Factual and Procedural Background
Three applications are before the Court: (i) the Defendant's application dated 28th April 2014 seeking to strike out claims for breach of contract, negligence, and misfeasance in public office or alternatively summary judgment or striking out paragraphs protected by Legal Professional Privilege ("LPP"); (ii) the Claimants' application dated 14th April 2015 seeking specific disclosure of documents said to be subject to LPP; and (iii) the Claimants' request for permission to serve a Reply to the Defence. The Court considered the Defendant's application first as it predates the Claimants' applications and the latter depend on the claim surviving the Defendant's challenge.
The Claimants, four serving police officers (except one retired), were involved in the arrest of a terrorist suspect ("BA") in December 2003. BA alleged serious assault during the arrest. Disciplinary charges against the Claimants were dismissed in April 2005. BA issued civil proceedings against the Defendant (the Commissioner) in June 2007, alleging vicarious liability for the Claimants' torts. The Claimants were not separately sued and the Defendant did not seek indemnity from them.
In March 2008, the Claimants attended a conference with junior counsel and were advised that BA's claims would be vigorously defended, that special measures to protect their identity might exempt them from giving evidence, and that the Defendant's legal team also acted for and protected the Claimants' interests. However, in February 2009, the Defendant's application for special measures was rejected, and shortly thereafter the Defendant sought to settle BA's claim. The Claimants expressed concerns and were told in March 2009 that the Defendant's legal team no longer represented their interests. BA's claim was settled on 18th March 2009 with an admission of liability and apology for gratuitous violence. The Commissioner issued a press release which the Claimants contend amounted to endorsing their culpability. The Claimants were criminally charged in August 2010 but acquitted in May 2011.
The Claimants allege that a contractual retainer existed between themselves and the Defendant's legal team, based on assurances given at the March 2008 conference, which included the legal team defending the allegations, protecting the Claimants' interests, and consulting them if a conflict arose or settlement was contemplated. They assert that the Defendant owed them a duty of care in tort and contract as quasi-employer to safeguard their safety, welfare, and reputational interests, particularly in the preparation, conduct, and settlement of BA's civil claim. They claim breaches including failure to conduct a competent defence, failure to keep them informed, failure to warn about settlement intentions, and failure to explain withdrawal of legal representation.
The Claimants also plead a cause of action in misfeasance in public office based on the Defendant's alleged reckless failure to disclose evidence ("the probe") before settlement, which they contend would have altered the outcome of the civil claim. The particulars of claim include claims for reputational and economic loss, personal injury including psychiatric damage, and other consequential losses.
The Defendant applies to strike out the claims or alternatively for summary judgment, arguing that no contract of retainer existed between the Claimants and the Defendant's legal team, that the duty of care claimed is not established, and that the misfeasance claim is inadequately pleaded.
Legal Issues Presented
- Whether the Claimants had a contractual retainer or joint retainer with the Defendant's legal team, creating a duty of care owed to them.
- Whether the Defendant owed the Claimants a duty of care in negligence simpliciter or under a voluntary assumption of responsibility in respect of the conduct and settlement of BA's civil claim.
- Whether the Claimants can establish a claim for psychiatric injury and consequential losses arising from the Defendant's alleged breaches.
- Whether the Claimants have sufficiently pleaded a cause of action in misfeasance in public office against the Defendant.
- Whether the Defendant's applications to strike out or for summary judgment should be granted under CPR 3.4(2)(a) and CPR 24.
Arguments of the Parties
Defendant's Arguments
- No contractually binding retainer existed between the Claimants and the Defendant's legal team; assurances given by counsel could not create such a retainer.
- The Claimants were not parties to BA's civil claim and did not sign any retainer authorising the Directorate of Legal Services ("DLS") to act for them.
- The Defendant's standard operating procedures require a signed retainer for separate representation, which was absent here.
- The duty of care claimed would conflict with the primary duty owed by the Defendant's lawyers to the Defendant; the Defendant was entitled to settle the claim in its own interests.
- Legal Professional Privilege (LPP) is a policy reason against imposing a duty of care in these circumstances.
- The Claimants failed to plead reliance necessary for voluntary assumption of responsibility.
- The misfeasance claim is inadequately pleaded, lacking essential elements such as subjective bad faith.
Claimants' Arguments
- A joint retainer or joint interest existed as the parties retained and shared the same legal team until March 2009, negating LPP between them.
- The Defendant owed a duty of care to the Claimants as quasi-employer, including duties to prepare and conduct the defence properly, to inform them of conflicts, and not to settle without reasonable grounds.
- The Claimants relied on assurances given at the March 2008 conference that their interests would be protected and the claim vigorously defended.
- Psychiatric injury and consequential losses were foreseeable due to the direct impact on their reputations and the personal threats they faced.
