WHEN THE WORDING OF THE CLAIM FORM COMES UNDER CLOSE SCRUTINY: SOMETHING TO REMEMBER

The precise wording of the claim form came under close scrutiny in the judgment of Mr Justice Trower in Honda Group-UK Pension Scheme Trustee Ltd & Ors v Mercer Ltd & Anor [2022] EWHC 3197 (Ch).  It is one of the rare cases where the defendants took a point in relation to the wording of the claim form, arguing that amendments could not properly take place because these were not matters set out in the claim form itself. Ultimately the judge did not accept the defendants’ submissions. However it serves as a reminder that the contents of the claim form can, on occasion, be of some significance.

“16.2

(1) The claim form must –

(a) contain a concise statement of the nature of the claim;

(b) specify the remedy which the claimant seeks;”

THE CASE

The claimants bring an action alleging breach of duty when the defendant advised in relation to certain aspects of the claimant pension funds.  The claimants issued proceedings and sought permission to amend the particulars of claim to reformulate the way in which the claims were put.  Those applications were resisted. One of the defendants’ arguments was that the claim that sought to be advanced was not set out in the original claim form.

THE JUDGMENT ON THE CLAIM FORM

The judge examined the defendants’ contentions that the wording of the claim form was important and the proposed amendments took the case outside ambit of the action set out in the claim form.

1. 1. Turning to the second ground, it is provided by CPR 16.2(1)(a) that the claim form must contain a concise statement of the nature of the claim and specify the remedy which the claimant seeks. In Libyan Investment Authority v King [2021] 1 WLR 2659 at [61] Nugee LJ said that this means that, although the details of the claim that a claimant has to include in the claim form can be brief, there is a certain minimum that every claimant has to include. He then referred with approval to Marshall v London Passenger Transport Board [1936] 3All ER 83, a decision on the equivalent rule in the RSC (Ord 6, r 2) which was still applicable under the CPR, and said:

“in that case … Romer LJ had said that the plaintiff must give the defendants some general idea of the nature of his claim, and that it was not sufficient for the plaintiff to indorse his writ merely with a claim for damages, or damages for breach of contract or negligence, but he had to give some indication of the contract said to be broken, or the duty which the defendants were said to have failed to perform. I accept therefore that a claimant does not need to put very much in the way of details in the claim form (although he can add more if he wants to), but there is a certain minimum that he needs to state.”

1. 1. In the present case, the relevant part of the claim form sought:

“Damages for losses sustained by the Scheme and/or the Employers as a result of the negligence of the Defendants as the provider of actuarial, administration, benefits consultancy, documentation and related services in respect of the Scheme, in relation to advice provided and/or omitted to be provided to the Claimants in respect of the operation of the Scheme from about 1978 to the present date, in that the defendants:

(i) failed properly to advise as to the manner in which amendments to the governing documents of the Scheme should be made and/or failed to implement amendments adequately or at all;

(ii) prepared actuarial valuations which valued the liabilities of the Scheme incorrectly; and

(iii) failed to administer the Scheme correctly in accordance with the Scheme’s governing documents.”

1. 1. The defendants submitted that the nature of the claim is therefore described as one which arises in connection with their advice as “the provider of actuarial, administration, benefits consultancy, documentation and related services in respect of the Scheme”. They point out that it makes no mention of the provision of legal services, despite that being central to the claims now advanced by the claimants and criticised the terminology of documentation and related services as being obscure. They also pointed out that there is no indication in the claim form about when any breach occurred, not least because the period from 1978 to the present date refers to the period in respect of the operation of the scheme, not the period during which the breaches are alleged to have occurred.

1. 1. The defendants also drew attention to the fact that the allegations of negligence in relation to the advice provided and/or omitted are, as a matter of language, qualified by the three breaches alleged in the numbered sub-paragraphs. They contend therefore that it is necessary for any allegation of negligence to fall within one of the three categories of pleaded failure in order for the nature of the claim to have been sufficiently identified. They point to the fact that paragraphs (ii) and (iii) include a reference to conduct which is not the subject of criticism in these proceedings, and reflects the illegitimately non-specific nature of the claims then made. They also submitted that there is nothing in the claim form which identifies which amendments and which governing documents are the subject matter of the claim.

