Amtrust Europe Limited v MD Insurance Services Limited & Anor [2025] EWHC 1468 (Comm)

[2025] EWHC 1468 (Comm)Case No CL-2023-000226
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
KING'S BENCH DIVISION
COMMERCIAL COURT
Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 13 June 2025
Before
CHARLES HOLLANDER KCSITTING AS A DEPUTY JUDGE OF THE HIGH COURT
Between
AMTRUST EUROPE LIMITEDClaimantMD WARRANTY SUPPORT SERVICES LIMITED Proposed Third Defendants
Jessica Stephens KC and Helen Dennis (instructed by Reynolds Porter Chamberlain) for ClaimantWilliam Flenley KC and Niamh O’Reilly (instructed by Beale & Co) for First DefendantBen Patten KC and Diarmuid Laffan (instructed by Mills & Reeve) for Second and Proposed Third DefendantHearing Hearing dates: 4-5 June 2025
JUDGMENT

CHARLES HOLLANDER KC:

[1]The applications before me are as follows: i) An application by the Claimant to amend its Particulars of Claim ii) An application by the Claimant to add the Proposed Third Defendant to the Claim iii) An application by the Second Defendant for summary judgment or to strike out the Claimant’s claim. The Binder[2]These proceedings concern the Claimant insurer AmTrust’s claims for inadequate underwriting and claims handling in respect of property insurance schemes. The First Defendant MDIS was appointed by AmTrust (who was acting as underwriter) to act as coverholder on its behalf to manage the underwriting process and claims handling in respect of various latent defect insurance policies including the Premier Guarantee and LABC Warranty schemes (“the Policies”).[3]MDIS established and administered the schemes pursuant to which the Policies were issued. Each scheme comprised a suite of documents including policy wordings, Rules of Registration, various types of certificate and cover notes as well as Underwriting Guidelines, Technical Manuals, Policies and Operating Procedures (“the Scheme Documents”). The Scheme Documents were produced and periodically updated by MDIS.[4]MDIS had the right to market the scheme products and was defined as the Scheme Administrator within the Scheme Documents.[5]MDIS approached AmTrust to fulfil the role of Underwriter of the products as defined in the Scheme Documents. AmTrust did so by way of a Binding Authority Agreement (the “Binder”) pursuant to which MDIS was authorised to bind the insurance products on its behalf in accordance with the terms of the Binder.[6]The scheme was aimed at developers of new properties. MDIS engaged its in-house surveying subsidiary companies MDWIS (the Second Defendant) and MDWSS (the proposed Third Defendant) to survey properties for which the developer sought a Policy. MDWIS and MDWSS were subsidiaries of MDIS and shared some common directors with MDIS.[7]Only properties certified as ‘standard risk’ or ‘normal risk’ could be the subject of a Policy. The insurance enabled developers to sell their developments with the benefit of defects liability insurance. Such a Policy was often a requirement of any sale or mortgage of a newly constructed property.[8]Once a Policy was issued in respect of a property, pursuant to the terms of the Policies(1) the developer of a new property development was to be liable for any defects within the initial years following completion (referred to as the Defects Insurance Period and(2) thereafter, AmTrust was to be on cover in respect of the further Structural Insurance Period for the remaining policy years.[9]The Binder was entered into on 17 December 2010 between MDIS as the Coverholder, and AmTrust as Underwriter. The terms of the Binder governed MDIS’ role as coverholder in respect of the insurance schemes in respect of both underwriting and claims handling.[10]The Binder was effective from 1 February 2011 until 29 February 2020. The Proceedings[11]The Claim Form was issued against MDIS on 27 April 2023. It was amended prior to being served to add MDWIS as Second Defendant on 17 August 2023. The Amended Claim Form was served shortly thereafter on 25 August 2023. The Particulars of Claim and Confidential Appendices were served on 11 October 2023.[12]AmTrust claims against MDIS for negligence and breach of a duty of care in contract and tort. It claims against MDWIS for breach of a duty of care and seeks to add MDWSS to make similar claims.[13]The proceedings were stayed to allow the parties to carry out the pre-action process, in the course of which MDIS and MDWIS raised concerns about AmTrust’s pleaded case. AmTrust has now applied to amend its Particulars of Claim. This raises potential limitation issues. Duty of care[14]The logical starting point is to consider the application for summary judgment and strike out by MDWIS. If MDWIS are correct that no relevant duty of care exists, that informs the other applications.[15]The test for summary judgment is well known and set out by Lewison J in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15] and approved by the Court of Appeal in AC Ward & Sons Ltd v Catlin (Five) Ltd [2009] EWCA Civ 1098 Rep. I.R. 301 at [24]. Duty of care: the factual position[16]The binding authority granted by AmTrust to MDIS is expressed in general terms. It refers to MDIS as the Coverholder and provides by Section 4 that the Underwriters authorise the Coverholder to:4.1.1 bind insurances and amendments thereto for the Underwriters’ account4.1.2 act as the Underwriters’ agent in accordance with Section 33 for the purpose of receiving premiums from insured and settling refunds and to receive claims money prior to onward transmission to insureds Section 4 then sets out the duties of the Coverholder.