- The Claimants should be allowed to perfect their misfeasance pleadings after disclosure.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Caparo Industries plc v Dickman [1990] 2 AC 605 |
Tripartite test for duty of care: foreseeability, proximity, and whether it is fair, just and reasonable to impose a duty. |
Applied to assess whether the Defendant owed a duty of care to the Claimants; key focus on the third limb (fairness, justice, reasonableness). |
| Waters v Metropolitan Police Commissioner [2000] 1 WLR 1607 |
High threshold for strike-out applications, especially where law is developing. |
Referenced to emphasize caution in striking out claims at an early stage. |
| Barrett v Enfield LBC [2001] 2 AC 550 |
Principles governing duty of care and strike-out threshold. |
Used to support procedural standards and approach to duty of care analysis. |
| Hughes v Colin Richards [2004] PNLR 35 |
Application of summary judgment principles and strike-out tests. |
Referenced for procedural standards. |
| Three Rivers DC v Company of the Bank of England (No 3) (2001) 2 AER 513 |
Standard for summary judgment requiring a real prospect of success. |
Applied to determine whether the Claimants had a realistic chance of success. |
| ED&F Man Liquid Products Ltd v Patel [2003] EWCA Civ 472 |
Summary judgment principles. |
Referenced for procedural standards on summary judgment. |
| White v Jones [1995] 2 AC 207 |
Lawyers owe duty of care to clients, not third parties. |
Applied to reject duty of care owed by Defendant's lawyers to Claimants who were not clients. |
| Pacific Associates Inc v Baxter [1990] 1 QB 993 |
Conflicting duties and limitations on duty of care. |
Supported the conclusion that imposing concurrent duties would be unfair and unreasonable. |
| D v East Berkshire NHS Trust [2005] 2 AC 373 |
Limits on imposing duty of care in complex relationships. |
Supported the Court’s reasoning on the absence of duty in this case. |
| Leach v Chief Constable of Gloucestershire [1999] 1 WLR 1421 |
Foreseeability of psychiatric injury and assumption of responsibility. |
Considered in relation to foreseeability of psychiatric harm claims. |
| McLoughlin v Jones [2002] QB 1312 |
Foreseeability of psychiatric injury from negligent conduct of litigation. |
Distinguished on facts; no direct engagement between Defendant and Claimants here. |
| Yapp v Foreign and Commonwealth Office [2014] EWCA Civ 1512 |
Foreseeability and remoteness in psychiatric injury claims. |
Applied to assess foreseeability of psychiatric injury; found insufficient here. |
| French v Chief Constable of Sussex Police [2008] EWCA Civ 312 |
Limits to employer’s duty of care for psychiatric injury arising from systemic failures. |
Considered relevant to foreseeability and scope of duty; supported striking out claims. |
| Michael v Chief Constable of South Wales Police [2015] 2 WLR 343 |
Analysis of third limb of Caparo test. |
Rejected Claimants' submission that third limb no longer applies; upheld its continued relevance. |
| Customs & Excise Commissioners v Barclays Bank plc [2007] 1 AC 181 |
Requirement of reliance in Hedley Byrne claims. |
Applied to reject claim for voluntary assumption of responsibility due to absence of reliance. |
| Williams v Natural Life Health Foods Ltd [1998] 1 WLR 830 |
Objective test for reliance in assumption of responsibility. |
Referenced in assessing Claimants' alleged reliance on Defendant. |
| Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 |
Extension of Hedley Byrne principle beyond advice to negligent performance of services. |
Considered but found inapplicable due to absence of retainer or entrusted affairs. |
| Calveley v Chief Constable of Merseyside Police [1989] AC 1228 |
Requirement of subjective bad faith in misfeasance in public office. |
Applied to find Claimants failed to plead essential elements of misfeasance claim. |
| Three Rivers DC v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1 |
Elements of misfeasance in public office. |
Referenced to emphasize pleading requirements for misfeasance claim. |
Court's Reasoning and Analysis
The Court first addressed the alleged retainer issue, concluding that no express or implied contractual retainer existed between the Defendant's legal team and the Claimants. The Claimants were not parties to BA's civil claim, did not sign a retainer, and attended conferences as witnesses rather than clients. The Defendant's standard operating procedures require a signed retainer for separate representation, which was absent. The Court rejected attempts to infer a joint retainer or joint interest as conflating distinct legal concepts, particularly confusing Legal Professional Privilege issues with contractual retainer issues.
Turning to the negligence claim, the Court applied the Caparo tripartite test. It found that while proximity existed due to the quasi-employment relationship, it was not fair, just, or reasonable to impose a duty of care on the Defendant to protect the Claimants' interests in the conduct and settlement of BA's civil claim. The Defendant's lawyers owed duties solely to the Defendant, and the Defendant was entitled to settle the claim in its own interests. Imposing such a duty would conflict with the Defendant's primary interests, potentially require waiver of privilege, and unduly restrict the Defendant's freedom to manage litigation.
The Court considered the foreseeability of psychiatric injury, acknowledging the Claimants' involvement and stress but found the claim unpromising. Drawing on authorities including French and Yapp, the Court held that the circumstances were insufficiently egregious to render psychiatric injury reasonably foreseeable. No signs of special vulnerability were pleaded. The Court also found no real prospect that the Claimants could establish reliance necessary for a voluntary assumption of responsibility claim, given the absence of a retainer or entrustment of affairs.
Regarding the misfeasance in public office claim, the Court noted the Claimants' pleadings were inadequately constituted, lacking essential elements such as subjective bad faith by a public officer. No exceptional circumstances justified adjourning the Defendant's application pending disclosure, and no promising cause of action was demonstrated.
Accordingly, the Court granted the Defendant's applications to strike out the claims and for summary judgment, concluding there was no realistic prospect of success on any pleaded cause of action.
Holding and Implications
The Court's final decision is to accede to the Defendant's applications under CPR r.3.4(2)(a) and r.24(a)(i) and (b) and to enter judgment for the Defendant against the Claimants.
This decision results in the dismissal of the Claimants' claims for breach of contract, negligence, and misfeasance in public office. The Court found no sufficient factual or legal basis to impose a duty of care on the Defendant towards the Claimants in the context of the underlying civil litigation, nor to recognize a contractual retainer or voluntary assumption of responsibility. The claims for psychiatric injury and consequential losses were held to lack reasonable foreseeability and sufficient pleading. The misfeasance claim was inadequately pleaded and not saved by pending disclosure.
No new legal precedent was established; the ruling is strictly based on the application of established principles to the facts pleaded in this case. The direct effect is the termination of the Claimants' claims at this preliminary stage.