The claimant was made bankrupt and a property, of which he was the freehold owner, became part of the bankruptcy estate and vested in the trustee in bankruptcy. The court made orders for possession and sale of the property. The claimant sought advice over an appeal against both orders from a law centre which instructed the defendant . In April/May 2011 the defendant raised a possible ground of appeal under section 283A(3) and (4) of the Insolvency Act 1986 but advised that “the litigation was a risk, although it was winnable”. At that stage his strategy was to obtain permission to appeal and, if that was granted, to endeavour to settle the case before the appeal hearing itself. The appeal, however, was set down in a rolled-over hearing. In October 2011 when there was more material available the defendant gave his final written advice again setting out his optimism as to the section 283A(3) and (4) argument. The legal aid certificate was increased accordingly. The appeal failed. The claimant brought proceedings in negligence. The allegations were based, without any distinction made between them, on the advice given in April/May 2011, and the written advice of 26 October 2011. The claimant accepted that any claim based on the advice of April/May 2011 was statute-barred, but that the claim arising out of the 26 October advice was not and was itself causative of loss, namely costs incurred in relation to the appeal, which would not otherwise have been incurred. The allegations set out in one paragraph of the particulars of claim, therefore, were to be taken as related solely to the 26 October advice. The complaint was that the defendant’s advice was negligently optimistic and that, on a proper analysis of the law and the CPR, the appeal based on the section 283A(3) and (4) argument was hopeless. The defendant applied to strike out the paragraph, or alternatively sought summary judgment on the allegations it contained, on the grounds that the claim was statute-barred and that, on a proper understanding of the principles, it was not arguable that the defendant had been negligent in any event. The master held that the claim was statute-barred on the grounds that it was not possible to treat the 26 October advice as “a new and supervening act or omission” giving rise to a new cause of action. The judge dismissed the claimant’s appeal on the grounds that there was only one relevant appeal and that the pattern of advice in respect of the prosecution of the appeal was continuous from April 2011 and continued with the advice of 26 October 2011; that the cause of action in respect of the alleged hopeless appeal had already accrued before the 26 October 2011 advice, and that the claimant had no prospect of succeeding on that part of the claim as it was statute-barred, and, accordingly, the master was correct in dismissing the same on that basis pursuant to CPR r 3.4(2)(a) and/or CPR r 24.2.
On the claimant’s second appeal—
Held, appeal allowed. The case law on section 2 of the Limitation Act 1980 established that where a defendant’s breach of duty had caused a claimant some loss outside the limitation period, the fact that further loss was caused by that same breach within the limitation period would not save the claim from being statute-barred. What was more, that result could not generally be avoided by the suggestion that there was a continuing duty on the part of the lawyer to review his or her previous advice. In a situation where there were two alleged breaches of duty, one outside the six-year limitation period, and one within it, there was no reason in law why a claim for the damages caused by the later breach should not succeed. The general principle had to be that a claim based on negligent advice, given to and relied on by a claimant during the relevant limitation period, gave rise to a valid claim. In a case where there were two (or more) allegedly negligent advices, and therefore two separate breaches of duty, there was no general principle of logic or common sense which required any sort of “relation back”, such as to say that the limitation period was triggered by the first occasion on which the negligent advice was given, regardless of any subsequent breaches of duty. There was no authority to support the proposition that, if there were two advices, the cause of action accrued at the time of the first and the second was irrelevant. In the present case the master had applied the wrong test having relied on “a new or supervening act or omission” which was not relevant. That observation should not be treated as giving rise to a test or touchstone for courts to adopt when considering whether a second act or omission had given rise to a second accrued cause of action and, if so, when that cause of action accrued. Further the judge had been wrong to focus on the fact that there was just one appeal and that, once the appeal had been launched, the claimant’s position was somehow irremediable. As a matter of principle and on the facts of the present case the claim limited to the losses caused by the alleged negligent advice on 26 October was not statute-barred (paras 50, 51, 60, 62, 63, 68, 72, 78, 81–83, 101, 102, 105).
St Anselm Development Co Ltd v Slaughter and May [2013] EWHC 125 (Ch); [2013] CN 158 and Khan v RM Falvey & Co [2002] Lloyd’s Rep PN 623, CA considered.
There was no authority which suggested that, because of the absence of expert evidence, allegations of negligence against a solicitor or a barrister were ordinarily capable of being resolved by way of summary judgment. It was not wrong in principle for the master and the judge to decline to deal with the merits of the allegations by way of summary judgment. Moreover, the master was entirely right to say that, in a case like the present, the question of context was very important. The April/May advice was clearly focused on getting permission to appeal and then negotiating. There was also clear advice as to the financial risks for the claimant. But the position in October was different and required the defendant to stand back and consider the situation in the round, prior to the rolled-up hearing. A trial of the allegations of negligence in October 2011 would require a detailed consideration of that context and factual background (paras 88, 95, 97, 101, 102, 105).
Alexander Hill-Smith (instructed by Osmond & Osmond Solicitors) for the claimant.
Nicholas Davidson QC (instructed by Clyde & Co LLP) for the defendant.