Criterion Buildings Ltd v McKinsey & Company, Inc. United Kingdom & Anor

Permission to amend a statement of case is determined by weighing all relevant circumstances under the overriding objective. The court balances the applicant’s prejudice if permission is refused against the need for finality, the prejudice to other parties and the interests of other litigants.

Lateness is relative, but the burden on the applicant increases as the application is made later. An amendment is very late where it risks disrupting the trial or imposes substantial additional work shortly before trial. The court should assess the proposed case’s prospects, the explanation for delay, prejudice, clarity and proportionality. It should not conduct a mini-trial.

The claimant sought payment of service charges allegedly due under a commercial lease. The defendants applied shortly before trial to re-amend their defence in two respects: an allegation that commissions paid to a group company inflated service-charge costs, and an allegation that some exterior works were the tenant’s responsibility.

The court considered the strength of each proposed defence, the explanations for delay, the work required before trial, the sums involved and the risk to the trial timetable. The central issue was whether justice and the overriding objective required permission to re-amend despite the lateness of the applications.

1. The application to re-amend the defence was refused in its entirety. The claimant was awarded the costs of the application, summarily assessed at the hearing.
2. The court adopted the approach approved in Nesbit Law Group LLP v Acasta European Insurance Co Limited [2018] EWCA Civ 268 and summarised in Quah Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm). All relevant circumstances had to be considered, balancing the injustice to the applicant against finality, prejudice to other parties and the interests of other litigants.
3. The relevant considerations included the proposed amendments’ real prospects of success, the timing and reasons for delay, prejudice to the parties and litigants generally, and the clarity of the amendments. The relative weight of those factors depended on the degree of lateness.
4. The commission issue was arguable and reasonably strong. Nevertheless, the defendants had the material raising the issue much earlier and had no good reason for the delay. The claimant would face improper pressure in the four weeks before trial, while the likely prejudice to the defendants was comparatively small.
5. The works issue had a real prospect of success, but its resolution would require substantial factual investigation concerning unjust enrichment and estoppel. The amendment was very late, the explanation was inadequate, the additional burden was significant, the trial date might be jeopardised, and the amount at stake was disproportionate.
6. The court was not required to conduct a mini-trial on the proposed issues. It was sufficient to make a provisional assessment of their strength for the purpose of evaluating prejudice.