AMENDING PLEADINGS : A REVIEW OF THE PRINCIPLES: WHAT IS MEANT BY "LATE"?
We have looked at the case of CIP Properties -v- Galliford Try twice before in the context of costs budgeting. The case came before Mr Justice Coulson again [2015] EWHC 1345 (TCC) on the topic of amendment of pleadings. It is unlikely that there will be a clearer exposition of the rules relating to amendments and knowledge of this case is essential.
THE CASE
The action is a major piece of litigation relating to the development of the Broadway Plaza in Birmingham. The matter is listed for trial in January 2016. On the 20th and 30th April 2015 the claimant made an application to make “voluminous” amendments to its pleadings. Agreement was reached in relation to some of the proposed amendments.
KEY POINTS
- Lateness is a relative concept.
- An amendment is “very late” if if threatens the trial date.
- There must be a good reason for the delay.
- The clarity and particularity of the proposed amendment is an important factor.
- The prejudice is important.
- A need to change the trial date may be an overwhelming reason to refuse an amendment.
- Prejudice to the proposed amending party is unlikely to be important if that prejudice has come about by that party’s own conduct.
THE LAW
The judge reviewed the principles relating to late amendment in detail.
“3. THE LAW
14. I was provided with a lever arch file which contained 20 authorities relating to amendments. A large number of those cases were referred to during the oral hearing. It is, I think, unnecessary for me to set out large chunks of the judgments in those cases. Instead I will cut to the chase and summarise the principles which are now applied in The Rolls Building to disputed applications to amend.
15. In my view, the traditional approach outlined by Peter Gibson LJ in Cobbold v Greenwich LBC (1999 unreported), to the effect that “[a]mendments in general ought to be allowed so that the real dispute between the parties can be adjudicated upon provided that any prejudice to the other party or parties caused by the amendment can be compensated for in costs…” is no longer the right starting point. Indeed it is arguable that it never was: in the earlier Court of Appeal decision of Worldwide Corporation Ltd v GPT Ltd and another [1998] WL 1120764, Waller LJ stressed that a payment in costs was not adequate compensation for the other party being ‘mucked around’ at the last moment. Subsequently, in Savings and Investment Bank Ltd (in liquidation) v Fincken [2003] EWCA Civ. 1630; [2004] 1 WLR 667, Rix LJ noted that Worldwide was authority for the proposition that “the older view that amendments should be allowed as of right if they could be compensated in costs without injustice had made way for a view which paid greater regard to all the circumstances which are now summed up in the overriding objective.”
16. The subsequent decision of the Court of Appeal in Swain-Mason and Others v Mills and Reeve LLP [2011] EWCA Civ. 14; [2011] 1 WLR 2735 also stressed that, when dealing with very late amendments, the court should be less ready than in former times to grant a late application to amend. Moreover, Lloyd LJ said that, when considering the competing arguments of prejudice, the prejudice to the amending party in not being able to advance its amended case was a relevant factor, but was only one of the factors to be taken into account in reaching a conclusion. It was also stressed that a late amendment cannot be insufficient or deficient. And at paragraph 72 of his judgment, Lloyd LJ said: “…a heavy onus lies on a party seeking to make a very late amendment to justify it, as regards his own position, that of the other parties to the litigation, and that of other litigants in other cases before the court.”
17. In Andrew Brown and Others v Innovatorone PLC and Others [2011] EWHC 3221 (Comm), Hamblen J said that parties had a legitimate expectation that trial dates would be met and they would not be put back or delayed without good reason. At paragraph 14 of his judgment, the judge set out some of the likely factors that would be involved in striking a fair balance. They were: “(1) the history as regards the amendment and the explanation as to why it is being made late; (2) the prejudice which will be caused to the applicant if the amendment is refused; (3) the prejudice which will be caused to the resisting party if the amendment is allowed; (4) whether the text of the amendment is satisfactory in terms of clarity and particularity.”
18. As part of the Jackson reforms to the CPR, the overriding objective, which is the starting-point for any consideration by the court of late amendments, was amended. It now expressly provides that the court must deal with cases “justly and at proportionate cost”. Proportionality is vital, not only to this application, but to the vast majority of applications to amend late. For those reasons, I pay particular attention to four more recent cases concerned with amendments, the majority of which post-date this change to the overriding objective. They are:
(a) Archlane Ltd v Johnson Controls Ltd [2012] EWHC B12 (TCC), in which Edwards-Stuart J said that “to the extent that the First Defendant will suffer prejudice by the refusal of this amendment, which I accept is a clear possibility, it seems to me clear also that it is very substantially the author of that prejudice”.
