Captain Nigel Collingwood & Anor v Irwin Mitchell LLP [2025] EWHC 1570 (Ch)

[2025] EWHC 1570 (Ch)Case No BL-2024-000708
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 24 June 2025
Before
MASTER TEVERSON(sitting in retirement)
Between
CAPTAIN NIGEL COLLINGWOODClaimantsEDGE ENVIRO SERVICES LTDClaimantIRWIN MITCHELL LLPDefendant
SARAH PARKER (instructed by Bond Solicitors) for ClaimantsNIAMH O’REILLY (instructed by Kennedys Law LLP) for DefendantHearing date 16 April 2025
JUDGMENTThis Judgment was handed down remotely at 10am on 24 June 2025. It was sent to the parties’ legal representatives by email and to National Archives.
[1]There are two applications before me:-(i) an application by the Defendant dated 11 December 2024 for summary judgment and/or strike out of the claim;(ii) an application by the Claimants dated 8 April 2025 for an order adding or substituting Rhealisation LLP as a defendant to these proceedings.[2]I shall first summarise the factual background based principally on the Particulars of Claim. In so doing I am not to be taken as making any findings of fact. The summary is to put the applications before me in context.[3]The First Claimant, Captain Nigel Collingwood, is a director of and the sole shareholder of the Second Claimant, Edge Enviro Services Ltd (“Edge”). Edge is a provider of environmental consulting activities, working with the marine industry to provide training, chemicals and spill kits and specialising in clearing up hazardous material, and pollution control.[4]In October 2011, Capt. Collingwood received an unsolicited call from a Mr Ryan Doyle of Anthony James Hall Limited seeking to persuade Capt. Collingwood that he should purchase a small self-administered pension scheme (“SSAS”). At that time, Capt. Collingwood had been considering purchasing an SSAS with the intention of raising £100,000 for Edge in order that Edge could contribute to the purchase of a specialist dredger in connection with a contract to dredge Ramsgate Harbour.[5]Capt. Collingwood entered into the SSAS (known as the Edge Group Pension Scheme) on or around 19 March 2012. He and Edge were the trustees of the SSAS. A Pension and Trust Reserve Account was opened for the SSAS with Investec Private Bank on or around 12 April 2012. The sum of £228,366.59 was transferred into that account from Capt. Collingwood’s previous pension provider on or around 11 May 2012.[6]On or around 16 May 2012, £130,000 was transferred on Capt. Collingwood’s instructions from the account to an account of SJL Risk Limited (“SJL”). On or around 22 June 2012 Capt. Collingwood made a second investment of £60,000 and on 16 October 2012, a further investment of £25,000.[7]On or around 26 July 2013 Capt. Collingwood became aware, through accessing records on the SJL website, that the investments that had been made on his behalf did not match those that he believed had been made.[8]In or around October 2013, Capt. Collingwood sought advice from Thomas Eggar LLP (“TEL”) and spoke to a Mr Thomas Barnard. TEL put Capt. Collingwood in touch with a company associated with TEL called Pallant Independent (“Pallant”).Pallant were financial advisers who TEL considered could help inform Capt. Collingwood “who the target of a claim should be (if any)”.[9]On 16 April 2014, Mr Barnard wrote to Capt. Collingwood to inform him that he had considered the situation with Ms Clipston, a partner at TEL, and provided a cost estimate for advising, including on issues of fraud.[10]On or around 23 April 2014 SJL went into liquidation.[11]On 9 May 2014 TEL sent Capt. Collingwood a terms of engagement letter. The Letter of Engagement stated that “there are at present no key dates relevant to the work to be carried out, but when reporting to you in the future, we will identify any that arise”.[12]On 12 June 2014 TEL provided to Capt. Collingwood written advice in the form of a report. The report considered the options available to Capt. Collingwood as a result of the conduct of AJH, the individual advisers at AJH and SJL.[13]On 13 June 2014 a meeting took place between Capt. Collingwood and Mr Barnard of TEL. A summary of the meeting was sent to Capt. Collingwood on 18 June 2014.[14]On 17 July 2014 Mr Barnard provided Capt. Collingwood with the details of the National Crime Agency to report a fraud by SJL and offered to assist Capt. Collingwood further.[15]Although not referred to in the Particulars of Claim, it appears from the file of papers in the possession of the Defendant that in or around September 2014 Capt. Collingwood provided TEL with an update and on 19 September 2014 TEL provided further advice in respect of the fraud and said that it might be able to assist on a “no win, no fee” type arrangement at some stage, but at that moment TEL was not confident of the prospects due to the number of unknowns and therefore could not offer such an arrangement. TEL set out the fees that it had incurred to date and said that if Capt. Collingwood required further advice in respect of the fraud then he should let TEL know. The Defendant understands that TEL did not hear further from Capt. Collingwood after Mr Barnard’s e-mail to Capt. Collingwood sent on 19 September 2014.[16]Irwin Mitchell LLP, acquired the business and trade of TEL by way of a Merger Deed dated 25 November 2015.[17]TEL changed its name on 15 January 2016 and is now known as Rhealisation LLP. It has company number 0C326278 and is a separate corporate entity to Irwin Mitchell LLP, a firm of solicitors and a corporate entity with company number 0C343897.[18]On 13 May 2024 the Claimants issued a claim form in the Business List of the Chancery Division naming “Irwin Mitchell (formerly “Thomas Eggar LLP”)” as the First Defendant and “Chief Constable of Surrey Police” as the Second Defendant.[19]The claim form provided under the heading “Brief details of the claim” that the Claimants were the victims of a pension fund investment fraud perpetrated in 2012 when the First Claimant was induced to set up a small self-administered pension scheme from which the sum of £215,000 was illegitimately paid away (“the Fraud”). Paragraph 2 of the brief details of claim stated that the Claimants sought legal advice from Thomas Eggar LLP, “now Irwin Mitchell LLP,” in connection with the Fraud. It alleged that the First Defendant “failed to exercise the skill and care to be expected of a reasonably competent solicitor in performing its duties to the Claimants by, inter alia, failing to advise as to issues of limitation in connection with the potential civil claims available to the Claimants and the claims available against all possible defendants”. It alleged that by reason of this failure, the Claimants suffered loss and damage.