CLAIM STRUCK OUT FOR INADEQUATE PLEADING: ENOUGH TO MAKE YOU HIT THE BOTTLE

I don’t normally write about the cases relating to defamation and pleading, this is a very niche area and there is usually little of general interest. However the judgment of Mr Justice Nicol in  BrewDog Plc & Anor v Frank Public Relations Ltd [2020] EWHC 1276 (QB) contains observations on the pleading of negligent misstatement and provides a reminder of the importance of full and detailed pleading in this respect.

 

THE CASE

The claimant brewing company brought an action against the defendant public relations company alleging that press release had damaged their brand. The claim was framed in both defamation and on the grounds of negligent misstatement.   The judge rejected that argument that press release was defamatory. The defendant had made an application to strike out the claim.  The judge considered the way in which the action for negligent misstatement was pleaded and struck out the entire action.

 

THE JUDGMENT

The Claim in negligent misstatement
    1. In my judgment, Mr Glen is right to say that the pleading of this cause of action is deficient.

i) It does not presently plead the facts and matters on the basis of which it is alleged that the Defendant owed the Claimants a duty of care.ii) It does not plead the ways in which it is alleged that the Defendant was in breach of its alleged duty of care i.e. the facts and matters said to constitute negligence by the Defendant.

iii) It does not plead the loss which each of the Claimants is alleged to have suffered as a result of the Defendant’s alleged negligence.

    1. In his witness statement Mr Street comments that a party is not obliged to plead issues of law (although the party may do so – see paragraph 16.4.1 in the White Book). While that is right, a party is required to plead the facts and matters on which it relies for the conclusions of law. As Mr Glen submitted, the alleged duty of care would be novel and a substantial extension of current duties of care. Whether such a duty of care is owed would ultimately be determined by the Court, but Mr Glen is correct that the Defendant is entitled to know the factual basis on which the Claimants will contend that such a duty was owed by them.
    2. I also agree that the Particulars of Claim do not currently explain how it is alleged that the Defendant was in breach of the duty of care. Mr Street says that it is self-evident. With respect to him, I do not agree. The Defendant is entitled to know precisely how the Claimants allege that it failed to exercise reasonable care. For instance. Paragraph 20(a) says that the press release was untrue. That does not tell the Defendant in what respect the press release was untrue, nor does it tell the Defendant in what manner the Defendant failed to take reasonable care to see that the press release was true.
    3. I also agree that the Particulars of Claim needed to plead what loss it is alleged that each of the Claimants suffered. At the moment, the Particulars of Claim in paragraphs 21-23 refer to losses suffered by ‘BrewDog’ which is the collective term used for both Claimants.
    4. Mr Wibberley contends that, even if I regard the Particulars of Claim as deficient, it should not have the consequence that they are struck out. Rather the Claimants should be given the opportunity to make good the deficiency by amendment. He reminds me that the power to strike out a statement of case because of a failure to comply with a rule, practice direction or order is discretionary and he submits that striking out in the present circumstances would be disproportionate. He also refers me to the decision of Tugendhat J. in Soo Kim v Young [2011] EWHC 1781 (QB).
    5. Mr Glen submits that striking out the Particulars of Claim is the appropriate order. He points out that in Soo Kim at[40] Tugendhat J. said,

‘Where the Court holds that there is a deficit in pleading, it is normal for the court to refrain from striking out the pleading unless the Court has given the party concerned an opportunity of putting right the deficit by amendment, provided that there is reason to believe he will be able to put the deficit right.‘ [Mr Glen’s emphasis].

  1. Mr Glen submits that the Defendant’s solicitors had drawn attention to the deficiencies in the proposed claim for negligent misstatement in pre-action correspondence. The points made by his solicitors had not been addressed in the Particulars of Claim. The Claimants had had notice of the strike out application since February 2020. Their response had been to defend the adequacy of the existing pleading. Even now, there was no application to amend or for the Defendant’s application to be adjourned to allow them to make such an application. Mr Glen submitted that, in these circumstances, there was no reason to believe that the Claimants could make good the deficits in their pleading. He argued that the position was comparable to that in Spencer v Barclays Bank [2009] EWHC B9 (Ch) (30th October 2009) and the right course was to strike out the claim in negligent misstatement.
  2. I have no doubt that paragraphs 19(b) and 20(b) are unsustainable. There are two reasons for that conclusion. First, there is no need for a duty of care to avoid defaming someone. Liability arises in defamation irrespective of negligence. In those circumstances, there is simply no need or value in super-adding a duty to take care not to defame someone. Secondly, as paragraph 20(b) makes clear, the alleged breach of duty pleaded in paragraph 19(b) relies on paragraphs 15 and 16 of the Particular of Claim. However, I have ruled that neither of those paragraphs is sustainable.
  3. As for the remaining claim in negligent misstatement, I consider that Mr Glen is right that the Claimants have been long been on notice that Reynolds Porter Chamberlain (the Defendant’s solicitors) considered that no adequate particulars had been given of the facts and matters which gave rise to a duty of care or as to how any such alleged duty of care was breached and that from the absence of any proposed amendments to the Particulars of Claim I should draw the inference that the Claimants would not be able to draft any, even if given the opportunity to do so. As for Mr Glen’s third complaint (the absence of pleaded financial loss for each Claimant), the position is a little different. Mr Street’s witness statement does attempt to distinguish the loss suffered by the 1st Claimant from that suffered by the 2nd Claimant. While Mr Glen may be justified in saying that these losses need further particularisation, I would not conclude that those deficiencies were incapable of being made good. This though is immaterial. The inference that I draw that the Claimants are not able to plead an arguable case of duty of care or breach of any duty of care means that in any event, the claim in negligent misstatement should be struck out.