Allsop v Banner Jones Ltd (t/a Banner Jones Solicitors)

Factual and Procedural Background

The matrimonial proceedings concerned the divorce between the Plaintiff and the Appellant, who were married from 1972 until their divorce in 2016. The Appellant was a businessman who owned several motor vehicle businesses, including Company A, from which he resigned and sold his shares in early 2017 due to reasons related to the divorce. The parties separated in 2013, and negotiations regarding division of matrimonial assets and maintenance were unsuccessful, resulting in a financial remedies hearing before District Judge Buxton. The District Judge issued a Financial Remedies Judgment and a consequential Financial Remedies Order. The Appellant was dissatisfied with the judgment and sought to appeal, but permission to appeal was refused by both District Judge Buxton and a Circuit Judge.

Subsequently, the Appellant brought claims against his former solicitors, Company B, and counsel, Attorney Cohen, alleging breaches of contract and/or negligence in connection with their handling of the matrimonial proceedings. Company B and Attorney Cohen made applications to strike out the Appellant's claim on grounds including no reasonable grounds for bringing the claim, abuse of process as a collateral attack on the Financial Remedies Judgment, and for summary judgment on the basis that the claim had no real prospect of success. These applications were heard by Judge Pearce, who issued a reserved judgment allowing the applications to the extent set out therein, including striking out various allegations. The Appellant appealed the Order, raising five grounds of appeal, which were considered by the Court of Appeal.

Legal Issues Presented

1. Whether the Judge erred in applying the "Phosphate Sewage test" to determine whether the allegations constituted an abusive collateral attack on the Financial Remedies Judgment.
2. Whether the Judge erred in applying the Phosphate Sewage test to allegations concerning the preparation of the case prior to the final hearing.
3. Whether the Judge erred in finding that the claims regarding the reattribution of assets related to the Appellant's claims against Barclays had no real prospect of success and should be struck out.
4. Whether the Judge erred in striking out claims concerning the alleged "double penalty" and the rate of interest payable under the Financial Remedies Order.
5. Whether the Judge erred in striking out the claim against Attorney Cohen concerning advice on an appeal point related to the Cap Clean issue, especially given that similar allegations against Company B were not struck out.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court carefully analysed the law on collateral challenges and abuse of process, distinguishing between criminal and civil contexts. It held that the Judge erred in applying the "Phosphate Sewage test"—which requires new evidence to entirely change the aspect of the case—as a test for abuse of process in civil collateral challenges involving different parties. Instead, the proper test is whether it would be manifestly unfair to a party or would bring the administration of justice into disrepute to permit relitigation of issues decided in earlier proceedings to which the later parties were not privies.

The Court emphasised that claims against former legal advisers alleging negligence affecting the outcome of earlier civil litigation are generally not abusive collateral attacks, provided they disclose a reasonably arguable case and do not amount to re-litigating the same issues between the same parties. The Court also noted the importance of the appeal process in ensuring finality of judgments.

In applying these principles to the Appellant's claims, the Court distinguished allegations that were reasonably arguable from those that were not. It allowed the appeal in relation to the allegation that Company B failed properly to prepare the case concerning the Appellant's claims against Barclays, finding this allegation reasonably arguable and not abusive. Conversely, the Court upheld the striking out of allegations concerning the so-called "double penalty" and failure to appeal certain points, concluding these had no real prospect of success and were not breaches of duty.

The Court also found that allegations regarding the failure to argue for a commercial rate of interest instead of the default Judgment Act rate were reasonably arguable and allowed the appeal on those points. Lastly, it dismissed the appeal against striking out the claim against Attorney Cohen concerning advice on an appeal point related to the Cap Clean issue, finding no reasonably arguable case and no breach of duty.

The Court noted some allegations had not been specifically considered but indicated that the Judge's decisions to strike those out were based on no reasonably arguable case and were unaffected by the correction of the abuse of process test.

Holding and Implications

The Court's final decision was as follows:

• Grounds 1 and 2: The Court held that the Judge erred in applying the Phosphate Sewage test and replaced it with the correct abuse of process test concerning whether relitigation would be manifestly unfair or bring the administration of justice into disrepute. These grounds succeeded.
• Ground 3 (Reattribution Issue): The Court allowed the appeal in relation to the allegation that Company B failed to obtain evidence regarding the Appellant's claims against Barclays, finding the allegation reasonably arguable and not abusive.
• Ground 4 (Double Penalty and Interest Issues): The Court dismissed the appeal regarding the double penalty allegations as having no real prospect of success and upheld the striking out. However, the Court allowed the appeal concerning failure to argue for a commercial interest rate, finding this allegation reasonably arguable.
• Ground 5 (Allegation against Attorney Cohen on Cap Clean Appeal Advice): The Court dismissed the appeal, finding no reasonably arguable case and no breach of duty.
• Other allegations (A10 and A12(h)) were not specifically reconsidered but remained struck out for no reasonably arguable case.

The direct effect of this decision is to reinstate certain allegations against Company B and Attorney Cohen for further proceedings, while affirming the striking out of others. No new precedent was established beyond clarifying the proper abuse of process test applicable to collateral challenges in civil proceedings involving different parties.