British Telecommunications Plc v Luck & Ors [2014] EWHC 290 (QB)

[2014] EWHC 290 (QB)Case No Appeal No.QB/2013/0568IN THE HIGH COURT OF JUSTICEQUEEN'S BENCH DIVISIONON APPEAL FROM MASTER LESLIEVenue Royal Courts of Justice, Strand, London, WC2A 2LLDate 17/02/2014
Before
MR. JUSTICE TEARE
Between
BRITISH TELECOMMUNICATIONS PLCDefendant/MICHELLE LUCK AND OTHERSClaimants/
David E. Grant (instructed by British Telecommunications Solicitors) for AppellantJonathan Cohen (instructed by Charles Russell LLP) for RespondentsHearing Hearing dates: 6 February 2014
JudgmentMr. Justice Teare :
[1]The Claimants were, prior to August 2000, employees of the Defendant (“BT”). In that month their employment was transferred to e-peopleserve Ltd. (“EPS”), a joint venture vehicle established by BT and Accenture. Whilst employed by BT the Claimants were members of the BT pension scheme. It is the Claimants’ case that BT represented to them that the terms of their employment (including pension) would be the same following their transfer to EPS and that their ability to participate in the BT pension scheme would not be prejudiced and would continue indefinitely. However, by a share acquisition agreement dated 28 February 2002 BT sold its shareholding in EPS to Accenture and on 31 August 2002 This is the pleaded date and accordingly it is the date I have used in this judgment. I am told however that a more accurate date is “towards the end of September.” the Claimants ceased to be members of the BT pension scheme. The Claimants say that the replacement scheme (the Accenture HR Services Pension Plan) is a defined contribution scheme and a not defined benefit scheme (as is the BT pension scheme) and was therefore to the significant financial detriment of the Claimants.[2]The Claimants allege that the representations made by BT were false in that in August 2000 BT knew that it would withdraw from EPS within 3 years and that the Claimants would thereafter cease to be eligible as members of the BT pension scheme. The Claimants say that BT had agreed with Accenture to withdraw from the joint venture and therefore that the Claimants would be removed from the BT pension scheme. They say that if the representations had not been made they would not have entered employment with EPS. They say they have suffered loss in that their pensions will be significantly lower in value than they would have been had the Claimants remained in the BT pension scheme after 31 August 2002.[3]The Claimants commenced proceedings against BT on 27 August 2008 which was just 3 days before the expiry of 6 years from the Claimants ceasing to be members of the BT pension scheme but more than 6 years from the Claimants being transferred into the employment of EPS.[4]Particulars of Claim were served on 22 December 2008 and amended on 28 September 2009. The Claimants advanced claims both in contract and in tort. The claim in tort is that the representations were made fraudulently or negligently. The claim in contract is that it was an implied term of the Claimants’ contract of employment that reasonable care would be taken in the making of the representations.[5]A Defence was served on 3 February 2010. BT said that the claim was time barred in that any cause of action in contract or tort had accrued more than 6 years before 27 August 2008. As to the merits of the claim BT said that the representations they had made were true, alternatively, that they had an honest and reasonable belief that they were true. As to the suggested loss BT said that the joint venture was inevitable and that was nothing the Claimants could have done to negotiate the opportunity to remain in the BT pension scheme. Apart from further amendments to the pleadings little progress appears to have been made in the action.[6]On 13 February 2013 the Claimants issued an application notice seeking an order that the limitation defence be struck out on the grounds that it had no real prospect of success. On 8 March 2013 BT issued an application seeking an order that the claim be struck out by reason of the limitation defence. Those applications were heard and determined by Master Leslie on 24 and 25 September 2013.[7]Master Leslie ordered that the claim in contract, but not the claim in tort, be struck out. He ordered that the limitation defence to the claim in tort be struck out. His reasoning was that, as was common ground, the cause of action contract had accrued more than 6 years before the action was commenced, namely, in August 2000, and there was no triable issue that the commencement of the limitation period had been postponed by reason of section 32 of the Limitation Act 1980. So far as the claim in tort was concerned he held that the cause of action in tort accrued less than 6 years before the action was commenced, namely, on 31 August 2002, and he therefore struck out the limitation defence. (He also gave directions for the future conduct of the proceedings. Disclosure was to take place by 10 January 2014 and witness statements were to be exchanged by 28 February 2014. My understanding is that no disclosure has taken place, the parties having agreed a stay pending the appeal.)[8]BT now appeals (with permission granted by Bean J.) from the Master’s decision to refuse to strike out the claim in tort and his decision to strike out the limitation defence to the claim in tort. By a Respondents’ Notice the Claimants have said that the claim in tort should not have been struck out on the additional ground that the Claimants have raised a triable issue that the start of the applicable limitation period was postponed as a result of section 32 of the Limitation Act 1980. For the same reason it is said that the claim in contract ought not to have been struck out.