[17]There is no other contractual document before the court which binds AmTrust directly. As a result, there is a measure of uncertainty at this stage as to what may be regarded as the contractual chain. What happened was that MDIS presented documentation to developers and instructed MDWIS/MDWSS to carry out surveys on properties where the developer desired to take advantage of the defects liability insurance which MDIS was offering through AmTrust. Although reference has been made to the Scheme Documents, these were not documents which bound AmTrust (other than the binder and policy wordings) but those which came into existence to enable MDIS to effect defects liability insurance for developers under the binder.[18]MDIS refer to UK Insurance Ltd v Carillion Specialist Services Ltd [2019] PNLR 30 where Alexander Nissen KC said about this kind of insurance at [6]:
“Unsurprisingly, the [insurer] would not wish to have issued such policies unless it had first been satisfied that the works in respect of which cover was issued were, during the course of their execution, regularly inspected and monitored by an independent surveyor so that, upon their completion, a surveyor acting with reasonable skill and care would be able to say that, as far as (s)he was concerned, the works had apparently been undertaken competently. In reliance on such confirmation, provided by means of a Certificate of Approval, a policy would then be issued to the insured on the standard terms… the [insurer] was relying on an expectation that reasonable skill and care had been exercised. The effect of this was, ordinarily, that the [insurer] anticipated that it may have to indemnify an insured in respect of a latent defect which had not been identified during the construction period by a surveyor using reasonable skill and care.”
[19]Central to the Scheme Documents was the Rules of Registration. This is an agreement between MDIS, described as the Scheme Administrator, and the developer. Thus, for example, Premier Guarantee New Homes version 4 Rules Clause 2.6.1 set out the conditions which needed to be fulfilled by the developer in order to obtain insurance through MDIS and underwritten by AmTrust. The key provision for present purpose was Clause 3: “3.0 THE TECHNICAL AUDIT3.1 THE ROLE OF THE SITE AUDIT SURVEYOR The Site Audit Surveyor is employed by the Underwriter to assess the quality of each Housing Unit in order to determine whether it represents a standard risk to the Underwriter. To achieve this they will check whether each Housing Unit has been constructed in accordance with the then current technical requirements contained in the Technical Manual issued to each Developer by the Scheme Administrator. The checks will not be exhaustive and the Site Audit Surveyor will be carrying out random checks on each Housing Unit. For the avoidance of doubt the Site Audit Surveyor will have no liability to any party other than the Underwriter in the event of defects being discovered during the Defects Insurance Period or Structural Insurance Period and it is the responsibility of the Developer to ensure that each Housing Unit is constructed using good industry practice and materials. The Site Audit Surveyor will also be continuously monitoring the standard of construction for each New Development.3.2 CHECKS CARRIED OUT BY THE SITE AUDIT SURVEYOR Where appropriate the Site Audit Surveyor will carry out the following checks on each Housing Unit: i) a plan check; ii) a check of calculations; iii) a review of the historical records for the site; iv) a check on the site investigation procedures and reports; v) a review of any remediation measures and subsequent verification procedures; vi) visits to site to check standards of construction; vii) checks on materials or components used in the construction; viii) checks that relevant guarantees and warranties required from third parties are received; ix) checks on the standard of construction. These reviews and checks should not be relied upon by the Developer to confirm that the construction and design and materials of the Housing Unit complies with Building Regulations and all relevant legislation applicable at the time each New Development is started. The Developer accepts that it has not, and will not place any reliance on such checks and reviews to satisfy himself that this is the case.3.3 CERTIFICATES OF APPROVAL If in the opinion of the Site Audit Surveyor a Housing Unit represents a standard risk to the Underwriter and complies with the technical requirements of the Technical Manual they will issue a Certificate of Approval to the Scheme Administrator. Receipt of a Certificate of Approval will allow the Scheme Administrator to issue the Certificate of Insurance for the Housing Unit. If in the opinion of the Site Audit Surveyor a Housing Unit does not represent a standard risk to the Underwriter and therefore in some regard does not comply with the functional requirements of the Technical Manual the Site Audit Surveyor will not issue a Certificate of Approval to the Scheme Administrator. “[20]Thus the Certificate of Approval by the surveyor (MDWIS/MDWSS) was a condition precedent before the insurance could be obtained.[21]Importantly, it is accepted by MDWIS/MDWSS that they and their surveyors were at all times well aware of the Rules of Registration.[22]A witness statement of Richard Bradshaw, who worked for MDIS and subsequently for MDWSS, exhibits various versions of Operating Procedures setting out how the system was to work. An example is Op 28 Issue 13, which Mr Bradshaw says was in force from 2010 and he says was an MDWIS document. It bears the name of Rob Burridge. It provides:
“This Procedure explains how LABC NHW Surveyors provides a dedicated risk management inspection service to the Insurer and the Scheme Administrator Underwriters. The objective of the company, achieved through Site Audit Surveyors employed exclusively for the LABC scheme, is to ensure that as far as possible when a housing unit is completed it has been built in accordance with the MDIS Technical Manual and represents a standard risk to the underwriter”
[23]AmTrust’s case is that MDWIS/MDWSS owed duties of care to them. This case was supported by MDIS (although this appeared surprising, apparently insurers are different). They submitted as follows. AmTrust was the insurer, having delegated its underwriting functions to MDIS under the Binder. This was known to MDWIS/MDWSS. MDWIS/MDWSS thus knew that if it carried out surveying work without reasonable care and skill, AmTrust might suffer loss, thus foreseeability must be treated as established. Each of the Properties referred to by AmTrust was surveyed by MDWIS/MDWSS. In relation to each property, a surveyor from MDWIS/MDWSS must have confirmed that the property met the standard required by AmTrust, which involved giving a Certificate of Approval. It is to be assumed that each surveyor was negligent in relation to that property. Each of the insurance policies in respect of which claims have been made would not have been issued if the surveyor had not been negligent. The assumption therefore is that AmTrust can prove negligence, causation, quantum, foreseeability and reliance. Thus, it is argued, MDWIS/MDWSS must owe a duty of care to AmTrust. Duty of care: the law[24]In NRAM (Ltd) v Steel [2018] 1 WLR 1190 (see [18]-[25] and [32]) the question was whether a borrower’s solicitor owed a duty of care to the borrower’s lender. Lord Wilson said the test focused on whether there had been a voluntary assumption of responsibility based on a negligent misstatement; the key questions are(i) whether the representee reasonably relied on the representation, and(ii) whether the representor reasonably foresaw that the representee would rely on the representation.[25]Playboy Club London Ltd v Banca Nazionale del Lavoro SpA [2018] 1 WLR 4014 was a claim by a casino against a bank which had provided a reference for one of its customers. The bank did not know what the purpose of the reference was, or to whom it would be given. Lord Sumption said at [6] that the ratio of Hedley Byrne was that “the reasonable reliance of Hedley Byrne on the reference, combined with Heller & Partners’ appreciation of the fact that they would reasonably rely on it, gave rise to a direct relationship between them involving a duty of care.”[26]Lord Sumption quoted from the speech of Lord Devlin in Hedley Byrne. Lord Devlin said that there were two kinds of relationship which might give rise to a duty of care due to a relationship equivalent to contract. The first was a specific kind of relationship, such as solicitor and client or banker and customer. Lord Devlin’s second kind of relationship was “a particular relationship created ad hoc”. He said that, in relation to this second kind of relationship, “it will be necessary to examine the particular facts to see whether there is an express or implied undertaking of responsibility.”[27]Lord Sumption went on to state in Playboy Club at [10] that:
“The defendant’s knowledge of the transaction in respect of which the statement is made is potentially relevant for three purposes: (i) to identify some specific person or group of persons to whom he can be said to assume responsibility; (ii) to demonstrate that the claimant’s reliance on the statement will be financially significant; and (iii) to limit the degree of responsibility which the defendant is taken to assume if no financial limit is expressly mentioned.”
[28]JP SPC 4 v Royal Bank of Scotland International Ltd [2023] AC 461 was about whether a bank had a duty of care to refrain from executing a customer’s order. Lords Hamblen and Burrows said at [64] that the factors of particular importance in determining whether there had been an assumption of responsibility were:
“(i) the purpose of the task or service and whether it is for the benefit of the claimant; (ii) the defendant’s knowledge and whether it is or ought to be known that the claimant will be relying on the defendant’s performance of the task or service with reasonable care; and (iii) the reasonableness of the claimant’s reliance on the performance of the task or service by the defendant with reasonable care.”
