PSGS TRUST CORPORATION LIMITED v AON UK LIMITED & Ors

For limitation under section 14A of the Limitation Act 1980, constructive knowledge is assessed objectively by reference to a person with the general characteristics of the claimant. Separate claimants must be considered separately; one claimant’s deemed constructive knowledge cannot simply be attributed to another.

Whether professional advice and surrounding documents gave the requisite knowledge is ordinarily fact-sensitive. Context, the role of the advisers, the purpose of each piece of advice and the absence of an independent experience of loss may make the issue unsuitable for summary determination.

A continuing retainer does not ordinarily create a continuing duty to discover and correct an earlier negligent failure to implement pension-rule amendments validly.

The claimant, the current trustee of a pension scheme and assignee of claims belonging to the former trustee and sponsoring employer, brought negligence claims against professional advisers involved in pension-rule amendments made in 2003 and 2007.

The amendments were documented retrospectively. The claimant alleged that they should have been implemented by prospective deeds or resolutions and that the defendants negligently failed to advise and administer the scheme accordingly. It relied on section 14A of the Limitation Act 1980 and also pleaded a continuing duty of care lasting until the defendants’ retainer ended in 2015.

The defendants sought reverse summary judgment on limitation grounds and strike-out of the continuing-duty case.

1. Limitation application dismissed. The claimant had a realistic prospect of establishing that the section 14A limitation period ran from a later date of knowledge.
2. Section 14A requires each claimant’s actual and constructive knowledge to be assessed separately. Constructive knowledge is a statutory deeming process and cannot be treated as actual knowledge acquired by another claimant. The court could decide at trial whether information known to the former trustee should in fact have been communicated to the sponsoring employer.
3. The advice relied on by the defendants did not compel summary judgment. In context, it was arguable that the independent advisers had addressed the principle of the proposed amendments, while the defendants were responsible for their implementation. It was also arguable that the trustee was entitled to rely on its principal legal advisers and was not reasonably required to obtain further advice merely to second-guess them.
4. The documents had to be assessed in their factual and temporal context. Analysing them side by side under an artificial forensic spotlight risked overlooking their different purposes, the substantial time gaps and the parties’ understanding at the relevant times.
5. Continuing-duty case struck out. Applying Capita (Banstead 2011) Limited v RFIB Group Limited, the defendants’ alleged duty to ensure valid implementation was breached when the defective amendments were made. A continuing retainer did not create a fresh daily cause of action or a continuing duty to revisit and correct the earlier advice. Paragraph 77 of the draft Re-Amended Particulars of Claim was therefore struck out.
6. The distinction between different entities within the defendants’ group did not alter that conclusion. James Cropper Plc v Aviva Life and Pensions UK Limited provided no assistance because the issue had not been argued there and Capita had not been cited.