[20]As against the Second Defendant it was alleged that the Claimants had been incorrectly advised not to bring a civil action until after the Second Defendant had completed their investigations. The details of claim stated that the Second Defendant did not complete their investigations until 2022 by which time the relevant limitation periods had expired. The Claimants claimed against both Defendants damages for loss of opportunity to bring claims against the relevant defendants following expiry of the limitation period.[21]The claim form was not preceded by any pre-action correspondence. It was not until 3 September 2024 that the Claimants first notified Irwin Mitchell LLP of the issue of the claim. This was some 10 days prior to the expiry of the 4 month period for the service of the claim form. On the same day the Claimants gave notice discontinuing their claim against the Second Defendant.[22]Irwin Mitchell LLP responded by email on 3 September 2024 saying they had no knowledge of what the matter concerned. By letter dated 6 September 2024, the Claimants’ solicitor, Monica Bond, Principal of Bond Solicitors, gave a summary of the nature of the claim and stated that the claim form had been issued on 13 May 2024 to ensure the claim was issued within the relevant limitation period.[23]The limitation issue was further addressed by Ms Bond in a letter dated 10 September 2024 to Kennedys Law LLP (“Kennedys”), who had been instructed on behalf of Irwin Mitchell LLP on 9 September 2024. Ms Bond stated:- “Our Clients’ position is that they first suffered damage as of the date that the sum of £130,000 was paid away to one of the primary wrong-doers. That date was 16 May 2012. The claim therefore became time-barred by 16 May 2018 at the earliest. Whilst our Clients’ claim in fraud is likely to be subject to postponement under section 32 of the Limitation Act 1980, our Clients used the earlier date to prevent the question of limitation arising as an issue in the proceedings.” The letter stated that their clients’ claim in professional negligence therefore accrued on the date on which the limitation period expired. It said that based on that date, the Claimants sought to file a claim in professional negligence before the expiry of the six-year limitation period on 16 May 2024. The letter sought a stay of proceedings for 6 months to meet the aims of the pre-action protocol for professional negligence.[24]On 12 September 2024, Kennedys agreed to an extension of time for service of the particulars of claim until 13 November 2024 on the basis that the claim form was served within the prescribed period and on the basis that the Letter of Claim was received by 26 September 2024.[25]Later, on 12 September 2024, Ms Bond served the claim form on Kennedys by email sent at 18.04 and by post “on behalf of Irwin Mitchell LLP (formerly Thomas Eggar LLP)”.[26]Kennedys filed an acknowledgement of service on behalf of Irwin Mitchell LLP on 23 September 2024. By email sent on 23 September 2024 Kennedys replied to Ms Bond’s email of 12 September 18.04 stating that it was not correct that they had agreed to accept service on behalf of “Irwin Mitchell LLP (formerly Thomas Eggar LLP)”. They said they had agreed to accept service on behalf of Irwin Mitchell LLP. Kennedys further stated:- “Irwin Mitchell LLP was not formerly Thomas Eggar LLP. Thomas Eggar LLP is now known as Rhealisation LLP and is registered at Companies House with number OC326278, and is a separate legal entity to Irwin Mitchell LLP which is registered with number OC343897.” Kennedys also noted that the mandatory naming provisions of CPR PD 16 para 2.4 and CPR PD 7A para 4.1 did not appear to have been complied with. CPR PD 16 para 2.4 requires that for a company or limited liability partnership registered in England and Wales, the full registered name, including suffix (plc, Limited, LLP, etc) must, where it is known, be included in the title to the proceedings in the heading of the claim form.[27]The Claimants’ Letter of Claim was sent by Ms Bond to Kennedys on 26 September 2024. In paragraphs 74 to 77 inclusive the Letter of Claim responded to Kennedys’ email of 23 September 2024. Paragraph 75 referred to the Claimants’ understanding that Irwin Mitchell took over the trade and assets of TEL following “a publicised merger of the firms” and further understanding that Mr Barnard and Ms Clipston joined Irwin Mitchell at or around that time. Paragraph 76 stated that the Claimants were not aware of the details of that merger or the arrangements as to the liability of Irwin Mitchell following its acquisition of the TEL business. Confirmation was sought that Irwin Mitchell LLP was responsible for professional liability issues of the individuals and the trade of TEL following the merger. Paragraph 77 asked that the correct legal entity with responsibility for TEL’s professional liability be confirmed “so that the relevant applications can be made under CPR r 17.4(3) or CPR r 19.6 as appropriate.”[28]By letter dated 31 October 2024 Kennedys responded to the issues which it said that the Claimants faced in respect of limitation. The letter did not comment on the alleged breaches of duty or the scope of the retainer and duties asserted. Ms Bond replied on 4 November 2024 pointing out that it was represented in Irwin Mitchell’s audited accounts for the financial year 2014/2015 that Irwin Mitchell had taken over the trade and assets of TEL. It was also pointed out that Rhealisation LLP did not carry on a trade of providing legal services.[29]There followed an exchange of emails between Kennedys and Ms Bond on 4 and 5 November 2024. Kennedys asked Ms Bond if they were correct in understanding that their clients’ position was that they issued the claim against Irwin Mitchell on the basis they understood that Irwin Mitchell took on the trade and assets of TEL. Kennedys acknowledged that Rhealisation LLP was not currently trading.[30]In the first paragraph of an email sent on 6 November 2024 at 10.52 Ms Bond replied on this point:- “Our clients brought their claim against “Irwin Mitchell LLP (formerly “Thomas Eggar LLP”)” on the basis that Thomas Eggar LLP had merged with Irwin Mitchell LLP – that is Thomas Eggar had been incorporated into, or was now a part of, Irwin Mitchell LLP. We understand that Irwin Mitchell LLP took over the trade and assets of Thomas Eggar following the merger of the two firms (or the acquisition of Thomas Eggar by Irwin Mitchell as the case may be).”[31]Kennedys replied by email sent on 11 November 2024 saying they remained of the view that disclosure of documents demonstrating the business arrangements including any merger documentation was not relevant to the key issue whether Irwin Mitchell LLP was the correct Defendant to the claim. Kennedys said the relevant question was what entity the Claimants have a cause of action against putting aside whether the cause of action has merit or is time barred. Kennedys said the claim had been issued against the wrong party and would not succeed.