Alliance & Leicester plc has succeeded in reinstating a High Court claim against a solicitor after it was struck out by Deputy High Court Judge Anthony Thompson QC in March 1998 for delay in prosecution.
The case was one of eight actions brought by the bank in 1995 against Colin Lewis, claiming damages for breach of solicitor’s retainer over secured loans it made in 1988/9 to self-build housing associations for the purchase and development of sites for residential use.
A&L claimed that Lewis, who was the solicitor for the associations and for the bank, failed to report a reduction in the purchase price of the site.
In the Court of Appeal counsel for the bank, Lawrence Cohen QC, argued that the judge had been wrong in ruling that the bank’s delay would prejudice Lewis, and in finding that there was a substantial risk of an unfair trial.
But counsel for Lewis, John Martin QC, said that the bank had issued the proceedings just 12 days short of the expiry of the six-year limitation period and that there had been no more activity between the parties until some 18 months later. The impairment of witnesses’ memories and the loss of relevant documentation would, he said, cause considerable prejudice in defending the case.
Allowing the appeal, Nourse LJ said that he was not satisfied that Lewis would be prejudiced to an extent that merited the case being struck out and ordered the action to be reinstated.
However, he said that doing so gave him no satisfaction as there had been serious delays prior to the issue of the proceedings and further delays afterwards.
He added that, under the new system envisaged for the management of court cases, what had happened in the present case would almost certainly be enough to strike out the action without the need to prove prejudice. But he said the courts were in the “straitjacket” of the present rules of court, which required the establishment of prejudice before proceedings could be struck out.
Alliance & Leicester plc v Lewis, Court of Appeal (Nourse and Thorpe LJJ), 9 February 1999
Lawrence Cohen QC and Christopher Russell (instructed by Berwin Leighton) appeared for the appellant; John Martin QC and Jonathan Evans (instructed by Wansbroughs Willey Hargrave) appeared for the respondent.
PLS News 10/2/99
