Evans & Anor v Pricewaterhousecoopers LLP

After expiry of a limitation period, an amendment introducing a new claim may be permitted only where it arises from the same or substantially the same facts as an existing claim. The comparison requires close factual analysis and must reflect the purpose of protecting a defendant from investigating matters outside the scope of the original claim. An amendment which merely particularises an existing breach or clarifies the factual narrative may be allowed. The court may refuse an amendment that creates contradictory pleadings or places the defendant in an unnecessary quandary. Costs should ordinarily be determined separately where different applications raise materially different considerations.

The claimants sued Pricewaterhousecoopers LLP for negligence and breach of statutory duty arising from tax advice concerning a failed tax-avoidance scheme. Following an earlier decision, [2019] EWHC 1505 (Ch), the surviving claim concerned alleged breaches from 1 January 2003 onwards, after the defendant LLP began acting for the claimants. The claimants sought permission to re-amend their Particulars of Claim. The court also determined costs arising from the earlier strike-out, amendment and substitution applications. The central issues were whether the proposed amendments introduced new claims barred by limitation, whether they arose from the same or substantially the same facts, and whether they should be allowed under the applicable procedural discretion.

1. Amendments after expiry of limitation. Under CPR 17.1(2)(b), the court has a general discretion to permit amendments which do not introduce a new claim. Where an amendment introduces a new claim after expiry of the relevant limitation period, CPR 17.4(2), giving effect to section 35 of the Limitation Act 1980, permits it only if the new claim arises from the same or substantially the same facts as an existing claim.
2. The expression same or substantially the same facts requires analysis and involves a value judgment. The relevant purpose is to prevent a defendant, after expiry of limitation, from having to investigate facts and obtain evidence outside matters it could reasonably have been expected to investigate in defending the original claim. The approach in Paragon Finance PLC v DB Thakerar & Co and BP Plc v Aon Ltd was applied.
3. The proposed allegation that the defendant should have advised the claimants to sue the former adviser was a new cause of action, but arose from the same advice and events already requiring investigation. It was therefore permitted. An allegation that the defendant should have advised payment of the tax liability was treated as a particular of the existing negligence claim and was also permitted.
4. Proposed amendments referring to voiding and reimplementing the share sale and tax scheme were refused. They introduced an idea inconsistent with the existing pleading that the claimants had been locked into the Canadian scheme. The court would not exercise its discretion to create manifestly contradictory pleadings or leave the defendant uncertain about the case it had to meet.
5. Amendments clarifying the continuing retainer and the period of alleged breaches were allowed. The claimants were substantially successful on the strike-out application and were awarded 80% of its costs. The defendant received its costs of its amendment application and of the claimants’ substitution application. Other costs remained costs in the cause.

This was a first-instance consequential decision following the court’s earlier judgment in [2019] EWHC 1505 (Ch). Permission to appeal that earlier decision was refused.