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Blower v GH Canfield LLP
Anonymised Summary of the Opinion
Factual and Procedural Background
The Appellant brought a professional negligence claim against Company A arising from a global settlement reached at a mediation on 9 December 2015. The settlement resolved a bundle of claims pursued by the trustee in bankruptcy, Attorney Allen, against members of the Appellant's family following the bankruptcy of the Appellant's Husband. Company A had acted for multiple family members during the period leading to the mediation. The Appellant alleged that Company A negligently failed to identify and manage conflicts of interest and failed to advise properly, causing the Appellant and her daughter to agree to the settlement and suffer loss.
The claim was dismissed by Judge Matthews on 14 November 2024 on the grounds that Company A was not negligent and, alternatively, that causation and loss were not adequately pleaded and there was no coherent claim for loss. Permission to appeal was granted on two grounds by Judge Zacaroli on 6 February 2025. The appeal was heard by Judge Asplin (giving the lead judgment), with concurring judgments from Judge Coulson and Judge King.
Legal Issues Presented
- Whether the judge below erred in failing to consider or apply the law and the applicable regulatory standard on conflicts of interest in the context of Company A's alleged negligence.
- Whether the judge erred in finding that, even if Company A had been negligent, the Appellant had failed to plead a coherent case on causation and loss, and whether, despite any pleading deficiencies, the court should nonetheless have considered causation because it was just to do so.
Arguments of the Parties
Appellant's Arguments (as presented on appeal)
- Company A acted for multiple family members with actual or potential conflicting interests and failed to comply with duties under common law and the Solicitors' Regulatory Authority Code of Conduct (chapter 3), including Outcome O(3.1) and O(3.6)/(3.7).
- Company A did not obtain clear, informed written consent or provide disinterested advice to the Appellant and her daughter; the conflict was not explained and appropriate safeguards were not taken.
- As a result of that conflict-related negligence, the Appellant and her daughter were induced to enter the global settlement and suffered quantifiable losses; had proper advice been given they would not have agreed the settlement.
- The judge below should have considered causation and loss despite pleading deficiencies, or alternatively assessed the claim as a loss-of-a-chance case and remitted for further proceedings if necessary.
Respondent's Arguments (Company A)
- The judge correctly addressed the conflicts point as it was pleaded (focussed on the Appellant's alleged trust claim) and found that the trust claim lacked sufficient merit; that analysis disposed of the alleged conflict.
- The Appellant and her family had a substantially common interest (a global settlement); the Appellant had effectively authorised family representatives to negotiate and signed by agent; there was no material conflict or, if any, it made no difference to outcome.
- The asserted alternative formulations of the conflicts point advanced on appeal were new, were not pleaded or relied on at trial, and could not be entertained at this stage without procedural unfairness and prejudice to Company A.
- Even if a conflict had been established, the judge's unchallenged factual findings (including family dynamics and weaknesses in the Appellant's defences) mean that any conflict would not have caused loss.