1. 1. Fundamentally, it was said by the defendants that what is set out in the claim form is both abusive in its generality and inadequate as a description of the claim now made. The defendants’ case, as set out in [12(d)] of their Defence, is that the claim form does not allege any duty to “warn” about alleged “inadequacies, deficiencies and/or uncertainties in documentation” and/or “work carried out in relation to the Scheme by … [the defendants]“. The defendants contend that the claim form only alleges that they were negligent “as the provider of…. documentation and related services” in that they “failed to advise as to the manner in which amendments to the governing documents of the Scheme should be made and/or failed to implement amendments adequately or at all”.

1. 1. It is said that this description of the nature of their case encompasses (a) failures to advise as to the manner in which new amendments should be made and (b) failures to implement new amendments (which is concerned with a prospective question). It is the defendants’ case that the wording only encompasses failures to advise as to how new amendments should be made (for example as regards documentary formalities and other requirements for exercising the amendment power) and that the wording does not encompass failures to warn (retrospectively) about how historic amendments should have been made or historic advice should have been given in the past. It is said that these are all very serious deficiencies because they demonstrate that the precise nature of the claim now made was not properly articulated at the time the proceedings were commenced. This has important consequences for limitation purposes.

1. 1. The claimants criticised the unmeritorious nature of this part of the application, based on the fact that the defendants can have been in no doubt as to the true nature of the claims made against them. They said that that the defendants would not have been so active in attempting to mitigate their potential liability through their participation in the construction and rectification claims if they had not appreciated the true nature of the current proceedings. This is relevant in the sense that this is not a case in which the defendants can contend that they were taken by surprise when the particulars of claim were served, but is only of limited relevance to the question of whether the claims made in the particulars of claim fall within the scope of the claim form. It may have more relevance to the question of the relief the court should grant if they do not.

1. 1. As to the substantive point, the claimants submitted that the defendants’ arguments ignore the principle that claim forms are concerned with the nature of the claim and are not required to set out causes of action. Thus, where it is said that proposed amendments to particulars of claim should not be allowed under CPR 17.4 on the basis that they give rise to new claims outside the limitation period, the only issue for the court is to compare the original particulars of claim with the proposed amendments. The fact that the claim form is wider than the original particulars of claim is neither here nor there, because a claim form is not required to plead any cause of action (Chandra v Brooke North [2013] EWCA Civ 1559 at [79] to [86] applying Steamship Mutual Underwriting Association Ltd v Trollope and Colls (City) Ltd (1986) 33 BLR 77, 97).

1. 1. Dealing first with the argument that the claim form does not refer to the provision of legal services, the claimants submitted that the breaches of duty alleged in the particulars of claim fall within the concept of documentation and related services. As a concept this extends to legal services in a limited drafting or documentation related sense. Mr Newman submitted this was actually the right way of describing the nature of the services being provided because it was not the claimants’ case that they relied on a free standing legal duty to advise on matters relating to the Scheme that arose independently of the drafting of its governing documentation. He also explained that the claimants have sought to make this clear in part of their application to amend their particulars of claim by a deletion of paragraphs 8 and 34, which was said by the defendants to give rise to an impermissible extension of their duty of care.

1. 1. The claimants accepted that none of this means that the claim does not involve allegations as to errors of law. But they said that the crucial point is that the errors were made in the provision of documentation and related services because the working-out of what the prior amendments were or ought to have been was a necessary step in the preparation of the consolidating deed. Put another way, it is said that whilst the breaches relied on in these proceedings relate to legal issues, those legal issues arise out of the provision by the defendants of documentation and related services.

1. 1. In my judgment the claimants are right on this point. I consider that documentation and related services is wide enough as a concept to cover the services in respect of which the current allegations of negligence against the defendants are made. I think that this conclusion is consistent with the terms of section 7 of the retainer agreement which I described earlier in this judgment and is part of the context in which the claim form is to be construed. The documentation services there described extended to dealing with legal issues arising in the context of the provision of those services but were not described in a manner that separated the legal element of the work done on documents from the documentation services more generally. While the inclusion of the adjective ‘legal’ would have put the position beyond doubt, I am satisfied that the true construction of the current version of the claim form extends to the services in respect of which the claimants make complaint against the defendants.

1. 1. The next issue is the defendants’ submission that the claim form refers only to a failure to advise as to how new amendments should be made and does not encompass failures about how historic amendments should have been made.