MDWIS/MDWSS submissions: duty of care

MDWIS/MDWSS submissions: duty of care

[29]In their submissions in support of their summary judgment application, MDWIS/MDWSS submitted that a key element in this case which made it different from other cases was that although the Rules of Registration envisaged that the surveyor would be a third party, what in fact happened was that MDIS presented the opportunity to AmTrust as a “one stop shop” whereby the surveyors would be employed by a subsidiary of MDIS. All parties knew therefore that the scheme as set out in the Rules of Registration was not being followed and would not be followed. MDWIS/MDWSS relied on a document “Latent Defects Insurance-An Opportunity” which sets out and explains the offering MDIS presented to insurers.[30]The importance of this, they submitted, was that in fact MDWIS/MDWSS had no contact with AmTrust. The Certificate of Approval was never presented to AmTrust, it went to MDIS (and in fact there was no certificate, there was a book entry). The effect of the one-stop shop was that all the arrangements and certification took place between MDIS and MDWIS/MDWSS and AmTrust never had anything to do with MDWIS/MDWSS. Thus there was no duty of care as there was no voluntary assumption of responsibility by MDWIS/MDWSS to AmTrust.[31]MDWIS relied on Williams v Natural Life [1998] 1 W.L.R. 830. There the question before the House of Lords was whether the director of the company with whom the claimant had contracted was liable for its negligent advice. Lord Steyn noted at 835F:
“The touchstone of liability is not the state of mind of the defendant. An objective test means that the primary focus must be on things said or done by the defendant or on his behalf in his dealings with the claimant. Obviously, the impact of what the defendant says or does must be judged in the light of the relevant contextual scene. Subject to this qualification, the primary focus must be on exchanges … which cross the line between the defendant and the [claimant].”
[32]MDWIS’ submission was that, because of the way the relationship worked in practice, there was nothing in the present case which crossed the line between MDWIS/MDWSS and AmTrust. Whilst the position might have been different had the scheme set out in the Rules of Registration been followed, that was never done and it was never intended to be done because of the “one-stop shop.” The caselaw, most of which is based either on Hedley Byrne or Henderson v Merrett [1995] 2 AC 145, has never found a duty of care in a case such as the present. Duty of care: discussion[33]Ultimately, for the purposes of summary judgment, the duty of care question is in my view straightforward.[34]Firstly, the premise of MDWIS/MDWSS’ submission is that, the facts as actually took place were materially different from the position as envisaged by the Rules of Registration. But the pleaded case put forward by AmTrust is based on the procedure set out in the Rules of Registration. The documentation available is scant. So there is an obvious advantage in the court determining this matter after hearing from witnesses. It would be inappropriate to make findings as to the precise operation of the scheme on a summary judgment application where the facts are likely to be at least to an extent disputed.[35]Secondly, this is not just a dispute between AmTrust and MDWIS/MDWSS. AmTrust are supported by MDIS who are likely to have relevant evidence to give in support of AmTrust’s position at trial. So that is another reason to leave this to be dealt with at trial.[36]Thirdly, it is accepted by MDWIS/MDWSS that they and their surveyors were at all times aware of the Rules of Registration documentation. So it was known to them that if they negligently surveyed a property and gave a Certificate of Approval, that would be the trigger for the policy to be issued and loss could or would be suffered by AmTrust.[37]Fourthly, The Rules of Registration state that the surveyor is employed by the Underwriter. Equally, Op 28 states that the surveyor provides the service for the insurer. These documents show that the scheme recognised (at its lowest) a close relationship between surveyor and insurer.[38]Further, Counsel for MDIS submitted that it was at least arguable that the effect of the binding authority given to MDIS is that MDIS was, in issuing the insurance policies to developers, the agent of AmTrust. They refer to the encyclopaedia Professional Negligence and Liability at 11.21, which refers to a binding authority as being “a very common form of underwriting agency. A binding authority is often granted to a broker or sub-broker to enable that broker or sub-broker to underwrite a well-defined limited class of business which that broker has specialist expertise in or has an existing book of business to offer to the insurer.” footnote 1 states: “The person to whom a binding authority is granted is often known as a coverholder, but the nature of the arrangement is essentially that of an underwriting agent”

footnote 1 states:

[39]It seems to me arguable that MDIS acts as underwriting agent for AmTrust. If this is correct, then there can be no doubt that a duty of care would exist between AmTrust and MDWIS/MDWSS. I should say that I reject the submission made by counsel for MDWIS/MDWSS that the pleadings are not widely enough drawn to cover this argument.[40]Counsel for MDWIS/MDWSS submitted that, according to Williams, what MDWIS/MDWSS did had to “cross the line” and did not do so here: all their dealings were with MDIS. The key Certificate of Approval was never shown to AmTrust, and AmTrust had no dealings with MDWIS/MDWSS.[41]There is no need to seek here to debate the different formulations between Williams and later cases. Certainly, Williams is referred to in more recent Supreme Court case law without disapproval. The principal point in the citation from Williams is to distinguish the subjective intentions of the parties (irrelevant) from the objective position, making clear that what is relevant is the objective. Here on any view the objective position demonstrated the closeness of the relationship between surveyor and insurer. MDWIS/MDWSS survey properties knowing that if they do so negligently, and negligently issue a Certificate of Approval, AmTrust will rely on it in issuing Policies and are likely to suffer loss.[42]In my view the case in favour of a duty of care looks, on present material, strong. But all I need to do for present purposes is reject the application for summary judgment, which I do. Similarly, I reject the strike out application which, in this respect, adds nothing Permission to amend after the possible end of a limitation period: principles[43]Amtrust seek to amend the Particulars of Claim in circumstances where the Defendants say limitation has expired.[44]The test applicable to considering an application under CPR 17.4 is summarised in Geo-Minerals GT Ltd v Downing [2023] EWCA Civ 648 at [25]:(1) Is it reasonably arguable that the opposed amendments are outside the applicable limitation period?(2) Do the proposed amendments seek to add or substitute a new cause of action?(3) Does the new cause of action arise out of the same or substantially the same facts as are already an issue in the existing claim?(4) Should the court exercise its discretion to allow the amendment?[45]A new claim is not made by amendment until the pleading is amended. It follows that the relevant date for the purpose of calculating the limitation period is the date at which the amendment is actually made, which by definition must be no earlier than the date at which leave to make the amendment is granted (Welsh Development Agency v Redpath Dorman Long Ltd [1994] 1 WLR 1409 at 1421B-D).[46]The burden of persuasion is on the claimant to show that the defendant does not have a reasonably arguable limitation defence: Ballinger & another v Mercer Ltd & another [2014] EWCA Civ 996at [27].[47]The applicable principles were set out by Deputy Judge Stephen Morris QC in Diamandis v Wills [2015] EWHC 312 (Ch) and approved by Males LJ in Geo-Minerals: “’(1) The 'cause of action' is that combination of facts which gives rise to a legal right; (it is the 'factual situation' rather than a form of action used as a convenient description of a particular category of factual situation … (2) Where a claim is based on a breach of duty, whether arising in contract or tort, the question whether an amendment pleads a new cause of action requires comparison of the unamended and amended pleading to determine(a) whether a different duty is pleaded(b) whether the breaches pleaded differ substantially and(c) where appropriate the nature and extent of the damage of which complaint is made … (Where it is the same duty and same breach, new or different loss will not be a new cause of action. But where it is a different duty or a different breach, then it is likely to be a new cause of action). (3) The cause of action is every fact which is material to be proved to entitle the claimant to succeed. Only those facts which are material to be proved are to be taken into account; the pleading of unnecessary allegations or the addition of further instances does not amount to a distinct cause of action. At this stage, the selection of the material facts to define the cause of action must be made at the highest level of abstraction. … (4) In identifying a new cause of action the bare minimum of essential facts abstracted from the original pleading is to be compared with the minimum as it would be constituted under the amended pleading … (5) The addition or substitution of a new loss is by no means necessarily the addition of a new cause of action … Nor is the addition of a new remedy, particularly where the amendment does not add to the 'factual situation' already pleaded …"[48]. As to what constitutes “the same or substantially the same” set of facts, a summary of the principles was set out in Niprose Investments Ltd v Vincents Solicitors Ltd [2025] EWHC 14 (Ch), at [31]:
“(1) Whether a new claim arises out of the same, or substantially the same, facts as an existing claim is not a matter of discretion or case management but is a substantive question of law, which depends on analysis and evaluation to arrive at the correct answer. (2) It is of critical importance to carry out a careful, comparative evaluation of the scope and nature of the facts in issue in the existing claim and the facts alleged in the new claim. (3) If, on evaluation, the new facts are of an entirely different character from the existing facts in issue, the threshold for permission will not be met. Broadly similar facts, implicitly raised or understood, will not do. (4) ‘Same or substantially the same’ is not synonymous with ‘similar’. (5) Whilst, in borderline cases, the answer to this question may be substantially a ‘matter of impression’, in others it must be a question of analysis. (6) The purpose of the requirement at stage 3 is to avoid placing the defendant in a position where he will be obliged, after the expiry of the limitation period, to investigate facts, and obtain evidence of matters, completely outside the ambit of, and unrelated to, the facts which he could reasonably be assumed to have investigated for the purpose of defending the unamended claim. (7) It is thus necessary to consider the extent to which the defendants would be required to embark upon an investigation of facts which they would not previously have been concerned to investigate. At stage 3 the court is concerned at a much less abstract, more granular, level than at stage 2; it is a matter of considering the whole range of facts which are likelyto be adduced at trial….”