The accrual of the cause of action in tort

[9]It is common ground that a cause of action in tort does not accrue until actual damage has been suffered.[10]BT says that on the basis of the Claimant’s pleading, which must be assumed to be true for this purpose, the Claimants suffered actual damage when they left the employment of BT and became employees of EPS in August 2000, for from that date the Claimants’ position had changed. They were then exposed to the risk, indeed the likelihood (and arguably the inevitability After this judgment was handed down in draft counsel for BT queried my summary of BT’s case based upon the Claimants’ pleading. I was aware that BT said that the Claimants’ case was that removal from the BT pension scheme was inevitable. In circumstances where the Claimants’ case was based upon an alleged agreement to withdraw (see paragraph 6 of the Re-Amended Particulars of Claim) it seemed to me that the phrase I used (a “likelihood” that BT would withdraw) fairly reflected the pleading, but I recognised that BT’s understanding of the pleading (that withdrawal was inevitable) was arguable. I also had in mind that the Claimants themselves had pleaded (in paragraph 6) that the Claimants “would or would be likely” to cease to be eligible to be members of the scheme. I was told that BT denied any obligation to leave the joint venture. ), that BT would leave the joint venture and that the Claimants would be removed from the BT scheme. Since the Claimants did not commence proceedings until 2008 their claim in tort must be time-barred, subject always to the effect of section 32 of the Limitation Act.[11]The Claimants say that they did not suffer loss in August 2000 when they were transferred to the employment of EPS for the terms upon which they were employed were no different from what they had been when employed by BT. That is the purpose of the TUPE regulations. In addition they remained members of the BT pension scheme. The earliest date on which they suffered damage was when they ceased to be members of the BT scheme on 31 August 2002, which was just less than 6 years before proceedings were commenced on 28 August 2008.[12]Master Leslie held that the Claimants’ claim in tort was not time barred. His reasoning (in an ex tempore judgment) was as follows:
“17. …………….If one of the Claimants, a BT employee, had resigned two years into his new employment of two years after his transfer to EPS, he would have suffered no damage. The Claimant who remained in EPS suffered no damage ….. A BT employee after transfer into EPS who died, (any surviving spouse) would suffer no loss; there would be no loss to his estate, no diminution in the value of his pension. …………So at the time that the employees were transferred into EPS’ employment, but remained in the British Telecom pension scheme, it is clear that they suffered no loss. In my judgment, their position was precisely the same before as after the transfer. Indeed, as Mr. Cohen pointed out and I accept, whilst there always a mechanism by which the British Telecom pension scheme could be disappplied to any particular employee under the terms of the scheme it remained the same both before and afterwards……So the only time that actual damage is suffered is when the employees are removed from the BT pension scheme. ”
[13]This approach was, said Mr. Cohen, on behalf of the Claimants, based upon common sense. However, it was attacked by Mr. Grant, on behalf of BT, by reference to several recent authorities. Mr. Grant submitted that the mere possibility of loss was actual damage. Similarly, the fact that a claimant could prevent such loss materialising by taking his pension after he had been transferred into the employment of EPS but before he had ceased to be a member of the BT pension scheme does not lead to the conclusion that he did not suffer a loss when he was transferred into the employment of EPS.[14]Determining when economic or financial damage has been suffered as a result of negligence is not a simple task. The question has been reviewed by the House of Lords in Law Society v Sephton [2006] 2 AC 543 and since then by the Court of Appeal in at least three cases; see Shore v Sedgwick Financial Services [2008] PNLR 874, Pegasus Management Holdings v Ernst & Young [2009] PNLR 209 and [2010] PNLR 438 and Axa Insurance v Akther & Darby [2009] PNLR 455 and [2010] 1 WLR 1662.[15]However, none of the authorities concerns facts similar to those of the present case. The question when damage is suffered must be a fact sensitive matter. Indeed, I note that in Axa Insurance v Akther & Darby [2009] PNLR 455 at p.463 Flaux J. observed that “any number of the cases emphasise that whether or not actual damage has been suffered is, in each case, a fact specific question…”. The authorities have been analysed in considerable detail in the recent cases and so I do not consider it necessary to embark upon my own analysis of them. Rather, I will concentrate on Mr. Grant’s submissions as to why the Master reached the wrong conclusion.[16]Mr. Grant’s principal point was that the mere possibility of loss is sufficient to show that actual damage has been suffered. In support of that submission he relied upon Shore v Sedgwick Financial Services [2008] PNLR 874 at paragraph 42 per Dyson LJ who said:
“It is the possibility of actual financial harm that constitutes the loss. That possibility is present even if there [is] also the possibility that the claimant will be financially better off as a result of being exposed to the risk.”
[17]Mr. Grant also relied upon Pegasus Management Holdings v Ernst & Young [2010] PNLR 438 at paragraph 84 where per Rimer LJ noted that the possibility or risk of future loss was recognised in the authorities as capable of amounting to actual damage.[18]In understanding these observations it is necessary to bear in mind the facts of the cases in which they were made. Shore v Sedgwick involved an allegation of professional negligence against a financial firm who advised the claimant (the managing director of a company which had been taken over) not to transfer his pension into the new company’s pension scheme but to transfer it into a personal pension scheme. He alleged that he ought to have been advised to continue with his existing occupational pension, alternatively, to purchase an annuity. It was held that he suffered damage when he transferred his pension into the personal pension because, from his point of view, the investment was less advantageous at that time. Dyson LJ said (at paragraph 37):
“It is Mr. Shore’s case (assumed for present purposes to be established) that the PFW scheme was inferior to the Avesta scheme because it was riskier. It was inferior because Mr. Shore wanted a secure scheme: he did not want to take risks. In other words, from Mr. Shore’s point of view, it was less advantageous and caused him detriment………….he made a risky investment with an uncertain income stream instead of a safe investment with a fixed and certain income stream which is what he wanted. ”
[19]Pegasus involved an allegation of professional negligence against an accountant who advised that certain businesses be purchased in a particular manner in order to avoid liability for corporation tax. Rimer LJ said at paragraph 82 that:
“there is a clear line of Court of Appeal authority that damage sufficient to complete the tort of negligence will or may be caused in a “wrong transaction” case by the fact that, as a result of the defendant’s negligence, the claimant has not received what he ought to have received. ”
[20]In the present case the Claimants’ case is that they relied upon the representations of BT by, I infer, agreeing to transfer their employment to EPS. They say that if the representations had not been made they would not have entered the employment of EPS in the existing circumstances and would have either forced BT to negotiate the joint venture on terms which protected the Claimants’ rights or prevented the joint venture from proceeding or sought alternative employment with BT on terms which protected their pension rights. There was some debate on the hearing of the appeal as to whether the Claimants’ pleaded case was that, in the absence of the misrepresentations, they would not have entered the employment of EPS (“a no transaction case”) or would have done so but on different terms (“a flawed transaction” case) or both. Since the Claimants have pleaded in terms that they would not have entered the employment of EPS I consider that the pleaded case is a “no transaction” case and that the particulars given in the pleading should not be regarded as departing from that clear position. That was how the Master regarded the plea; see paragraph 15 of his judgment. In any event, although this “classification” had been challenged in his Skeleton Argument, Mr. Grant accepted in his oral submissions that correct “classification” of the Claimants’ position was not the answer to the case.