Brightwell: No sense of urgency from claimants
The High Court has refused a time extension to claimants to serve a professional negligence claim on a law firm over the restructuring of a trust.
Master Brightwell said he was “unable to come to the view that there is a good reason” for failure to serve the claim form in time, and fault for the inability to serve could not be laid “at the door of the defendants”, including law firm Shakespeare Martineau and accountants BDO.
The claimants are beneficiaries and trustees of three family trusts established by the late William Parker in 1961 and 1967, and by his will following his death in 1985. The settlements were restructured in 2008.
The claimants alleged negligence on the part of the defendant advisers on the restructuring. These were law firms Harvey Ingram and its successor practice Shakespeare Martineau, accountants PKF and its successor BDO, and Eric Wardle, an accountant at PKF.
The claimants argued that the restructuring was either “ineffective”, or gave rise to exposure to capital gains or inheritance tax which was not foreseen, and would not have arisen without it.
They said they only became aware of the alleged negligence after October 2021 and so section 14A of the Limitation Act 1980 applied, extending the starting point for calculating the limitation period to the “earliest date” where they had the required knowledge and the right to bring an action.
The claim was issued in June 2023, three days inside the 15-year longstop provisions in the Act, but not served within the four months allowed.
The first claimant suffered a serious accident in 2021, which prompted her to instruct a law firm, Womble Bond Dickinson (WBD), to provide advice on her interests under family trusts.
The law firm and counsel “identified problems in the restructuring work”, but it was not until May 2023 that the claimants were informed that they may have a negligence claim.
WBD issued the claim form, but “identified that acting for the claimants put them in a position of conflict given that the firm frequently acts for insurers”. Stevens & Bolton was instructed in their place at the end of July 2023.
The application for an extension of time for service of the claim form was issued on 13 October 2023 – the last working day before the service period expired.
“The claimants’ position is that they were unable to identify the correct defendants before the expiry of the claim form, or to particularise what is a complex claim, and through no fault of their own have been hampered by the defendants in obtaining relevant documentation and were forced to change solicitors after the claim form had been issued.”
The judge accepted that the claimants became aware they may have a negligence claim “only around 16 May 2023” and it was also clear that “there was some further delay caused by the need to instruct new solicitors after WBD”.
However, there was “no indication of any sense of urgency” from the time of issue until 4 October, when a request was made of BDO and Shakespeare Martineau for documents – only seven working days before the claim form expired.
Master Brightwell said the “most obvious step to take” would have been to “write to the defendants in good time”, seeking a standstill agreement.
It was “certainly not the case” that “the only route open to a person in the position of the claimants was to apply for an order extending time for service of the claim form”, so extending its validity.
“It is clearly a relevant factor that, if limitation has expired and the court does not extend time for service of the claim form, then the claimants will lose the ability to pursue their claim.”
Master Brightwell said he was “unable to come to the view that there is a good reason for the failure to serve the claim form” and did not consider that “reasonable steps were taken” to serve it.
“The claimants neither progressed the attempt to obtain documents with any appropriate speed, nor made any attempt at all to co-operate with the defendants in seeking a way forward whilst protecting the claimants’ position.”
Dismissing the application to extend time for service, he said fault for the inability to serve “cannot be laid at the door of the defendants”.
British Solicitor move slowly last minute they speed up.