[49]In Ballinger v Mercer [2014] EWCA Civ 996(at [34]), the Court of Appeal endorsed guidance given by Colman J in BP plc v Aon Ltd [2006] 1 Lloyd’s Rep 549, 558 where he said at [53]:
“ In Lloyds Bank plc v Rogers [1997] TLR 154 Hobhouse LJ said of section 35: ‘The policy of the section was that, if factual issues were in any event going to be litigated between the parties, the parties should be able to rely on any cause of action which substantially arises from those facts.”
[50]If there is a new cause of action, it is sufficient if the facts are substantially the same as those already in issue against a different defendant. This was accepted by counsel for MDWIS/MDWSS.[51]AmTrust relied on Viegasv Cutrale [2025] 1 WLR 1467. But that was a rather different position. There was no difference between the limitation position at the time of the Claim Form and the time of amendment. Either way, both original and amended claim were either in time or out of time. So the amendments caused no prejudice to the limitation position. That was the context in which the Court of Appeal said at [31] that: “the mere fact that there may be an arguable limitation defence will not preclude an amendment. The defendant’s position for limitation purposes must be made worse as a result of [the doctrine of] relation back. “ That is not the present case. Narrowing of issues

Narrowing of issues

[52]After the first day of the hearing, counsel for AmTrust withdrew a number of allegations made in the latest draft Particulars of Claim and thus narrowed the issues between the parties.[53]Counsel for AmTrust expressly accepted that to the extent new causes of action were pleaded by amendment, there was an arguable case that they were time-barred but submitted that(i) the amendments did not involve new causes of action(ii) if they did, they arose from the same or substantially the same facts as those facts already in issue.[54]Because of the narrowing of issues, and the various drafts of the Amended Particulars of Claim, it has been difficult to keep track of exactly what is and is not in issue between the parties. This judgment therefore deals with those matters which, as I understand the position, remain in issue between the parties. Those which are no longer in issue can be dealt with by an agreed order.[55]Thus I will allow applications for leave to amend which are not disputed. The joining of MDWSS is not objected to (subject to the particular matters considered below) and Amtrust has changed its name which needs to be reflected on the pleading.[56]Importantly, AmTrust now (as of the second day of the hearing) concedes that in relation to each of the proposed amendments, there is a reasonably arguable limitation defence. It follows that I only have jurisdiction to allow any of the amendments if either(i) they do not, on analysis, give rise to a new cause of action or(ii) they arise out of the same or substantially the same facts as are already an issue in the existing claim. Amendments to duty of care[57]MDWIS/MDWSS contend that the proposed amendments to the duty of care at paragraphs 18B(2)(3) and 18F-H give rise to new causes of action because(i) they rely on a series of new facts not contained in the original Particulars of Claim and(ii) no reliance was originally pleaded.[58]I reject this contention. The claim for a duty of care in tort owed by MDWIS/MDWSS to AmTrust was clearly pleaded in the original Claim Form and Particulars of Claim. AmTrust have now pleaded the precise basis and justification for that duty of care in more detail and have expanded the claim but that does not involve a new cause of action. Disputed amendments[59]I deal below with each of the contested amendments individually. In each case it is necessary to consider whether they raise new causes of action and if so whether they arise out of substantially the same facts. If I am satisfied there is jurisdiction, I have to consider whether to allow the amendments as a matter of discretion.[60]It is important to have in mind that these disputed amendments relate to matters which arose many years ago. The claims were set out in 2023, when the claim was commenced, in an appendix to the original pleading. The fact that the claim is set out in an appendix rather masks the fact that these claims on individual properties are likely to be very extensive and complicated to try. The very limited information given in the original appendices masks the complexity and extensive nature of the claims and matters involved. Each property could well involve a substantial trial in itself, and it is difficult to judge what is or was involved. However, I bear in mind in approaching all the amendments in issue that: i) The lack of detail originally pleaded makes it very difficult for AmTrust to satisfy me that on a balance of probabilities the new claims arise on substantially the same facts because it was wholly unclear from the original pleading what facts were in issue. This is in my view an important point, and differs from many cases where it is relatively clear which facts are or will be in issue. ii) Moreover, the