Late amendments, strike outs, summary judgment & remote heads of loss

News | Fri 14th Oct, 2016

The High Court has recently handed down judgment in Gonul Guney v Kingsley Napley & Anor [2016] EWHC 2349 (QB). This was a professional liability claim based on the Claimant’s retainer of the Defendant solicitors, in respect of litigation concerning the estate of the Claimant’s father. It touches upon a number of issues of interest to those involved in a broad range of civil litigation.

Mrs Justice McGowan recited that in very simple terms that action is based on the Defendants’ alleged negligence, it having been alleged that had she been properly advised the Claimant would have settled a claim brought by a third party at a much earlier date and thereby avoided liability for the Defendants’ costs after that date as well as those of the said third party.

The court was faced with cross applications:

• By an application issued on 12 April 2016, the Defendant “applied for summary judgment against and/or to strike out of parts of the claim in relation to various heads of loss…”
• The Claimant “[a]s late as 31 August 2016… served an application for permission to re-amend the Particulars of Claim. By this new application she seeks to introduce two new aspects to the claim.”

The Claimant argued that the proposed amendments should not be regarded as truly late, as they would not cause the trial to be derailed, that the same would only have limited impact on the case, and turn on factual evidence from the Claimant and family members, and the same were necessary to ensure justice is done between the parties.

The Defendant diametrically-opposed submissions were that the proposed amendments were both fundamental and too late. In addition, they submit that there are entirely at odds with the pleaded case.

McGowan J produced a summary of the law pertaining to such applications:

• “The imperative of strict adherence to the rules of procedure governing the conduct of litigation has changed substantially in recent years. … Inaction or flawed action can now be penalised even without proof of serious consequential effect on the litigation [Mitchell and Denton considered] … Delay will meet with less tolerance and intervention to ensure that only those matters which should be litigated are… The rules are not inflexible but will be enforced strictly, more strictly than before…” (paragraph 17)

• “It is a balancing act between competing factors and is a matter of discretion. … It is no longer acceptable to use the test advanced by the Claimant in this case that if the trial date can withstand the amendments, they should be allowed without more. If the date fixed for trial is to be lost, then the factors would need to be extremely compelling. …” (paragraph 18)

• “In this application there is no reason given for the lateness of the proposed amendments. Nothing is raised in the application that could not have been pleaded in the original or amended Particulars of Claim. No explanation is given for the omissions or the delay…” and that the point was of great significance and if allowed “[t]he entire nature of the litigation would have been different” (paragraph 19)

• It was not accepted “that all evidence, factual and expert can be obtained and exchanged within a timeframe that does not imperil the trial date…”  (paragraph 20)

• “A compelling factor, capable of determining the outcome is much more likely to be admitted that a “kite being flown” in forensic terms” and “There is nothing compelling in the amended claims that would be pursued if these amendments were allowed” (paragraph 21)

The learned judge held as to the Claimant’s application to amend was manifestly made as a reaction to and in an attempt to defeat the Defendant’s Applications, and were “misconceived and much too late in the protracted history of this litigation” (paragraph 26).

In respect of the Defendant’s Applications, it was held that its applications for summary judgment and/or strike out are made in good time.

The court gave summary judgement as to two aspects of the claim relating to whether the Defendant breached its fiduciary duty and an alleged lost opportunity to share in the increase in value of estate property.

The Court struck out the claim for loss of profits brought by the Claimant (a solicitor herself) to her own practice in assisting the gathering of evidence for the case. It was held that the Defendants had not “been put on notice that this was having a detrimental effect on her own practice and it was never in the contemplation of the parties that they had assumed such a risk. Even if they had been made aware of such a risk it is too remote from the duties they assumed to include this. In any event this has never been particularised and still remains an assertion without evidence.” (paragraph 24)

The Court also struck out the claim for damages for stress and inconvenience. It held “Such general damages are irrecoverable. This was a not a contract for the provision of a holiday, a pleasurable activity relaxation or peace of mind. … This was a contract to act in relation to a family dispute over inheritance matters. It is too remote to say that solicitors conducting litigation assume liability for the stresses that that imposes on the litigants involved. It is difficult to imagine what would happen to litigation if there was such a general duty. The Claimant denies that this is a personal injury claim and relies on Malyon v Lawrance, Messer & Co [1968] QBD 2 539 but that was a case in which the litigant claimed damages for the aggravation of his injuries by the solicitors’ negligent delay when those injuries were the cause of action in the case. This claim discloses no reasonable ground and has never been particularised.”

The judgment is available at http://www.bailii.org/ew/cases/EWHC/QB/2016/2349.html.