Mark William Lee v BDB Pitmans LLP (now known as Broadfield Law UK LLP)

Hearing dates: 30 and 31 July 2025

Deputy High Court Judge Caroline Shea KC:

Claim

The Claimants seek damages resulting from alleged breaches of duty owed to them by a firm of solicitors, formerly knowns as Pitmans LLP (“Pitmans”). The Claimants had retained Pitmans to act on their behalf in a property transaction relating to the sale and future development of two adjoining properties in Ascot, Berkshire (“the Properties”). The Claimants allege that contracts for the sale of the Properties were exchanged without a development agreement in place, as had been contemplated, with the result that the Claimants were not entitled to any overage arising out of the subsequent sale of the developed units. The Claimants say that Pitmans was negligent in failing to take such steps as were necessary to ensure that the Claimants were entitled to such overage payments. I record this by way of background only. The hearing before me was not concerned with the substantive elements of the claim.

The claim was brought not against Pitmans but against BDB Pitmans LLP, now renamed Broadfield Law UK LLP (“Broadfield”). This was because by the time the Claimants brought the claim, Pitmans had merged with Bircham Dyson Bell LLP (the merged firm later coming to be known as Broadfield). The Claimants came to the view, in circumstances that I will consider in more detail in due course, that any liability of Pitmans to the Claimants in respect of breach of duty had passed to Broadfield. The Claimants' case as first pleaded was that Broadfield had assumed the liabilities of Pitmans to the Claimants “by novation or otherwise”. Broadfield denies that it has assumed the liabilities of Pitmans to the Claimants for the purposes of any claim the Claimants might bring in respect of Pitmans' acts or omissions pursuant to its retainer with the Claimants (“the Retainer”).

The Applications

By application dated 4 September 2024 Broadfield applied for summary judgment, on the basis that the Claimants have no real prospect of succeeding in their claim that Broadfield has assumed the liabilities of Pitmans to the Claimants. In defending the application, the Claimants say first that Broadfield has assumed those liabilities by novation. In the alternative, the Claimants allege that Broadfield is estopped from denying that it has assumed the liabilities, based on what are said to be representations made in the published accounts of both firms dating from 2019 (“the 2019 Accounts”) and/or a number of exchanges in correspondence in the period between a letter of claim send to Broadfield by the Claimants and the Claimants issuing the Claim Form, towards the end of the limitation period. Lastly, the Claimants rely further or in the alternative on the doctrine of acknowledgement.

The Claimants make a cross-application dated 15 January 2025, seeking firstly to amend their Particulars of Claim to add particulars of the alleged novation, estoppel or acknowledgement; and secondly seeking, if summary judgment on their claim is ordered, to substitute Adcamp LLP (as Pitmans, having been restored to the register, has been renamed) as defendant. Broadfield consents to the Claimants' application to amend the Particulars of Claim (which I will duly grant), but not to the substitution application.

On the face of the Claimants' application, the substitution of Pitmans as Defendant is sought only if Broadfield succeeds in obtaining summary judgment. However I am asked to make a determination on the substitution issue even if summary judgment is refused, in which event no substitution would be required. This is because there is an appeal to the Court of Appeal from the decision in the case of Office Properties PL Ltd (in Liquidation) v Adcamp LLP [2025] 1 W.L.R 2287, in which the Court granted an application to substitute Pitmans for Broadfield in a claim based on an allegation of breach of professional duty of care. That appeal is listed to be heard in January 2026 and puts in issue whether the prevailing understanding of CPR Rule 19.6(3)(b), which the Claimants claim is favourable to their application for substitution, is correct. One possible outcome is that Court of Appeal could reverse that understanding, and uphold the appeal against the order for substitution in Office Properties.

Given that possibility, the Claimants do not simply seek the substitution of Pitmans as defendant to the claim, which if granted would obviate the need for a decision on the summary judgment application. That would be to expose the Claimants to risk on appeal, if there were to be a negative outcome (from the Claimants' point of view) of the appeal in Office Properties. Accordingly they seek to have the substitution application decided, even if Broadfield does not succeed in obtaining summary judgment, so that if the substitution route is effectively cut off following the appeal in Office Properties, they will retain the benefit of their claim against Broadfield.

I am invited to determine both applications, given that if the Claimants succeed in resisting summary judgment they could still fail at the trial of the novation, estoppel and acknowledgement issues, in which case both Pitmans and Broadfield would escape liability. If that happens, they would then seek to invoke the benefit of the outcome of the substitution application (should it be successful), which would allow them to pursue their underlying professional negligence claim against one of the two parties, the justification being that one of them must be liable for any negligence established, and it would be unjust to allow the complexities of the appeal against an existing decision and the procedural web involved in substitution to defeat a claim which if made out will establish negligence on the part of either Pitmans or Broadfield. Broadfield is amenable to that approach, and I will do as requested, on the basis that fairness demands that the Claimants are able to bring their claim, if it has a realistic prospect of success, and assuming their substitution application satisfies the relevant legal test, against whichever of the two parties transpires to be liable.

Broadfield's application for summary judgement was supported by the written evidence of John Hutchinson, managing partner of Broadfield (two statements), Paul Castellani of Kennedys, solicitors acting for Broadfield in respect of the Claimants' claim (two statements), and one statement of Sarah Potter, a partner in Broadfield, formerly a partner in Pitmans, who acted for the Claimants on the Retainer. Written evidence in support of the Claimants' application was provided by Martin Scott, of Milners (two statements), solicitors acting for the Claimants in their claim.

Background

The Retainer

The Claimants' case is as follows. In setting out the narrative I do not purport to make findings of any controversial facts. In 2014, the Claimants wished to realise the development potential of the Properties. They entered into negotiations with a potential purchaser, and reached an in principle oral agreement as to the sale and subsequent development of the Properties, with provision for the purchasing entity to build out the development, and the Claimants to be paid overage upon sale of the developed units. The in principle agreement was renegotiated in 2018, and was understood by all concerned (rightly) to be subject to contract.

The First Claimant contacted Pitmans by telephone in early February 2018 and on 6 February 2018 the Claimants attended a meeting with a Ms Delphine Mehouas, a partner at Pitmans. She passed the matter on to Ms Potter. It is alleged that important information about the proposed transactions was not conveyed by Ms Mehouas to Ms Potter. On 15 February 2018, Pitmans provided a letter of engagement to the First Claimant containing the terms of its retainer, but Broadfield accepts that a letter of engagement was not provided to the Second Claimant.

In the event contracts for the sale of the Properties were exchanged without any development agreement having been agreed. The sale price for the Properties was, the Claimants allege, a (deliberate) undervalue in the (misplaced) expectation that more value would be unlocked and disbursed to them by means of an overage provision as the development progressed and sales off were made. However, no development agreement was signed, and in the event the purchasing entity fell out with its lenders and administrators were appointed on 17 December 2021. The administrators sold the Properties free of the overage rights which had been granted to the First Claimant in the contract of sale.

The Claimants claim that Pitmans was in breach of its duty of care to them by (to simplify somewhat) failing to ensure that a binding development agreement was entered into prior to exchange of contracts, or failing to ensure that the contracts were conditional on such an agreement having been concluded; and failing to ensure that overage would be ultimately paid to the Claimants. The Claimants claim losses reflecting the loss of the opportunity to earn overage following development and sale, or at the very least the loss of the actual market value of the Properties, said to...