1. 1. The claimants initially understood the defendants’ argument to be that the claim form only related to those parts of the 1998 Deed which were intended to introduce new changes to the Scheme, rather than those which were intended to replicate existing terms of the Scheme. They submitted that this argument would have ignored the fact that the purpose of the consolidating deed was not to amend the Scheme so that its terms were different to those which already existed. Its purpose was to produce a single document which incorporated both the terms of the 1981 DDR and the various amendments which have been made to the Scheme since that deed was first executed. It therefore follows that, when the concept of amendment to the governing documents of the Scheme is used (the phraseology used in the claim form), it is apposite to cover both changes to the terms of the Scheme itself and changes to the wording of the Scheme’s governing document to reflect changes to terms of the Scheme which had already been made by reason of prior amendments.

1. 1. If this had been the argument, I would have agreed with the claimants’ submission on this point. When this well-understood concept of ‘amendment’ in the context of a consolidation exercise is properly understood, the amendments which should be made to the consolidating deed include not only new changes to the terms of the Scheme, but also changes to the wording of the Scheme’s governing documents, which do not create new terms but which reflect changes to the terms which had already been made. This is consistent with the claim form’s explicit reference to amendments to the governing documents of the Scheme rather than amendments to the existing terms of the Scheme. This reference encompasses a failure to advise on the wording which should have been incorporated in the 1998 Deed to reflect changes which had already been made – such as the purported introduction of the HUM benefit structure in 1986. The failure relates to the draft 1998 Deed so as to reflect the non-incorporation of the HUM benefit structure in 1986. It involves a change to the governing documents (i.e. the new consolidating deed and rules) which should be made, not a change which should have been made.

1. 1. I have explained how the defendants’ argument initially appeared to be being run, because it throws some light on the ultimate answer, but in fact it transpired that the true nature of the defendants’ criticism of the claim form on this point was slightly different. It was that, because there was no defect in the drafting of the 1998 Deed (it adequately implemented the HUM benefit structure), the claim could not be related to the drafting of the 1998 Deed. Therefore, it was said that the claim could only be based on a free-standing legal duty (arising independently of the drafting process) to advise the claimants about the earlier failure to incorporate the HUM benefit structure. This was not a claim that was covered by the wording of the claim form.

1. 1. Mr Newman submitted that this criticism was misconceived. He said that the drafting of the 1998 Deed did not take account of the fact that, in the absence of any earlier valid implementation of the HUM benefit structure into the governing documentation of the Scheme, the 1998 Deed itself could not validly apply that structure to the HUM members’ benefits for the entirety of their pension accrual from the time when HUM commenced participation in the Scheme. To do so would have infringed the proviso preventing exercise of the amendment power so as to interfere with accrued rights. The error, therefore, was a failure to limit the application of the HUM benefit structure to pensionable service after the effective date of the 1998 Deed.

1. 1. Mr Newman submitted that this error was a classic example of negligence in the steps taken by the defendants to ensure the legal efficacy of the 1998 Deed in accordance with its terms as at the end of the drafting process. It was one which plainly arose out of the drafting of the 1998 Deed and, importantly, was an error in the form of a failure to implement amendments to the governing documents of the Scheme adequately. If the work had been done adequately, the 1998 Deed (as a consolidating deed) would have identified a distinction between the validity of the HUM benefits structure as it applied to HUM members’ benefits going forward and the invalidity of the application of the HUM benefits structure to accruals prior to the effective date of the 1998 Deed.

1. 1. I agree with the claimants’ case on this part of the argument. In my view the argument that a reasonably competent draftsman should have taken reasonable steps to ensure that the terms of the 1998 Deed were comprehensive on this point and to the extent that he did not do so he was negligent, is correct. It follows that I agree that the defendants’ criticism of the claimants’ case on this point is based on a misconception. The mere fact that the defendants included the HUM benefit structure in the drafting of the 1998 Deed does not answer the criticism that is made of their conduct by the claimants. There may have been other ways of formulating the claimants’ underlying criticisms of the defendants’ conduct, but the fact that the drafting did not distinguish between the accruals in respect of which the implementation of the HUM benefit structure were and were not effective meant that the implementation of the amendments was inadequate.

