High Court rejects City firm’s bid to strike out negligence claim


High Court: Not an appropriate case for striking out

The High Court has rejected an application by global giant Dentons to strike out a negligence claim made against it as a third party.

The court heard in Capita Pension Trustees and another v Sedgwick Financial Services and others [2019] EWHC 314 (Ch) that Dentons applied to strike out four paragraphs from an additional claim for an indemnity or contribution by Sedgwick relating to an “alleged retainer” with the law firm.

Master Shuman said this would have the effect of disposing of the additional claim “in its entirety”.

She said that Sedgwick based its additional claim on advice what was then Denton Hall should have given the trustees of the Sea Containers 1990 Pension Scheme on how to amend the scheme effectively.

Master Shuman said Dentons denied the claim partly “on the basis that it was not retained or instructed, or otherwise owes a duty” to give the advice.

The main action in the case was a claim of professional negligence by the pension trustees against Sedgwick and others for their advice on the administration of the 1990 scheme.

The 1990 scheme attempted to equalise benefits for members, including between men and women, but the attempt failed following High Court litigation, and it was not until 2003 that the changes could came into force under a new deed and rules.

Sedgwick provided administrative, consultancy and actuarial services in relation to the 1990 scheme, but denied providing legal services. Dentons provided legal services to the trustees “at various times”.

Dentons argued that there was “no general retainer” between it and the trustees in relation to the 1990 scheme and that any advice it gave on the scheme “related strictly” to employment law matters.

Master Shuman said the context of the case was that Dentons drafted the 1990 interim deed and went on to draft the 1995 deed and rules, which “wrongly assumed” that equalisation had already been achieved.

“The third party was also involved in the 1983 scheme which also attempted to effect changes, unsuccessfully.”

The master said: “All of this of course does not automatically give rise to a duty to advise on the legal formalities necessary to equalise the members rights under the 1990 scheme.

“It is a matter for the defendants to prove a duty arising in contract or in tort and the scope of that duty.

“However, the third party’s role was arguably more extensive than simply advising on employment issues in respect of the 1990 scheme.

“The test to be applied is whether the defendants have no reasonable prospect of succeeding on the claim. I do not need to find on a summary basis that they are bound to succeed.”

Master Shuman concluded that “this is not an appropriate case for striking out” or for summary judgment, although he did require the defendants to amend their additional claim.

She was also particularly scathing about an oral application made by Dentons to submit further evidence.

“Unless it is a matter of extreme urgency I would expect such applications to be made by application notice and supported by evidence.

“When I say evidence I am referring to a witness statement signed with a statement of truth, not a raft of correspondence sent in piecemeal fashion to the court.”

The master said she agreed with counsel for the defendants’ observations that the hearing process required parties to submit evidence relevant to the hearing in advance and make their submissions at the hearing – and then, once the evidence and submissions closed, the court would deliver its decision.

“Adherence to this process is essential for reasons of procedural fairness and practical efficiency. If it is not followed, or departed from without good reason, it leads to unfairness and an unjustifiable use of the court’s and parties’ resources’.”




Leave a Comment

By clicking Submit you consent to Legal Futures storing your personal data and confirm you have read our Privacy Policy and section 5 of our Terms & Conditions which deals with user-generated content. All comments will be moderated before posting.

Required fields are marked *
Email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Reports

No larger firm can ignore the demands of innovation – that was the clear message from our most recent roundtable: “The law firm of the future”, sponsored by LexisNexis Enterprise Solutions. It comes in many forms, predominantly but not just technology, and is not simply a case of automating process. Expertise and process are not mutually exclusive.

Blog

20 May 2019

My membership site changed my life – could it change yours?

One day I had a lightbulb moment. “Why don’t I set up a website with basic information for people which they pay to access? The fees would pay for the site and my time.” That thought changed my life.

Read More

Loading animation