[32]Particulars of Claim drafted by counsel dated 12 November 2024 were served on 13 November 2024. The background to the claim is set out in Section B (paragraphs 11 to 33). The retainer and duty of care is pleaded in Section C (paragraphs 34 to 59). The alleged breach of duty and/or negligence is set out in Section D (paragraphs 60 to 63).[33]In paragraph 60 it is pleaded that TEL were aware that Capt. Collingwood was inexperienced and not legally informed. It is pleaded that there was also a known and significant risk that Capt. Collingwood had lost his pension as a result of fraud, whether perpetrated by AJH, SJL, the individuals behind them or some other combination of those parties.[34]In Paragraph 61 it is pleaded that Capt. Collingwood was advised that, because of SJL’s insolvency, he needed to act quickly in respect of the liquidator. Paragraph 61 pleads that, however, in breach of their duty to Capt. Collingwood and/or negligently, TEL failed to exercise the care and skill expected of a reasonably competent solicitor pursuant to their duties under the Letter of Engagement. The Particulars of Negligence are pleaded in subparagraphs61.1 to 61.10 as follows:- “61.1 Failing to advise the Claimants that while there were other recovery options open to them, they would need to take steps to protect their position with respect to a civil claim even if Capt. Collingwood pursued those other avenues himself;61.2 Failing to advise the Claimants that, if they delayed for too long, their civil claims would expire and there would be no recovery against the Primary Wrongdoers.61.3 Informing Capt. Collingwood that there were no key dates he needed to be aware of where the relevant limitation periods constituted very significant dates which Capt. Collingwood would need to comply with.61.4 Failing to advise the Claimants that urgent action would be required to secure the sums paid away from his pension scheme in the hands of its ultimate recipients;61.5 Failing to engage with the urgency of the Claimants’ situation and communicate the need to progress a claim in fraud as soon as possible to maximise the chance of recovery.61.6 Failing to advise the Claimants that the investigations necessary would need to be undertaken as soon as possible if any of the sums, or proceeds of those sums, were remaining or could be traced;61.7 Failing to advise on the full range of causes of action, including against the relevant individuals, which included claims in conspiracy against the Primary Wrongdoers, and/or a claim against Capital as SJL’s Principal;61.8 Failing to advise Capt. Collingwood as to how to prioritise the various options presented to him by TEL which included involving the FCA, the FSCS, the Police, private investigators, the Courts and the Pension Ombudsman;61.9 Failing to advise Capt. Collingwood of the implications of a police investigation into a fraud both in terms of the prospects of recovery and the delay such a report might cause any civil claim.61.10 Leaving Capt. Collingwood to his own investigations without warning him that if he were to return to bring a claim it would have to be done before the limitation period expired.”[35]In Paragraph 62 it is pleaded that the Claimants “needed to be made aware that any claim in fraud would need to be brought swiftly and in any case, before the expiry of the relevant limitation period”. In Paragraph 63 it is pleaded that Capt. Collingwood needed advice to assist him in prioritising his actions and to understand the risks of taking the steps himself. It is alleged that this was advice that he did not receive from TEL.[36]In Paragraph 64 it is pleaded that without understanding the urgency of his situation, and without any warning as to the possibility of losing his opportunity to bring a civil claim, Capt Collingwood proceeded to follow up the options provided by TEL.[37]In Paragraphs 65 to 81 are pleaded the further investigations and options pursued by Capt. Collingwood. These included a complaint to the Pension Ombudsman who gave a decision on 27 November 2017. On 11 November 2019 Capt. Collingwood was notified that the police investigation had come to an end and a prosecution would not be pursued. Capt. Collingwood sought a review of that decision but the review was rejected on or around 22 September 2020. It is pleaded that in the course of the investigation Capt. Collingwood was informed that he should not bring a civil claim until after the police investigation had been completed.[38]It is further pleaded that in 2017 Capt. Collingwood made formal complaints to the FCA and the Financial Ombudsman Service. It is pleaded that by 23 August 2022 both the FCA and the FOS had concluded that they would not uphold the complaint.[39]In Paragraph 82 it is pleaded that Capt. Collingwood pursued these options to recover his pension, avoid unnecessary litigation and the risk of incurring considerable costs. It is pleaded that he was not informed by TEL that his claims would be subject to a statutory limitation period.[40]In paragraph 83 it is pleaded that in or around May 2022, after the expiry of the relevant limitation periods, Capt. Collingwood approached a firm of solicitors, Furley Page LLP, with a view to commencing civil proceedings in connection with the Fraud.[41]In Paragraph 88 it is pleaded that the relevant limitation period in tort expired, at the earliest, on 16 May 2018 (6 years from the date £130,000 was paid away on 16 May 2012). In Paragraph 89 it is pleaded that the commencement of the limitation period for the Claimants’ claims may have been postponed in virtue of Section 32 of the Limitation Act 1980 as a result of the delay in Capt. Collingwood discovering the Fraud. It is however averred that as of 2015, the Claimants were aware of the fraud in the relevant sense.[42]In Paragraph 90 it is pleaded that at the date on which the limitation period expired, the Claimants suffered damage as a result of TEL’s negligence. Under the heading Particulars of Loss and Damage, it is pleaded that the Claimants lost the opportunity of recovering damages from the Primary Wrongdoers and/or Capital Systematics Ltd, which they had a reasonable prospect of recovering. Particulars of the damages are then pleaded.[43]On 11 December 2024 the Defendant, Irwin Mitchell LLP, applied for summary judgment in respect of the entirety of the claim and/or to strike out the entirety of the claim. The application was supported by a witness statement of Paul Castellani, Partner at Kennedys, dated 5 December 2024 and by a witness statement of Daniel Bastide, a Partner at Irwin Mitchell LLP dated 10 December 2024.