Allsop v Banner Jones Ltd (t/a Banner Jones Solicitors)

A professional negligence claim arising from civil litigation is not presumptively abusive because it requires scrutiny of an earlier judgment. Where the parties or their privies differ, the inquiry is whether the subsequent proceedings would be manifestly unfair or bring the administration of justice into disrepute. The stringent fresh-evidence test applicable to reopening a decision between parties bound by it does not govern that inquiry.

The merits should generally be considered before abuse of process. A claimant alleging that negligent litigation caused loss must show a real or substantial chance of a better outcome. Negligent preparation or omission of an argument must be distinguished from an attempt to rerun the same case. Advice about appealing also requires separate assessment: deficiencies in trial preparation do not themselves establish a viable appeal.

Terry Allsop brought contractual and negligence claims against Banner Jones Limited, his former solicitors, and a negligence claim against Rae Cohen, the barrister they retained. The claims arose from financial remedies proceedings between Mr Allsop and his wife, Aileen Allsop. District Judge Buxton ordered substantial lump-sum payments, including a reattribution reflecting stock-market losses. He also ordered maintenance pending payment and interest on overdue lump sums. Permission to appeal that order was refused by the District Judge and, on renewed application, by Judge Carr QC.

The defendants applied for strike-out and summary judgment. Judge Pearce, sitting in the High Court, struck out several allegations. He treated the stringent fresh-evidence test derived from Phosphate Sewage v Molleson, (1879) 4 App Cas 801, as governing whether the negligence proceedings were an abusive collateral attack.

Mr Allsop appealed the disposal of nine allegations. They concerned preparation of evidence about his stock-market losses, compliance with disclosure obligations, late instruction of counsel, interest and alleged double recovery, and advice about appealing a business valuation. The central questions were the proper abuse-of-process test and whether the challenged allegations disclosed reasonably arguable claims.

The appeal was allowed in part. Marcus Smith J delivered the judgment, with which Arnold and Lewison LJJ agreed.

1. The abuse-of-process jurisdiction requires attention to the particular circumstances. A collateral challenge to a civil decision involving different parties or privies is abusive only if relitigation would be manifestly unfair or bring the administration of justice into disrepute. Relitigation is not even presumptively abusive. The principles in Hunter v Chief Constable of the West Midlands Police, [1982] AC 529, and Secretary of State for Trade and Industry v Bairstow, [2003] EWCA Civ 321, governed the inquiry. The Phosphate Sewage test did not govern subsequent civil proceedings against strangers to the earlier litigation. Grounds 1 and 2 therefore succeeded ([44]–[46]).

2. Merits and abuse of process are independent questions. The merits should generally be considered first. Abuse concerns whether even a potentially successful claim would be manifestly unfair or damage the administration of justice. In civil, including matrimonial, litigation, negligence proceedings will seldom attract that objection. A genuine claim about omitted evidence or arguments differs from the repetition of the same case considered in Laing v Taylor Walton, [2007] EWCA Civ 1147 ([44]; [47]).

3. The allegation concerning preparation of evidence about stock-market losses disclosed an arguable breach and an arguable real or substantial chance of a better outcome. The inquiry concerned the evidence that should have been available, rather than the correctness of the decision on the evidence actually presented. Earlier adverse credibility findings did not foreclose that inquiry. Allegation A8 was reinstated subject to proper pleading. Any retained allegation about a subject access request had to identify what it would have revealed and why that information mattered. The claim was not abusive ([56]–[65]).

4. The alleged double recovery disclosed no arguable claim. Maintenance met living needs pending payment of capital, while interest reflected the value of withheld money and encouraged prompt payment. Those obligations addressed separate concerns. No omitted argument or evidence offering a real prospect of a better result was identified. The related failures to advise an appeal were also unarguable ([71]–[72]).

5. Section 23(6) of the Matrimonial Causes Act 1973 permitted the court to specify the interest rate. Judicial awareness of that discretion did not answer the allegation that advisers should have advanced reasons for a lower rate. Both breach and a real or substantial prospect of obtaining a lower rate were arguable. Allegations A13 and E3 were reinstated and were not abusive ([74]).

6. Negligent preparation and negligent advice about an appeal required separate assessment. The valuation-related appeal allegation lacked particulars of negligence and arguable actionable loss. Ground 5 failed. The disclosure and late-instruction allegations remained struck out because their disposal rested on lack of arguable merits, which success on the abuse grounds did not disturb ([77]–[86]).

• Court of Appeal: In [2021] EWCA Civ 7 , allowed the appeal in part. Reinstated allegations A8, A13 and E3, subject to proper pleading of A8, and upheld the disposal of the remaining challenged allegations.
• High Court: Judge Pearce, sitting in the Business and Property Courts in Manchester, gave judgment dated 19 July 2019. A consequential order dated 5 August 2019 partly allowed the defendants’ strike-out and summary judgment applications. Permission to appeal was refused below and granted by Arnold LJ on 8 November 2019.
• Underlying financial remedies proceedings: District Judge Buxton gave judgment on 16 October 2015 and made a consequential financial remedies order. He refused permission to appeal. Judge Carr QC refused the renewed permission application by judgment dated 6 May 2016.