1. 1. This was arguably the case as a result of the defendants’ negligence, and if they had not been negligent there was a realistic prospect that the 1986 HUM benefits error would have been identified in sufficient time to enable them to make a claim against NLP which only became time barred in 2001. In its essence, this is a claim for damages for loss of the chance to recover against NLP. It is also pleaded that the claimants lost the chance to seek relief under the rule in Re Hastings Bass to avoid the additional liabilities altogether by setting aside the Deed of Adherence, a claim which the claimants say would, if available, have been easier to pursue than the rectification claim which was brought but failed.

1. 1. The next issue relates to the defendants’ complaint that the claim form only refers to a failure properly to advise as to the manner in which the amendments were made. It was submitted that this language did not extend to drafting the content of the 1998 Deed, but was limited to the mechanics by which any drafting amendments were to be implemented. I disagree. I also think that the claimants were correct to submit that “the manner in which” amendments to the governing documents to the Scheme should be made covers the terms in which any amendments to the new consolidating governing deed and rules were drafted. Changing the contents of a relevant deed such as the 1981 DDR is part of the manner in which the documents governing the terms of the Scheme (a generic rather than a specific description) are amended. This is more particularly the case when read in conjunction with the succeeding words “and/or failed to implement amendments adequately or at all”.

1. 1. The defendants also submitted that there is no reference in the claim form to the actionable loss being the loss of a chance to make a claim against NLP. I agree with the claimants that there is a short answer to this point. The claim form in the present case identifies that damages are claimed and also that they are said to result from the negligence of the defendants in a number of material respects. The statement of the nature of the claim for the purposes of CPR 16.2(1) is required to be concise. It does not require a particularisation of the quantum of the damages or the methodology by which they are to be computed.

1. 1. For similar reasons I do not think that the defendants are correct to submit that the claimants were required to identify in the claim form the precise date of each of the breaches on which they base their claim. The most recent authority to which Mr Newman drew my attention was the decision of Eyre J in USAF Nominee No 18 Limited v Watkin Jones Ltd [2021] EWHC 3173 (TCC). Eyre J’s judgment was concerned with an application to strike out the claim form in proceedings against a design and build contractor for damages caused as a result of fire safety and other defects on two separate bases. The first, which is not in issue in the present case, is that there had been an abuse of process (based on Cooke J’s judgment in Nomura International Plc v Granada Group Ltd [2007] EWHC 642 (Comm)) because there was no present intention to prosecute the claim. The second was that the provisions of CPR 16.2 had not been complied with.

1. 1. It is clear from the claim form in USAF that it did not include any reference to the dates on which the breaches of duty alleged against the defendants were said to have been committed. Notwithstanding this omission, Eyre J concluded at paragraph 61 that, construed in the context of the surrounding circumstances including the correspondence to which he had referred earlier in his judgment, the claim form was adequate (albeit as he put it “only by the skin of its teeth”). He also said that, even if it had not been, in the absence of a Nomura abuse, which he concluded had not been established, it would be an irregularity of the kind that could be cured by amendment if necessary and would not be such as to warrant the striking out of the claim.

1. 1. Mr Newman also drew my attention to Tetra Pak Ltd v Biddle & Co [2010] 1 WLR 1466, a case in which the employers and trustees of an occupational pension scheme sued a firm of solicitors and a firm retained to provide actuarial and consultancy services. The claim related to what was alleged to be a failure to advise adequately and draft effective documentation in relation to the equalisation of members’ retirement ages. In that case the details of claim on the claim form did not identify the dates of the breach save that the omissions in issue were said to have occurred from the time after the date at which they were instructed. I do not gain a great deal of assistance from Tetra Pak because the form of the claim form was not the subject matter of Warren J’s judgment. But Mr Newman is entitled to submit

      that the nature of the matters with which Warren J dealt in his judgment indicated that, if anybody had thought that there was a problem with a claim form drafted in that way, it seems probable that the point would have been taken.

1. While there are aspects of the claim form in the present case which were not very happily drafted, I have reached the conclusion that the defendants are wrong to contend that it does not comply with CPR 16.2. In my judgment it sufficiently identifies the nature of the claim. Even if it had not done so, this would not have been a case for striking out the proceedings, because there is not and could not be an allegation that the claim form was issued in circumstances where there was no present intention to prosecute the claim such that issue was an abuse of process. Subject to questions arising under CPR 17.4, and consistently with the conclusion reached by Eyre J in USAF, any such deficiency is likely to be curable by amendment.