[44]On 8 April 2025, 8 days before the hearing listed for the Defendant’s application, the Claimants filed their application for an order adding or substituting Rhealisation LLP as a Defendant. The application was supported by the witness statement of Ms Bond dated 8 April 2025 which was also filed in response to the Defendant’s application.[45]The two applications were listed before me together. I heard Niamh O’Reilly, counsel for the Defendant, first in support of the Defendant’s application. I heard Sarah Parker, counsel for the Claimants in answer to the Defendant’s application and in support of the Claimants’ application. I then heard counsel for the Defendant in reply and in answer to the Claimants’ application. I then heard counsel for the Claimants in reply on the Claimants’ application.[46]The Defendant’s application to strike out the claim is made under CPR 3.4. The court may strike out a claim if it appears to the court that the statement of case discloses no reasonable grounds for bringing the claim: CPR 3.4 (2)(a). For the purposes of that application I must accept the facts pleaded in the Particulars of Claim unless they are contradictory or obviously wrong. Where a statement of case is found to be defective, the court should consider whether the defect might be cured by amendment and if it might be the court should not strike out without first giving the relevant party an opportunity to amend.[47]The application to strike out is combined with an application for summary judgment under CPR Part 24. CPR r 24.3 provides that:- “The court may give summary judgment against a claimant or a defendant on the whole of a claim or on an issue if- “(a)it considers that the party has no real prospect of succeeding on the claim, defence or issue; and (b)there is no other compelling reason why the case or issue should be disposed of at a trial.”[48]Principles applicable to summary judgment applications were formulated by Lewison J. in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15]. i) The court must consider whether the claimant has a “realistic” as opposed to “fanciful” prospect of success: Swain v Hillman [2001] 1 All ER 91; ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel [2003] EWCA Civ 472; iii) In reaching its conclusion the court must not conduct a “mini-trial”: Swain v Hillman; iv) However, this does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10]; v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550; vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63; vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent’s case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant’s case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725.[49]The Defendant’s application is made on two grounds. The first ground relied on is that the Claimants sued the wrong Defendant. The second ground relied on is that at the time when the claim was issued it was statute-barred. It is convenient to consider first the Defendant’s ground that the claim was statute-barred when it was issued. If that is correct, the court has no jurisdiction under CPR 19.6. to add or substitute a party. Rule 19.6(2) provides that the court may add or substitute a party only if- (a)the relevant limitation period was current when the proceedings were started.”[50]Section 2 of the Limitation Act 1980 provides that:- “An action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued.”[51]A cause of action in negligence accrues when the claimant sustains actionable damage. In Forster v Outred and Co [1982] 1 W.L.R. 86 at 94 Stephenson L.J. accepted counsel’s submission as to what was meant by actual damage:
“…it is any detriment, liability or loss capable of assessment in money terms and it includes liabilities which may arise on a contingency, particularly a contingency over which the plaintiff has no control; things like loss of earning capacity, loss of chance or bargain, loss of profit, losses incurred from onerous provisions or covenants in leases. They are all illustrations of a kind of loss which is meant by ‘actual’ damage. It was also suggested in argument …that ‘actual’ is really used in contrast to ‘presumed’ or ‘assumed’. Whereas damage is presumed in trespass and libel, it is not presumed in negligence and has to be proved. There has to be some actual damage.”
[52]On behalf of the Defendant Ms O’Reilly submitted that it is plain on the Claimants’ case as set out in the Particulars of Claim that the Claimants acted to their detriment on TEL’s advice in 2014 and in any event well before May 2018.[53]Ms O’Reilly pointed to paragraphs 61.4 to 61.6 of the Particulars of Claim where it is alleged that TEL failed to advise Capt. Collingwood that urgent action was required to secure the sums paid away from his pension scheme, and that TEL failed to engage with the urgency of the Claimants’ situation; and to paragraph 61.8 where it is alleged TEL failed to advise Capt. Collingwood how to prioritise the various options presented to him by TEL; and to paragraph 61.9 where it is alleged TEL failed to advise Capt. Collingwood of the implications of a police investigation into the Fraud both in terms of the prospects of recovery and the delay such a report might cause to any civil claim.[54]Ms O’Reilly submitted that it was helpful to look at observations made in cases where, as a result of the negligence of solicitors, cases had been allowed to become so stale that they were struck out for want of prosecution. She submitted that the observations in those cases were instructive and either directly applicable or applicable by analogy to the facts of this case.[55]In Khan v Falvey [2002] EWCA Civ 400 three actions brought by the Claimant had all been dismissed for want of prosecution. It was held on appeal that the value of each of the Claimant’s cases had been diminished, and hence the Claimant had suffered loss, years before the cases were dismissed. In that case the judge at first instance had held that he was bound by the decision in Hopkins v Mackenzie [1995] P.I.Q.R 43, CA to hold that the causes of action did not arise until the actions in each case were struck out for want of prosecution. In the Court of Appeal, Sir Murray Stuart-Smith held that Hopkins v Mackenzie could be distinguished on the facts. He said that in that case the only cause of action pleaded and the only damage and loss claimed to have resulted from the negligence was the loss of the chance of recovery in the previous action which was not finally lost until it was struck out.[56]Sir Murray Stuart-Smith went on to consider the submission that Hopkins v Mackenzie had been wrongly decided. Ms O’Reilly relied on paragraph 23 where Sir Murray Stuart-Smith said:- “A claimant cannot defeat the statute of limitations by claiming only in respect of damage which occurs within the limitation period, if he has suffered actual damage from the same wrongful acts outside that period.”