construction. A claim form is construed objectively. The court may consider relevant background facts and particulars of claim served at or about the same time, consistently with Evans v Cig Mon Cymru Ltd [2008] 1 WLR 2675 and Travis Perkins Trading Co Ltd v Caerphilly County Borough Council [2014] EWHC 1498 (TCC). That favourable approach could not be extended to a detailed letter before action sent many months later.
4. Application. Dishonest assistance required an allegation that the defendant assisted another’s breach of fiduciary duty dishonestly. The 2015 claim form did not state that essential element. After paragraph 14 was removed, it also failed to state that Formation Group was liable as a joint tortfeasor pursuant to a common design, or that it was liable for conspiracy. Reintroducing a claim removed by amendment was equivalent, for limitation purposes, to introducing a new claim.
5. Costs. The claimants recovered costs relating to the unsuccessful unconscionable-receipt application and the request for further information. The First Defendant recovered 80% of its costs from Mr Short on the issue concerning the other causes of action.