[21]BT can fairly describe the Claimants’ position in August 2000 in the following way. The Claimants were only willing to enter the employment of EPS on the basis that their ability to participate in the BT pension scheme would not be prejudiced and would continue indefinitely. However, as a result of BT’s misrepresentations they entered the employment of EPS in August 2000 in circumstances in which they were at risk of being removed from the BT pension scheme within 3 years, BT having agreed with Accenture that it would withdraw from EPS and therefore that the Claimants would be removed from the BT pension scheme. This was a less advantageous position to that which the Claimants believed they were in. Upon the approach of the Court of Appeal in Shore v Sedgwick and Pegasus it is arguable that the Claimants suffered loss in August in August 2000 by being exposed to the risk (indeed the likelihood, and arguably the inevitability) of being removed from the pension scheme within 3 years. After this judgment was handed down in draft counsel for BT invited me to acknowledge his argument that the Claimants’ legal position had changed in August 2000 in that their right to remain in the BT pension scheme was now time limited, rather than open-ended. I had intended to recognise that argument in the last sentence of paragraph 21 (and in paragraphs 10, 33 and 38).[22]Mr. Cohen submitted that this analysis was flawed. The terms upon which the Claimants were employed before August 2000 were the same as the terms upon which they were employed after August 2000. The only difference was the identity of their employer. That is the effect of the TUPE regulations. The employer, whether it be BT or EPS, was able, both before and after August 2000, to remove the Claimants from the BT pension scheme (for the future) either by giving notice to terminate their employment or by exercising a unilateral right of amendment given to the employer by the contract of employment. There was thus no difference between the position of the Claimants as employees of BT or as employees of EPS. Their pension rights were exactly the same in both cases. It was only when BT withdrew from the joint venture and EPS exercised its contractual ability to remove the Claimants from the BT pension scheme (for the future) and offered a less advantageous replacement scheme that they suffered a loss. Only then could that loss be assessed by comparing the value of the value of the Claimants’ pension rights in the BT scheme with value of their pension rights in the replacement scheme.[23]Mr. Cohen’s submission was accepted by the Master. The question which must be determined on this appeal is whether the Master’s decision was wrong.[24]Mr. Cohen said that the Master had arrived at a “common sense solution to a difficult legal problem” and that this court should only interfere with if satisfied that it was wrong. However, he also submitted that the Master’s decision was supported by certain “key” authorities.[25]Tempting though it is to say that the question when economic damage is suffered is a question of common sense, I do not consider that I am free so to regard it. In Law Society v Sephton [2006] 2 AC 543 Lord Hoffmann said (at paragraph 10) that an examination of a number of cases was unavoidable, in Shore v Sedgwick Financial Services [2008] PNLR 874 Dyson LJ said (at paragraph 26) that the question had troubled the courts on a number of occasions in recent years and in Axa Insurance v Akther & Darby [2010] 1 WLR 1662 Arden LJ said (at paragraph 28) that the cases since Sephton had demonstrated the importance and difficulty of the relevant law. The present appeal cannot therefore be decided by reference to Mr. Cohen’s appeal to common sense but by considering whether the Master’s approach is supported by the authorities.[26]The first “key authority” relied by Mr. Cohen is First National Commercial Bank v Humberts [1995] 2 AER 673, in which a bank advanced funds to a borrower on the faith of a negligent valuation of the property upon which the loan was to be secured. Saville LJ held that on the facts of the case no loss was sustained when the advance was made because the amount of the bank’s outlay was less than the value of the security and no other losses could be proved to have occurred more than 6 years before action was commenced; see pp.676 b – 679 g. The case was to be contrasted with cases where “the court was able to conclude that the transaction there and then caused the claimant loss, on the basis that if the injured party had been put in the position he would have occupied but for the breach of duty, the transaction in question would have provided greater rights, or imposed lesser liabilities or obligations than was the case; and that the difference between these two states of affairs could be quantified in money terms at the date of the transaction.”