(underlining added)[57]Ms O’Reilly relied on paragraph 33 where Sir Murray Stuart-Smith stated:- “In my judgment therefore and if and in so far asHopkins v Mackenzie purports to hold that there can be no damage in this type of case prior to the actual strike out, I cannot agree that it is correct or consistent with Nykredit. The mere fact that the claimant does not plead any damage prior to the strike out, does not necessarily mean that he has suffered no damage prior to that time. If it is clear that the value of his chose in action has been substantially diminished before the limitation date, the action will be statute-barred.”[58]Chadwick L.J. said at paragraph 51:- “It is, I think, implicit…that Nourse L.J. was accepting, on the facts in Hopkins v Mackenzie, that the plaintiff’s right to pursue the earlier action did have some value at the time when the action was struck out. To put the point another way, all that the plaintiff could recover in an action based solely on the loss of the right to pursue the earlier action – and not on any diminution in the value of the claim in the earlier action resulting from the defendant solicitor’s dilatory conduct – would be the value of the claim immediately before the earlier action was struck out. If the plaintiff’s right to pursue the earlier action had become valueless by the time that the action was struck out, the striking out of the action caused no loss; and ex hypothesi, there could be no cause of action in tort arising from the strike out.”[59]At paragraph 57 Chadwick L.J. said:- “If the decision of this Court in Hopkins v Mackenzie is understood, as I think it should be, as limited to those cases in which the only loss on which the claimant seeks to found his cause of action is the loss of his right to pursue the earlier action by reason of the strike out-measured by, and confined to, the residual value of the claim immediately before actual strike out-then it cannot, in my view, be held to be inconsistent with the later decision in the Nykredit case. But the circumstances in which a claim can be advanced on that limited basis are likely to be rare. As soon as the claimant seeks to found his cause of action on the diminution in the value of his claim arising from a period of delay, the decision in Hopkins v Mackenzie is of no assistance.”[60]In Hatton v Chafes (A Firm) [2003] EWCA Civ 341 Lord Justice Clarke set out five principles:- “i) a cause of action in negligence does not arise until the claimant suffers damage as a result of the defendant’s negligent act or omission; ii) The damage must be ‘real’ as distinct from minimal; iii) Actual damage is any detriment, liability or loss capable of assessment in money terms and includes liability which may arise on a contingency; iv) The loss must be relevant in the sense that it falls within the measure of damages applicable to the wrong in question; v) A claimant cannot defeat the statute of limitations by claiming only in respect of damage which occurs within the limitation period if he has suffered damage from the same wrongful act outside that period.”[61]In the present case, the Particulars of Negligence pleaded under paragraph 61 of the Particulars of Claim allege a number of alleged failures to advise as well as “informing Capt. Collingwood that there were no key dates that he needed to be aware of where the limitation periods constituted very significant dates which Capt. Collingwood would need to comply with”. The alleged failures to advise contain two distinct elements. These may be summarised as failing to advise in relation to the relevant limitation periods and failing to advise that recovery claims needed to be brought swiftly and the need to progress a claim in fraud as soon as possible to maximise the chance of recovery.[62]The Claimants’ pleaded case on causation is that, because of these failings, Capt. Collingwood pursued alternative options to litigation in order to try and recover his pension. In Paragraph 82 of the Particulars of Claim it is pleaded:- “Capt. Collingwood pursued these options to recover his pension, avoid unnecessary litigation and the risk of incurring considerable costs. He was not aware that his or Edge’s claims against the Primary Wrongdoers would expire. This was because he was not informed by TEL that his claims would be subject to a statutory limitation period.”[63]In Paragraph 90 it is pleaded that:- “At the date on which the limitation period expired, the Claimants suffered damage as a result of TEL’s negligence.”[64]The Defendant submits that by analogy with the negligent conduct of proceedings cases, the Claimants’ cause of action accrued in 2014 by reason of the reduction in the prospects of recovery of the pension investments. The Claimants submit this is not a diminution in value claim and that they are entitled to sue for the lost opportunity of recovering damages from the Primary Wrongdoers.[65]On behalf of the Claimants reliance is placed on the words of Lord Mance in Law Society v Sephton & Co [2006] 2 AC 543; [2006] UKHL 22; at para 69:- “a similar line of authorities establishes that the cause of action against a solicitor whose negligence deprives his client of a claim which the solicitor was engaged to pursue accrues when the claim becomes time barred or liable to be struck out for want of prosecution (thereby obviously eliminating or reducing the value of any claim” (underlining added)[66]In the present case, the Particulars of Negligence include alleged omissions to advise which are not limited to an alleged omission to advise in relation to the limitation period. I agree with the Defendant that this muddies the limitation water. It exposes the Claimants to the argument that they cannot defeat the statute of limitations by claiming only in respect of damage which occurs within the limitation period if they have suffered actual damage “from the same wrongful acts” outside of that period.[67]I have however reached the clear conclusion that it would not be right to strike out the claim or grant reverse summary judgment on the basis that the whole claim was clearly statute-barred at the time when it was issued. In Berney v Saul (T/A Thomas Saul & Co) [2013] EWCA Civ 640 Gloster LJ said at [70]:- “I agree with Sir Anthony Evans that cases of this sort are notoriously fact-sensitive. As I have already said, I see no reason in this case to attempt to reconcile what are arguably inconsistent approaches of this Court in Hopkins v MacKenzie on the one hand, and Khan v Falvey and Hatton v Chafes, on the other, let alone to attempt to comment [on] what, in any event, were the obiter statements about the appropriate criteria to adopt to a determination of the limitation issue…I prefer simply to answer the realistic and fact-dependent question formulated by Lord Hoffman in Nykredit: when was Ms Berney financially worse-off as a result of the Respondent’s breach of his duty of care than she would otherwise have been?”