- The causation pleading failed CPR 16.4(1)(a) by not alleging the positive counterfactual (what would have happened if proper advice had been given); the judge properly refused to treat the case as a loss-of-a-chance claim because that was expressly disavowed at trial and not pleaded.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| [2024] EWHC 2763 (Ch) | Judgment below whose factual findings were adopted and relied upon. | The appellate court relied on the unchallenged factual findings in that judgment (as summarised) and treated them as central to the outcome on conflict and causation. |
| Levicom International Holdings BC v Linklaters [2010] EWCA Civ 494 | Shifting evidential burden where claimant pleaded a complete causation case (settlement earlier and on better terms). | Distinguished: the court held Levicom did not assist because the Appellant had not pleaded the necessary positive counterfactual; the evidential shift could not help where nothing was pleaded to be proved. |
| Rhine Shipping DMCC v Vitol SA (the Dijilah) [2024] EWCA Civ 580 | Procedural principle on admitting new points on appeal and prejudice from new arguments not raised at trial. | Applied to refuse admission of several new formulations of the conflict point which were not put at trial, on grounds of potential prejudice and unfairness. |
| Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5 | General principle that trial is not a dress rehearsal; parties control issues to be tried. | Quoted to support the proposition that it is not appropriate to reformulate the case on appeal in a way not advanced at trial. |
| Charles Russell Speechlys LLP v Beneficial House (Birmingham) Regeneration LLP [2021] EWHC 358 (QB) | Options available to a court when faced with inadequate pleading and circumstances in which court may consider matters beyond pleadings. | Considered and applied: the court reviewed that framework and concluded the judge below had properly considered unpleaded closing submissions where he did so and rejected them; there was no basis to permit departure from pleading in this case. |
| Loveridge and Loveridge v Healey [2004] EWCA Civ 173 | Principle that courts may consider a case beyond the pleadings where departure causes no prejudice or amendment would be permitted. | Quoted within the Charles Russell exposition and applied to explain when a court might allow matters outside the pleadings; the appellate court found no such justification here. |
| UK Learning Academy Ltd v Secretary of State for Education [2020] EWCA Civ 370 | Permitting departure from pleaded case in appropriate circumstances; prejudice threshold. | Referred to in considering whether it was just to allow the Appellant to advance matters not pleaded; court emphasised the risk of prejudice and rejected the attempt to expand the case. |
| Perry v Raleys Solicitors [2020] AC 352 | Distinction between matters the claimant must prove on balance and those suitable for loss-of-chance evaluation in professional negligence. | Applied: the court held this was not a loss-of-chance case (it was expressly disavowed and not pleaded), so Perry did not permit recharacterisation of the claim on appeal. |
| Al-Medenni v Mars UK Limited [2005] EWCA Civ 1041 | Adversarial principle that judge must decide issues presented by the parties; cannot find for a claimant on a theory not pleaded. | Applied to support the conclusion that the judge could not be required to decide on a different unpleaded basis and that the parties control the issues for trial. |
Court's Reasoning and Analysis
The appellate court proceeded from the unchallenged factual findings of the trial judge and analysed the two permitted grounds of appeal as follows.
On conflicts of interest, the court emphasised that the judge below considered the conflicts issue as it had been pleaded: principally through the Appellant's asserted trust claim. The judge's approach was to assess whether there were meritorious claims or defences that gave rise to a conflict; he found significant weaknesses in the Appellant's case (limited documentary support, dissipation of the alleged trust fund, the Appellant's unwillingness to give evidence and other factual conclusions). The appellate court held that many expanded formulations of the conflicts point advanced on appeal were either not pleaded, newly advanced, or procedurally impermissible at this stage. Where new formulations had not been put at trial, the court applied established procedural authorities (including Rhine Shipping and related authorities) to refuse to admit those new lines of argument on appeal because they would have caused prejudice and required additional evidence. The court also observed that even if a conflict had been established on a broader view, the judge's unchallenged findings meant that any conflict would not have caused loss.
On causation and loss, the court agreed with the trial judge that the pleaded case failed to set out the positive counterfactual required by CPR 16.4(1)(a): the particulars alleged what would not have happened (the Appellant would not have agreed the settlement) but did not plead what would have followed (e.g. whether the claims would have been settled on better terms or successfully defended at trial). The appellate court held that the failure to plead the positive counterfactual was fatal to establishing causation and could not be cured by implication. The court further rejected the submission that the matter should be decided as a loss-of-chance case or otherwise determined outside the pleadings because loss-of-chance was expressly disavowed at trial and the pleadings did not support such an approach. The court applied authorities outlining the limited circumstances in which courts may consider matters outside the pleadings (Charles Russell Speechlys and related authorities) and concluded that the judge had in fact considered and rejected the expanded closing submissions; there was no basis to fault that approach.
Holding and Implications
DISMISSED
Holding: The appeal is dismissed. The appellate court upheld the trial judge's dismissal of the Appellant's professional negligence claim against Company A.
Implications: The direct consequence is that the trial judgment in favour of Company A stands and the Appellant's claim remains dismissed. The court declined to allow recharacterisation of the case on appeal or to permit new formulations of conflict or causation that were not pleaded and tried; no new binding precedent altering the law was created—the decision applies the existing authorities on conflicts, pleading requirements (CPR 16.4(1)(a)) and the limits on advancing new issues on appeal.
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