Susan Blaine v Touchstone Corporate Limited

Particulars of claim must identify the facts necessary to establish a complete cause of action. In a professional negligence claim, this includes the specific breach, the counterfactual outcome that would have occurred without it, and the resulting loss. Generic allegations and reliance on later witness evidence are insufficient.

New allegations of breach must be pleaded in the particulars of claim, not introduced for the first time in a reply. A claim based on Financial Services and Markets Act 2000, section 138D, requires an alleged contravention of an FCA rule, rather than a section heading. Amendments lacking a real prospect of success, or which impermissibly double-count loss, should be refused.

The claimant alleged that defective advice caused her to enter expensive bridging loans to refinance a secured buy-to-let loan. She claimed breach of statutory duty, misrepresentation and deceit, and sought over £1 million, including loan costs and an alleged undervalue on the sale of her property.

The defendant applied to strike out parts of the amended particulars of claim and reply. The claimant sought permission to re-amend, including claims based on FCA rules, negligence, causation and loss, and to rely on retrospective valuation evidence. The central issues were whether the proposed pleadings disclosed viable causes of action and whether the amendments had a real prospect of success.

1. Outcome. The court permitted limited amendments, struck out the pleaded case based on section 39 of Financial Services and Markets Act 2000, struck out allegations based on FCA Handbook section headings, refused amendments unsupported by an adequate causation case, and struck out fresh allegations of breach introduced in the reply.
2. Pleading causation and loss. A claimant must identify the counterfactual scenario, explain what would have happened without the alleged breaches, set out the steps leading to the alleged better position, and plead the loss that resulted. The claimant had not committed to a counterfactual financing arrangement or explained how it would have been available. The proposed causation case was therefore inadequate.
3. Particularity of breach. Allegations must identify the particular matters said to constitute breach. Generic assertions that rules were breached did not enable the defendant to know the case it had to meet. A possible Part 18 request or later witness evidence did not cure the deficiency. The approach in Pantelli Associates Ltd v Corporate City Developments Number Two Ltd [2010] EWHC 3189 (TCC) was applied.
4. Statutory duty. Section 138D of Financial Services and Markets Act 2000 provides a cause of action for contravention of an FCA rule. A breach of an FCA Handbook section heading cannot found the pleaded statutory-duty claim.
5. Reply and amendments. New allegations of breach must be included in the particulars of claim. The fresh allegations in the reply were struck out, consistently with Martlet Homes Ltd v Mullaley & Co Ltd [2021] EWHC 296 (TCC). The court also refused amendments that double-counted bridging-loan costs.
6. Property value. Permission was granted to plead that the property had a market value of £1.7 million at sale. The issue was supported by the valuation evidence and was not suitable for summary determination at this stage. Permission to rely on expert evidence was deferred to the CCMC.
7. The claimant was permitted to make limited amendments concerning vicarious liability, section 49 of the Consumer Rights Act 2015, interest and the revised market-value case.