[68]In circumstances where the application of the authorities to the facts pleaded in the Particulars of Claim is very far from being straightforward, the better course in my view is to allow the claim to proceed to trial so that the limitation issues can be determined on the basis of actual findings of fact. On an application of this type it is not possible for the court to determine when and if any actual damage was suffered as a result of the Defendant’s alleged negligence. At one extreme, it may be established at trial that by the time the Defendant solicitors were consulted the claim had little or any value as the prospects of recovery were nil or low. At the other, it may be shown that the claim still had a significant residual value which was lost when the relevant limitation period expired. Likewise, in my view, after the evidence has been heard at trial, the court will be best placed to decide whether the alleged negligent failings on the part of the Defendant, if more than one is established, should be treated as a single breach or wrongful act or whether they should be treated as separate and distinct breaches. In my view, these evidential issues will feed into the resolution of the legal issues. Looked at, at this stage, I cannot say that it is clear as a matter of law that the whole of the claim was statute-barred at the time the claim was issued. There are in my view compelling reasons to allow this claim to go to trial on the issue of limitation.[69]For those reasons I do not consider that the claim should be struck out or reverse summary judgment granted to the Defendant on the basis that the claim was statute-barred at the time when it was issued. All that I am deciding on the limitation issue at this stage is that it should not be determined without a trial of the facts.[70]The second basis for the Defendant’s application is that the Claimants have sued the wrong Defendant. In support of this part of its application the Defendant relies on the evidence set out in the witness statement of Mr Daniel Bastide dated 10 December 2024. Mr Bastide was formerly a member of TEL. In paragraph 2.4 he states that Irwin Mitchell LLP acquired the business and trade of TEL by way of a Merger Deed dated 25 November 2015. He states that the parties to the Merger Deed were Irwin Mitchell LLP, TEL and the equity members of TEL, who he says were, essentially, selling their ongoing membership interests in TEL and guaranteeing the obligations of TEL.[71]In paragraph 2.2 Mr Bastide states that TEL changed its name on 15 January 2016 and is now known as Rhealisation LLP. It has company number OC326278 and is a separate corporate entity to Irwin Mitchell LLP, a firm of solicitors and corporate entity with company number OC343897.[72]Under the terms of the Merger Deed “Assumed Liabilities” were assumed by Irwin Mitchell LLP and “Excluded Liabilities” were not. “Assumed Liabilities” included “Client Claims”. “Client Claims” included claims which former clients of TEL might bring against TEL in the future arising from alleged negligence on the part of TEL.[73]In paragraph 3.8 Mr Bastide states that the bargain reached between the parties was, in summary- “3.8.1 If a client had already made a professional negligence claim against Thomas Eggar LLP which had been notified to its insurers, Thomas Eggar LLP would be responsible for the insurance excess and its insurers already notified would deal with the claim; 3.8.2 If however a client of Thomas Eggar LLP made a claim against it in the future …then as between Thomas Eggar LLP and Irwin Mitchell LLP that claim would be dealt with by Irwin Mitchell LLP, on behalf of Thomas Eggar LLP, and Irwin Mitchell LLP’s professional indemnity insurers (as Irwin Mitchell LLP is the successor practice for insurance purposes…) Irwin Mitchell LLP would pay the excess under its insurance policy in respect of such a claim.”[74]In paragraph 4.4, Mr Bastide said it was correct to say that for insurance purposes Irwin Mitchell LLP became the successor practice to TEL. He said:- “In practical terms that means that as at the date of completion, any claims made against Thomas Eggar LLP arising from work undertaken up to the date of completion (which had not already been notified to Thomas Eggar LLP’s own insurers) would be “picked up by” Irwin Mitchell LLP’s insurers and that Irwin Mitchell LLP would pay the excess. Thomas Eggar LLP did not purchase its own run-off insurance.”[75]The claim in the present case relates to the advice given or omitted to be given by TEL prior to the Merger Deed. No advice is pleaded in the Particulars of Claim as having been given after the Merger Deed. On this basis it is submitted on behalf of the Defendant that if the Claimants have a cause of action it is against TEL and not Irwin Mitchell LLP.[76]In my view that submission is correct. In the absence of agreement, Irwin Mitchell LLP has no liability to third parties for any contract made or wrongful act done by TEL prior to the Merger Deed. There is no evidence of an agreement to which the Claimants were a party. There is no evidence that the Claimants gave their consent to a future novation in the event that TEL merged with another firm.[77]The Claimants’ claim should therefore have been brought against TEL as the corporate body and firm of solicitors retained by the First Claimant and whose conduct is alleged to have been negligent.[78]On behalf of the Claimants it was submitted that the court could not safely conclude that the claim had been brought against the wrong Defendant without full disclosure of the terms of the Merger Deed. I do not accept that submission. I agree with the submission made on behalf of the Defendant that in order for Irwin Mitchell LLP to have become directly liable to the Claimants in respect of the alleged professional negligence there would need to have been some form of novation or other contractual agreement to which the Claimants were a party.[79]In paragraph 84 of the witness statement of Ms Bond dated 8 April 2025 it was suggested that a right to sue Irwin Mitchell LLP might arise under the Contracts (Rights of Third Parties) Act 1999. By email dated 10 April 2025 the Defendant’s solicitors responded pointing out that this was the first time it had been raised that there might be some grounds for a claim under the Contracts (Rights of Third Parties) Act 1999. An extract from clause 27 of the Merger Deed was provided which states:- “27.6 A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms.” This was a new claim not contained in the Particulars of Claim and made for the first time a week before the hearing. In the circumstances I do not think it reasonable for the Claimants to complain about the late or piecemeal disclosure of the clause.