[27]The approach of Saville LJ has not been doubted in subsequent cases (see for example Sephton at paragraphs 19-21 per Lord Hoffmann and at paragraphs 42-45 per Lord Walker). Mr. Cohen submitted that First National Commercial Bank v Humberts was indistinguishable from the present case because, just as the bank would not have entered the loan agreement had the defendant performed its duty, so the Claimants would not have agreed to be transferred to the employment of EPS had BT performed its duty. I accept that to that extent the facts of the two cases are similar. But that circumstance does not lead necessarily to a clear cut answer, as suggested by Mr. Cohen. It is necessary to examine the circumstances of the case with some care, as Saville LJ did in First National Commercial Bank v Humberts between pp.676 and 679,to see when actual damage was suffered.[28]The second “key authority” relied upon was Law Society v Sephton [2006] 2 AC 543 in which the Law Society alleged that a firm of accountants had breached its duty of care to the Law Society when preparing reports on a solicitor. The solicitor had been misappropriating client moneys but the accountants provided clean annual reports. When complaints were made against the solicitor the Law Society made payments out of its compensation fund. The Law Society sued the accountants and the question was whether Law Society had suffered actual damage when the accountants issued a clean report or when a claim was made on the fund. The House of Lords held that actual damage was not suffered until a claim was made. The possibility that the Law Society may have to pay money in the future, a contingent liability, was not actual damage until the contingency occurred.[29]At paragraph 70 Lord Mance drew a distinction between a case where the defendant’s negligence depreciated an asset of the claimant (including a chose in action) and a case where the defendant’s negligence caused a claimant to enter into a transaction which he would not otherwise have entered. Mr. Cohen said that the present case was in the latter category. However, Lord Mance did not suggest that such circumstance gave rise to a clear cut answer to the question of when did the claimant suffer loss. He merely observed that “a claimant does not necessarily suffer loss merely by being caused by negligence to enter into a transaction to which he would not otherwise have agreed.”[30]Similarly, Lord Hoffmann said in Sephton at paragraph 21 that in such a case “the answer may be more difficult. Despite the breach of duty, the transaction may on balance have originally been advantageous to the plaintiff and some evidence may be necessary to show when he was actually in a worse position.”[31]The Master’s own comment in the present case (in paragraph 16 of his judgment) was that in a no transaction case “it is a bit more complicated to divine when damage is actually caused”. That comment was, I think, correct. There is no hard and fast rule.[32]In my judgment, whether the present case should properly be regarded as a case where the negligence of BT caused the Claimants loss when they entered the employment of EPS or only when they ceased to be members of the BT pension scheme therefore depends upon a consideration of the facts (as pleaded by the Claimants) in this particular case. Mr. Cohen’s key authorities do not lead to the present case being decided in one particular way. They merely describe the possible answers to the question when is economic loss suffered. My approach in this regard is, I think, supported by the observation of Longmore LJ in Axa Insurance v Akther & Darby [2010] 1 WLR 1662 (at paragraph 78) that “…….there was no authority for counsel’s submission in that case that where a claimant would not have entered into the relevant transaction if he had been given the correct advice, the claimant has not, as a matter of law, suffered damage. It may be obvious that he has suffered damage as it was in the Nykredit case itself; or it may be necessary (in a benefit and burdens case) to adduce evidence as to the time when the claimant is worse off.”[33]In considering the circumstances of this case I am struck, on the one hand, by the circumstance, much emphasised by Mr. Cohen, that the legal position of the Claimants with regard to their employer was the same when they were employed by BT as it was when they were employed by EPS. That would suggest that they had not suffered any loss when they agreed to be transferred into the employment of EPS. On the other hand, in a real sense, as submitted by Mr. Grant, their position was demonstrably worse when employed by EPS; for they were at that time likely to be removed from the BT pension scheme within 3 years, a vulnerability which they did not have when employed by BT. That would suggest that actual damage was suffered when they agreed to be transferred into employment of EPS.