appendices to the original Particulars of Claim are often difficult to follow and difficult to match against the Particulars of Claim that incorporates them. Trying to work out exactly what the original claims were is often extremely difficult and confusing. iii) This is not a case where simply the detail of the claims is different; the new claims appear often to raise many complex issues and will not be straightforward to try. iv) It would have been almost impossible for MDIS or MDWIS/MDWSS to investigate the individual claims after the original pleading because of the level of generality. v) These are matters which took place many years ago which inevitably increases the difficulty in investigating them now. Case pleaded against MDWIS/MDWSS at Appendix 1 to the Particulars of Claim[61]This relates to four properties: Norburys Yard, 54 Whinny Brae, 54-56 Drury Lane and Zaya House.[62]These arise under paragraphs 35-37 of the Particulars of Claim. These paragraphs are in themselves somewhat obscure and there is a mismatch and confusion when one tries to match them with Appendix 1.[63]Paragraph 35 pleads a case of negligence against MDWIS/MDWSS in relation to Certificates of Approval and a case of vicarious liability against MDIS for the negligence of MDWIS/MDWSS.[64]Paragraph 36 (now not pursued) pleaded negligent grant of certificates of insurance by MDIS.[65]Paragraph 37 pleaded consequential breach of duty against MDIS and MDWIS/MDWSS. It pleads in contract and tort. There does not appear to be any case in contract between AmTrust and MDWIS/MDWSS and no explanation was available as to this reference.[66]Appendix 1 is headed “Failure Properly to Inspect” although the allegations go well beyond that and many of them are not allegations of failure to inspect at all.[67]The original claim in relation to each of Norburys Yard, 54 Whinny Brae, 54-56 Drury Lane and Zaya House expressly made claims only against MDIS. It was submitted on behalf of AmTrust that because some of the breaches could only have been committed by MDWIS/MDWSS, this should be read as involving claims against MDWIS/MDWSS but it is impossible to accept that on even the most generous reading. So these are new causes of action now against MDWIS/MDWSS.[68]AmTrust submits that if these claims as now pleaded involve new causes of action against MDWIS/MDWSS, they can rely on the “substantially the same facts” principle. The last paragraph of each table in Appendix 1 sets out breaches in relation to surveying. Thus in relation to Norburys Yard the original claim made was an underwriting failure claim with the following cryptically added at the end:
“LABC Technical manual v6 applied. There were breaches of : 1. Section 6.1 (basements): design (i) (ii) (v)(vi) and (vii) 2.

(i) and (iii), design (i) and (iv)”

[69]Now the case to be pleaded against MDWIS/MDWSS is as follows: “Further MDWIS negligently failed to identify breaches of the LABC Technical Manual that would have or ought reasonably to have been recognised by a reasonably competent surveyor when carrying out its technical audit and/or site inspection(s) and/or failed to advise MDIS of (i) the specific risk posed by the location of the Property and/or (2) the failure of the underground carpark design and/or breaches of the LABC Technical Manual that were such that a reasonably competent surveyor would not have advised that the risk be accepted as a standard risk. “[70]Particularly given that there was no original claim to be investigated involving MDWIS/MDWSS it is impossible to treat this new claim as arising from substantially the same facts as anything already in issue.[71]The position on Whinny Brae is similar. An original claim for negligent underwriting against MDIS had a reference tagged on the end for breach of Premier Guarantee Technical Manual v11 with a reference to damp proofing materials. Now there is a proposed claim against MDWSS for inadequate inspection of inadequate waterproofing design, damp proof course, sealing of windows, improper materials being used, inadequate stonework detailing, brickwork pointing, rainwater goods and cavity trays.[72]This looks a substantial exercise not arising from anything originally pleaded and again I conclude I have no jurisdiction to allow the amendment.[73]Drury Lane again originally had underwriting claims but a reference to LABC Technical Manual v7. Now there is a claim that there was a flaw in the foundation design. I do not accept this arises out of substantially the same facts.[74]Similarly, in relation to Zaya House the original pleading was mostly an underwriting claim but included reference to breach of Premier Guarantee Technical Manual v11. Now there are wide-ranging claims of defective waterproofing and construction, defective drainage and glazing and use of a bespoke Nudura ICF Construction scheme. I reach the same conclusion, that I have no jurisdiction.