[80]In my view, the Claimants have no realistic prospect of establishing that they have a direct claim against Irwin Mitchell LLP. It follows that permission is needed to substitute Rhealisation LLP as Defendant in place of Irwin Mitchell LLP.[81]It is in this context that I turn to the Claimants’ amendment application.[82]On behalf of the Claimants it was argued that the application did not fall within CPR r 19.6 on the grounds that section 32 of the Limitation Act 1980 would have the effect that the limitation period for bringing the claim against the Primary Wrongdoers did not begin to run until the Claimants discovered the fraud or could with reasonable diligence have discovered it. It was said by Ms Bond in her witness statement that the primary limitation period would have been postponed until between 26 July 2019 and 17 July 2020 pursuant to section 32 of the Limitation Act 1980.[83]In my view I must proceed on the basis that it is reasonably arguable that the limitation period in respect of a claim against Thomas Eggar LLP has expired. In addition to the limitation issues already addressed, it is pleaded on the face of the Claimants’ pleaded case that:- “88. The relevant limitation period in tort is 6 years from the date of the damage suffered (section 2 of the Limitation Act 1980). Captain Collingwood paid away the sums from his pension to SJL on 16 May 2012. His claim therefore expired, at the earliest, on 16 May 2018. 89. The commencement of the limitation period for the Claimants’ claims may have been postponed in virtue of section 32 of the Limitation Act 1980 as a result of the delay in Captain Collingwood discovering the fraud…”[84]Where it is reasonably arguable that the limitation period has expired, an application to add or substitute a new party should be refused, leaving the applicant to issue fresh proceedings, so as not to deprive the new party of a potential limitation defence under section 35 of the Limitation Act 1980, unless the application falls within sections 35(4), (5) and (6) of the Limitation Act 1980 and CPR r 19.6. This is to avoid a Defendant being deprived of a limitation defence through relation back pursuant to section 35(1)(b) of the Limitation Act 1980.[85]Section 35(4) of the Limitation Act 1980 provides that:- “Rules of court may provide for allowing a new claim to which subsection (3) above applies to be made as there mentioned, but only if the conditions specified in subsection (5) below are satisfied, and subject to any further restrictions the rules may impose.” The relevant condition in section 35(5) of the Limitation Act 1980 is:- “(b) in the case of a claim involving a new party, if the addition or substitution of the new party is necessary for the determination of the original action.” Section 35(6) then provides:- “The addition or substitution of a new party shall not be regarded for the purposes of subsection (5)(b) above as necessary unless either-(a) the new party is substituted for a party whose name was given in any claim made in the original action in mistake for the new party’s name; or(b) any claim already made in the original action cannot be maintained by or against an existing party unless the new party is joined or substituted as plaintiff or defendant in that action.” The relevant condition in section 35(5) of the Limitation Act 1980 is:-

Section 35(6) then provides:-

[86]CPR r 19.6 provides in relevant part:- “(2) The court may add or substitute a party only if-(a) the relevant limitation period was current when the proceedings were started; and(b) the addition or substitution is necessary. (3) The addition or substitution is necessary only if the court is satisfied that- (a) the new party is to be substituted for a party who was named in the claim form in mistake for the new party; (b) the claim cannot properly be carried on by or against the original party unless the new party is added or substituted as claimant or defendant; or(c) [not applicable].”[87]It is for the Claimants to satisfy the court that the addition or substitution is “necessary” as falling either under r 19.6(3)(a) or (b). Rule 19.6(3)(a) requires the court to apply The Sardinia Sulcis test for mistake as reviewed by the Court of Appeal in Adelson v Associated Newspapers Ltd [2007] EWCA Civ 701; [2008] 1 W.L.R 585. The principles were further considered in detail by Leggatt J, as he then was, in Insight Group Ltd v Kingston Smith (a firm) [2012] EWHC 3644 where an application was made to substitute a former partnership as Defendant in place of a LLP. In order for Rule 19.6(3)(a) to apply, three requirements must be met;- (i)the person who has made the mistake must be the person responsible, directly or through an agent, for the issue of the claim form (ii) it must be shown that, had the mistake not been made, the new party would have been named; and (iii) the mistake must be as to the name of the party, applying The Sardinia Sulcis test, rather than one of description.[88]In this case (i) and (ii) are satisfied. To determine whether (iii) is satisfied the court must consider the whole of the evidence which may serve to explain why Irwin Mitchell (in the Claim Form) and Irwin Mitchell LLP (in the Particulars of Claim) was sued and not TEL. The best evidence from which to infer what was intended may be documents and correspondence produced before the mistake was recognised.[89]In the present case, there was no pre-action correspondence. In the Claim Form the First Defendant was named as “Irwin Mitchell (formerly “Thomas Eggar LLP”)”. In paragraph 2 of the “Brief details of claim” it is stated that “The Claimants sought legal advice from Thomas Eggar LLP, now Irwin Mitchell LLP, in connection with the Fraud and the claims available to them”.[90]From this it appears that the Claimants’ legal advisors wrongly believed that Irwin Mitchell and TEL were one and the same legal entity. This is consistent with the explanation given by Ms Bond in her email sent on 6 November 2024 to Ms Bingham of Kennedys:- “Our clients brought their claim against “Irwin Mitchell LLP (formerly “Thomas Eggar LLP”)” on the basis that Thomas Eggar LLP had merged with Irwin Mitchell LLP – that is Thomas Eggar had been incorporated into, or was now part of, Irwin Mitchell LLP. We understand that Irwin Mitchell LLP took over the trade and assets of Thomas Eggar following the merger of the two firms (or the acquisition of Thomas Eggar by Irwin Mitchell as the case may be).”