[34]It is to be noted that the Claimants’ vulnerability stemmed, not from the terms of the Claimants’ contract of employment (for its terms were the same as when the Claimants were employed by BT) but from the likelihood that BT would leave the joint venture within 3 years (because they were contractually obliged to do so) and that in such circumstances EPS would exercise such powers as it had under the contracts of employment to remove the Claimants from the BT pension scheme.[35]In considering whether this vulnerability is “actual loss” for the purposes of completing the Claimants’ cause of action in tort, I have found Lord Mance’s approach in Sephton of assistance. Lord Mance concluded that it was not until the Law Society had received notice of a claim that it had suffered actual loss. His reasons for so concluding, after a review of the authorities, are encapsulated in the following passage at paragraph 76:
“First and foremost, the Society's legal position remained unchanged, even in public law, at least until after it received a claim. Second, it was not possible until after a claim was received for anyone to know which client(s) of Payne & Co might suffer what loss, whether any of them might be able, and choose, to assert that they had as a result suffered hardship justifying a grant out of the Fund and what the circumstances were in which the Society would have to exercise its discretion to make or refuse a grant. Third, in this situation, it is not appropriate to talk of the Fund or any other specific asset of the Society as having suffered any loss at least until after a hardship claim was made on the Society.”
[36]These reasons find an echo in the, albeit different, factual situation of the present case. First, as Mr. Cohen emphasised, save for the change in the identity of the Claimants’ employer, there was no change in the legal position of the Claimants as a result of entering the employment of EPS. That is the whole purpose of the TUPE regulations. The Claimants’ legal position with regard to their employer remained the same. Their bundle of legal rights and responsibilities contained in their contracts of employment and in their membership of the BP pension scheme remained the same. Second, it was not possible to know which of the former employees of BT had actually suffered a loss until BT left the joint venture and those employees who had not already taken their pension rights under the BT pension scheme were moved by EPS, exercising such powers as they had under the contract of employment, into the alternative pension scheme. Third, it was not appropriate to talk of the Claimants’ pension rights, their only relevant asset, as having suffered any loss until those pension rights had been changed by the Claimants being moved into a different and less advantageous pension scheme.[37]These considerations strongly suggest, in my judgment, that the Claimants did not suffer any actual loss until their pension rights had been changed on 31 August 2002.[38]Of course, in one respect the Claimants’ legal position had changed. Their employer was changed from BT to EPS. That change brought with it the likelihood that BT would discharge its contractual promise to Accenture and leave the joint venture within three years thus leading to EPS’s removal of the Claimants from the BT pension scheme. I have considered whether that change is one which can be regarded as having caused the Claimants an actual loss upon the Claimants’ transfer into the employment of EPS. Following the transfer of their employment the Claimants were vulnerable to the loss of their BT pension rights. I accept that in a broad sense such vulnerability can be described as a detriment. However, Lord Mance did not accept that every detriment will constitute damage for the purposes of a claim in tort; see paragraph 79. The same point had been made by Lord Walker in paragraph 43 where he preferred the expression “financially worse off” to any detriment. In the present case the change of employer from BT to EPS was a detriment to former employees of BT but unless and until any of them had been moved from the BT pension scheme into the alternative scheme before they had taken their pension it was not possible to say which of them were financially worse off.[39]Further, the detriment suffered by the Claimants on entering the employment of EPS arose, not from the terms of contract of employment into which the Claimants entered with EPS, but from the collateral obligation of BT to Accenture to leave the joint venture. That circumstance suggests that the detriment should not be regarded as an actual loss; see the approach of Lord Mance in Sephton at paragraph 82 to the decision in Gordon v JB Wheatley [2000] LRPN 605 (and the similar comments by Lord Walker at paragraph 51 and by Lord Hoffmann at paragraphs 24 and 25).