(b) Hague Plant Ltd v Hague and Others [2014] EWCA Civ. 1609, in which Briggs LJ said: “
32. In that succinct passage the judge clearly distinguished between the “very late” amendment cases such as SwainMason where the risk to a trial date may mean that the lateness of the application to amend will of itself cause the balance to be heavily loaded against the grant of permission, and “late” amendments in which the consequence of the large scale reformulation of the Particulars of Claim, after the completion of Defences and Part 18 exchanges, will risk undermining work already done on response to the original Particulars of Claim, and causing a duplication of cost and effort. It is evident, for example from paragraph 60 and 61, and elsewhere in the judgment, that it was this aspect of lateness, namely the consequence that, if permitted, the amendments would cause existing work to be wasted and substantial further work and expense incurred, that weighed in the judge’s mind.
33. I consider that the judge was entitled to approach the relevance of lateness in this way. Lateness is not an absolute but a relative concept. As Mr. Randall put it, a tightly focussed, properly explained and fully particularised short amendment in August may not be too late, whereas a lengthy, ill-defined, unfocussed and unexplained amendment proffered in the previous March may be too late. It all depends upon a careful review of the nature of the proposed amendment, the quality of the explanation for its timing, and a fair appreciation of its consequences in terms of work wasted and consequential work to be done.”
The court upheld the decision of the first instance judge, HHJ Behrens, to refuse the amendments.
(c) Bourke and another v Favre and another [2015] EWHC 277 (Ch) in which Nugee J refused the amendments some months before trial because of the ‘significant pressure’ that having to deal with the new claim would put on the defendants, whilst there was no corresponding pressure on the claimants because they had already prepared their evidence with this new claim in mind. In that case, a second action was considered inevitable, and Nugee J indicated that such fresh proceedings would not be caught by the rule in Henderson v Henderson.
(d) Wani LLP v Royal Bank of Scotland PLC and another [2015] EWHC 1181 (Ch) in which Henderson J refused amendments which neither side said necessitated the adjournment of the trial if they were allowed. He rejected the suggestion that it made a difference that the application was being made two months before the trial, citing the passage in Hague Plant referred to above. He also applied the approach in Brown, although he dealt with the four points in a slightly different sequence. As to lateness, he found that the amendments could have been made much earlier than they were, and they lacked proper clarity and particularity.
19. In summary, therefore, I consider that the right approach to amendments is as follows:
(a) The lateness by which an amendment is produced is a relative concept (Hague Plant). An amendment is late if it could have been advanced earlier, or involves the duplication of cost and effort, or if it requires the resisting party to revisit any of the significant steps in the litigation (such as disclosure or the provision of witness statements and expert’s reports) which have been completed by the time of the amendment.
(b) An amendment can be regarded as ‘very late’ if permission to amend threatens the trial date (Swain-Mason), even if the application is made some months before the trial is due to start. Parties have a legitimate expectation that trial dates will be met and not adjourned without good reason (Brown).
(c) The history of the amendment, together with an explanation for its lateness, is a matter for the amending party and is an important factor in the necessary balancing exercise (Brown; Wani). In essence, there must be a good reason for the delay (Brown).
(d) The particularity and/or clarity of the proposed amendment then has to be considered, because different considerations may well apply to amendments which are not tightly-drawn or focused (Swain Mason; Hague Plant; Wani).
(e) The prejudice to the resisting parties if the amendments are allowed will incorporate, at one end of the spectrum, the simple fact of being ‘mucked around’ (Worldwide), to the disruption of and additional pressure on their lawyers in the run-up to trial (Bourke), and the duplication of cost and effort (Hague Plant) at the other. If allowing the amendments would necessitate the adjournment of the trial, that may be an overwhelming reason to refuse the amendments (Swain Mason).
(f) Prejudice to the amending party if the amendments are not allowed will, obviously, include its inability to advance its amended case, but that is just one factor to be considered (Swain-Mason). Moreover, if that prejudice has come about by the amending party’s own conduct, then it is a much less important element of the balancing exercise (Archlane).
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On amendment