[91]In my view it is clear that the intention of the Claimants was always to sue TEL. This is apparent from the references to Irwin Mitchell “formerly being Thomas Eggar LLP” and to Thomas Eggar LLP, “now Irwin Mitchell LLP”, in the claim form. On analysis, the nature of the mistake at the time the claim was issued, was in my view one of name rather than simply an error of law. The mistake was to think that by formulating the claim against Irwin Mitchell the Claimants were suing TEL. The subsequent attempt to support the suing of Irwin Mitchell LLP by seeking to argue that Irwin Mitchell LLP may be liable to the Claimants under the terms of the Merger Deed was, as it was put by Leggatt J in Insight Group Ltd v Kingston Smith at [58], an attempt to rationalise what was done in hindsight. The courts have adopted a generous interpretation of what can be treated as a mistake of name. The mistake in my view satisfies the Sardinia Sulcis test.[92]On behalf of the Claimants, Ms Parker preferred to argue that the court had power to order addition or substitution under section 35(6)(b) and CPR r 19.6(3)(b). She submitted that the claim could not be “maintained” or “properly carried on” by the Claimants unless Rhealisation LLP was substituted as defendant.[93]The court has power to order addition or substitution under section 35(6)(b) and CPR r 19.6(3)(b) if (i) a claim made in the original action is not sustainable by or against the existing party; and (2) it is the same claim which will be carried on by or against the new party: Insight Group Ltd v Kingston Smith at [96].[94]In relation to the first requirement, it is however the Claimants’ pleaded case in paragraph 4 of the Particulars of Claim that the Defendant, Irwin Mitchell “took on responsibility for the liability of TEL to its clients and former clients at or around the time of the Merger as the successor practice of TEL”. On behalf of the Defendant it is submitted that either the claim against Irwin Mitchell is a bad one and the Defendant’s application for summary judgment must succeed, or the claim against Irwin Mitchell is not a bad one and accordingly addition or substitution is not necessary for the claim to be carried on against Irwin Mitchell and the Claimants’ application for substitution must fail.[95]I have already concluded that the claim against Irwin Mitchell has no realistic prospect of success. In those circumstances, I think it is open to the court to strike out paragraphs 4 and 5 of the Particulars of Claim thereby removing from the Particulars of Claim any claim that Irwin Mitchell LLP was liable in law to the Claimants.[96]Once Paragraphs 4 and 5 are struck out, the Court would in my view have jurisdiction to substitute TEL as Defendant to the claim either under CPR r 19.6(3)(a) or (b). In neither case is there in my view any basis for retaining or necessity to retain Irwin Mitchell LLP as a Defendant.[97]I therefore reach the conclusion that the court has a discretion whether to order substitution. The discretion must be exercised in accordance with the overriding objective of enabling the court to deal with a case justly and at proportionate cost.[98]On behalf of the Defendant, reliance is understandably placed on the level of delay. The claim form was issued a matter of days before the limitation period ran out (leaving aside the question of any postponement under section 32 of the Limitation Act 1980). The Claimants failed to enter into any correspondence with the Defendant before the claim was issued. The first notification that a claim had been issued was on 3 September 2024 no more than 10 days before the four-month period after the issue of the claim form ran out. There was also a significant delay between the issuing of the Defendant’s application to strike out the claim and the Claimants’ issuing their application for addition or substitution of a party. This was left until around the last date for filing evidence in answer to the summary judgment application. The only explanation for any of these delays is contained in paragraph 28 of Ms Bond’s witness statement where it is said that since the summary judgment application the Claimants have had to raise further funds.[99]In those respects, the facts of the present case are similar to those in American Leisure Group Ltd v Olswang LLP [2015] EWHC 629(Ch) in which Master Bragge’s decision not to exercise his discretion in favour of allowing substitution was upheld on appeal by H.H. Judge Walden-Smith (sitting as a Judge of the High Court).[100]In that case particular weight was given to the fact that neither the named Defendant nor the Defendant proposed to be substituted had any idea of the potential claim. There was however a different commercial context. In that case the position was that without a limitation defence, the partners of Olswang, the party sought to be made a Defendant in place of Olswang LLP, had individual personal exposure to what was described as an “enormous” damages claim.[101]In the present case, as explained in Mr Bastide’s witness statement, the claim falls under the terms of the Merger Deed to be dealt with by Irwin Mitchell LLP, on behalf of TEL, and by Irwin Mitchell LLP’s professional indemnity insurers. Irwin Mitchell LLP would pay the excess under its insurance policy in respect of such a claim.[102]In circumstances where in commercial reality the change of Defendant will make no difference to the defence of the claim, and it was clearly the intention of the Claimants to sue TEL, I have reached the conclusion that the justice of the case comes down in favour of permitting the substitution. In my view on balance the prejudice to the Claimants in refusing to permit the substitution as a result of a mistake on the part of their legal representatives outweighs the prejudice to TEL.[103]I should make it very clear however that no further delay in the prosecution of this claim is likely to be tolerated by the court even if there continue to be funding difficulties on the side of the Claimants.[104]For the reasons set out above, I conclude that:-(1) It would be wrong to strike out or to grant reverse summary judgment on the whole of the claim in favour of the Defendant on the grounds that the claim was statute-barred at the time the claim was issued;(2) The claim was issued against the wrong Defendant;(3) The court has jurisdiction to substitute Rhealisation LLP as Defendant in place of Irwin Mitchell or Irwin Mitchell LLP(4) The court should exercise its discretion to permit such a substitution.(5) The Claimants have no real prospect of claiming that Irwin Mitchell LLP is directly liable to them in law for the alleged professional negligence of TEL and accordingly paragraphs 4 and 5 of the Particulars of Claim should be struck out.[105]I would be grateful to receive editorial corrections from counsel by 4pm on Friday 20 June 2025. This judgment will be handed down remotely without any attendances required at 10am on Tuesday 24 June 2025. A hearing to deal with consequential matters is listed at 9.30am in person on Friday 27 June 2025. Any application for permission to appeal may be made at the hearing on 27 June 2025.

Cited in 2 later judgments