[40]These considerations have to be put against the submission of Mr. Grant, based upon the passages in Pegasus Management Holdings v Ernst & Young [2010] PNLR 438 and Shore v Sedgwick Financial Services [2008] PNLR 874 to which I have already referred, that where the claimant has, as result of the defendant’s negligence, not received that which he expected to receive that can constitute actual loss and that the mere possibility of loss can constitute actual damage. However, it is important to bear in mind that in the later of those two cases, Pegasus, Rimer LJ accepted at paragraph 83 that there is no presumption that the non-delivery by the defendants of what the claimant ought to have received means that relevant damage has been suffered, though he also agreed that it may be relatively easy to infer that such damage has been suffered. Thus there is no hard and fast rule that where a claimant has not received that which he expected to receive he has suffered actual damage, though an inference to that effect can easily be drawn in some circumstances. The question is whether actual damage can properly be inferred in all the circumstances of the case under consideration.[41]In the present case, given the features of the case to which I have referred in paragraphs 36-39 above, I have concluded that it would not be right to infer from the fact that the Claimants expected in August 2000 that their ability to participate in the BT pension scheme would not be prejudiced and would continue indefinitely that they suffered actual damage immediately upon entering the employment of EPS. Having entered the employment of EPS the Claimants’ bundle of rights and responsibilities in their contracts of employment were unchanged and they remained members of the BT pension scheme. It was only when they were removed from the BT pension scheme that their ability to participate in the BT pension scheme (for the future) was lost.[42]Mr. Grant also relied upon the “policy” point identified by Lord Nicholls in Nykredit Mortgage Bank v Edward Erdman [1997] 1 WLR 1627 at p.1633:
“Further, within the bounds of sense and reasonableness the policy of the law should be to advance, rather then retard, the accrual of a cause of action. This is especially so if the law provides parallel causes of action in contract and in tort in respect of the same conduct. The disparity between the time when these parallel causes of action arise should smaller, rather than greater.”
[43]However, as recognised by Lord Mance in Sephton at paragraph 80:
“……..there are limits to the extent to which the accrual of causes of action in contract and tort can be assimilated. No issue regarding relevant and measurable damage can arise in contract, since nominal damages can be awarded for any breach.”
[44]I recognise, as I must, the policy argument identified by Lord Nicholls but I must still endeavour to decide when actual damage was suffered by the Claimants. For the reasons which I have endeavoured to express actual damage was suffered by the Claimants when they ceased to be members of the BT pension scheme.[45]Mr. Cohen also submitted that the cause of action in contract is much less beneficial to the Claimants because BT is entitled to have any damages in contract limited to the notice period; Hagen v ICI Chemicals and Polymers Ltd [2002] Pensions LR 1 per Elias J. at paragraphs 148-157. No such limit applies to the cause of action in tort. The cause of action in tort is therefore the “natural” cause of action and in such circumstances there is less, if any need, to assimilate the limitation periods; cf Axa Insurance v Akther & Darby [2010] 1 WLR 1662 per Longmore LJ at paragraph 83. This may well be a further reason for not giving effect in this case to Lord Nicholls’ policy factor. But my response to the policy factor is based upon Lord Mance’s comment in Sephton and the need to decide when actual damage was suffered by the Claimants.[46]I have therefore concluded that the Master’s decision on the accrual of the cause of action in tort was correct and must dismiss BT’s appeal.

Section 32 of the Limitation Act 1980

[47]It is unnecessary to decide this point and Mr. Cohen expressly requested me not to deal with it if he succeeded in resisting BT’s appeal which he has. I shall therefore not deal with it.

Directions

[48]The parties should endeavour to agree upon what alterations are required to the directions given by the Master to enable this matter to proceed to trial.

Cited in 2 later judgments