Late Amendments To Statements Of Case: Helpful Guidance From The Court Of Appeal

• Published date: 07 June 2023
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation, Professional Negligence
• Law Firm: Herbert Smith Freehills
• Author: Ms Maura McIntosh and Caroline Tuckwell

A recent Court of Appeal decision clarifies how the court should exercise its discretion in considering an application to amend that is brought late, but not very late in the sense that the amendment would cause loss of the trial date: CNM Estates (Tolworth Tower) Ltd v Carvill-Biggs [2023] EWCA Civ 480.

The decision emphasises that, so long as the proposed amended case has a real prospect of success, the perceived strength or weakness of the case should not be taken into account in balancing the respective interests of the applicant and other parties and litigants more generally. The court should not conduct a mini-trial. In practice, however, it may not always be clear to a court whether a claim has overcome the "real prospect of success" hurdle, as illustrated by the dissenting judgment in this case.

The Court of Appeal also had to consider whether the claimant was in breach of an "unless order" and therefore required relief from sanctions to proceed with its case. The decision illustrates the importance of precise drafting in a court order, and particularly an unless order, to ensure that it is clear whether a party has failed to comply with it.

Background

CNM Estates Limited ("CNM") acquired a property for development in 2015 with the support of a loan of '54 million. In 2017 it defaulted on the loan and receivers were appointed. CNM subsequently brought proceedings against both the lender and the receivers but the claim against the lender was settled.

CNM alleged that the receivers breached their duty to exercise proper skill and care to obtain the best price reasonably obtainable on the sale of the property. In June 2020, the court tried a preliminary issue, and held that the receivers would only be liable for breach of their duty of care where the liability in question was directly caused by their gross negligence or wilful misconduct. It would therefore be necessary for CNM to amend its claim to include these causes of action if it was to have any prospect of succeeding.

CMN took no immediate steps to amend its case. In November 2021, it agreed with the receivers the terms of an unless order (the "Unless Order") to the effect that it would serve amended particulars of claim by 14 January 2022, failing which its claim would be struck out. CNM served a draft amended claim on that day but it only contained a claim for wilful misconduct, not gross negligence. It did not at that stage make a formal application to amend.

In May 2022, CNM applied to...