[75]In relation to the claims in relation to these four properties, even if I thought I had jurisdiction, I would have refused the amendments as a matter of discretion. In this regard I refer to paragraphs 59 and 60 above. There were no claims originally in relation to these properties against MDWIS/MDWSS and thus no reason for them to investigate them. There are somewhat obscure references to manuals against MDIS which have now mutated into wide-ranging and substantial claims against MDWIS/MDWSS brought for the first time outside the limitation period and it is unfair to them to allow the amendments. Failure to inspect[76]MDIS objects to paragraphs 18C, 18D and 34G(2) as a new claim. The claim in these paragraphs is a claim that MDIS should have ensured MDWIS/MDWSS had possession of relevant scheme documents, understood their content and understood it was required to carry out its delegated role in accordance with the same.[77]This is a new claim. Although it is not objected to on the basis it is not arguable, it is said to arise from the obligation to carry out services under the Binder with reasonable care and skill. It will presumably involve a range of new facts as to what information was given to which surveyor at what time, presumably by way of schedules over many years, none of which seem otherwise to be in issue.[78]MDIS submit that on the unamended claim, the only factual investigation required in respect of MDIS’s liability under this head was as to whether MDWIS/MDWSS had acted negligently. On the amended claim, a multi-faceted investigation would be required into MDIS’s own conduct including its assessment of the risk before it was passed to the surveyors, MDIS’s supply of documents to and instruction of the surveyors, along with its direction, supervision, monitoring and audit of the surveying function by the surveyors, and identification and remedy of specific alleged failings. Whereas, on the unamended case, only expert evidence as to that which a reasonably competent surveyor would have done would be potentially relevant, on the amended case it would also be necessary to procure expert evidence as to that which a reasonably competent coverholder would have done in respect of each of the properties included in Appendix 1, in terms of declining cover before referring for survey, procuring warranties and indemnity insurance, instructing the surveyors, audit, supervision, monitoring, and identification and remedying of failings.[79]Both as a matter of jurisdiction and discretion, given the new facts and the problems in investigating exactly what documents were given to what surveyors when many years after the event, I refuse this amendment. Again, I refer to paragraphs 59 and 60 above. Accepting offers of settlement[80]MDIS objects to paragraphs 55A and 55B. These paragraphs relate to MDIS accepting offers of settlement which were too low. The relevant property is St Georges Court.[81]The original pleading alleged failure to pursue recoveries from third parties (paragraphs 53-55). These claims referred to Appendix 5. The only claim remaining relates to St Georges Court. The only information originally pleaded in Appendix 5 was that there was a recovery opportunity lost due to limitation in 2013.[82]It is now said that MDIS should not have accepted a settlement offer of £150,000 and should have pursued the claim before the limitation period expired. It is pleaded in part as a failure to pursue settlement but if an offer of settlement was accepted, it is difficult to see that claim makes sense.[83]Again, the acceptance of an inadequate settlement is a different claim from not pursuing a claim. The facts are different. MDIS say the unamended claim required investigation of what the limitation period for the claim was, whether it was missed, and the prospects of recovery as at that date. They say the amended claim in contrast requires:a. Investigation of MDIS’s entire conduct of the claim from June 2016 onwards, and of what motivated its conduct, as MDIS is accused of failing diligently to pursue recovery from that date on two different bases;b. Whether the whole claim had in fact been incurred from June 2016, and whether any reasonably competent coverholder would have appreciated this;c. Whether no reasonably competent coverholder would have accepted an offer in settlement of £150,000 in respect of expenditure of £250,000 in November 2017, in all of the circumstances that then pertained.[84]Moreover, these are substantial claims which arose many years ago. They are likely to involve substantial evidence. Again, both as a matter of jurisdiction and amendment I refuse this amendment. In relation to discretion, once again I refer to paragraphs 59 and 60 above. Conclusion[85]I will give judgment remotely and deal with consequential matters on paper unless any party requires an oral hearing. This case seems to me better fitted to the TCC and I invite the parties to consider whether it should be transferred.[86]I dismiss the application for summary judgment, and disallow all the amendments referred to in this judgment save in relation to the duty of care claim as explained above. Other amendments and applications, which in my understanding are not controversial, should be dealt with by an agreed order.

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