Ryan Morris and 131 Others v Williams & Company Solicitors (A Firm)

Hearing dates: 19–20 March 2024

APPROVED JUDGMENT

This judgment was handed down by the judges remotely by circulation to the parties' representatives by email and release to The National Archives. The date and time for hand-down is deemed to be 10:00am on 18 April 2024.

Sir Geoffrey Vos, MASTER OF THE ROLLS

Introduction

In this case, the 134 claimants (the Claimants) issued a single claim form against Williams & Co Solicitors (the Solicitors). Each of the Claimants sought damages for breaches of the Solicitors' duty to advise properly in relation to their investments in one or more of 9 separate development projects promoted by the same group of companies. HH Judge Jarman KC (the judge) dismissed the Solicitors' application to strike out the claim form under CPR Part 3.4(2)(b) and/or (c) on the grounds that it was an abuse of process or an obstruction to the just disposal of the proceedings, or the claim form did not comply with CPR Part 7.3 (7.3).

Against that background, this appeal concerns the circumstances in which it is permissible under the CPR for multiple claimants to bring claims in one claim form and one set of proceedings. There are, in effect, three regimes for such claims under CPR Part 19, which is headed “Parties and Group Litigation”. The first is governed by CPR Part 19.1 (19.1) (which needs to be read alongside 7.3, which appears in the Part concerning claim forms). It is that regime that is the subject of this appeal. The second regime is representative proceedings brought under CPR Part 19.8, and the third regime is group litigation established by CPR Part 19.21–19.24.

The argument in this court has revolved around the proper meaning of 19.1 and 7.3 and the correctness of the tests applied by the Divisional Court (Dingemans LJ and Andrew Baker J) in Abbott v. Ministry of Defence [2023] EWHC 1475 (KB), [2023] 1 WLR 4002 ( Abbott). Abbott is important because HH Judge Jarman KC (the judge) expressly followed it in deciding this case, and there is no appeal from Abbott to this court.

19.1 provides that “[a]ny number of claimants or defendants may be joined as parties to a claim”, and 7.3 provides that “[a] claimant may use a single claim form to start all claims which can be conveniently disposed of in the same proceedings”.

There has been controversy over what precisely Abbott decided. For present purposes, it is sufficient to refer to [73] of Andrew Baker J's judgment in Abbott, where he said that “[i]f there are likely to be common issues of sufficient significance that their determination would constitute real progress towards the final determination of each claim in a set of claims, that could be enough for a conclusion that common disposal rather than separate disposal of that set of claims would be convenient”. This can be referred to as the “real progress” test of whether “all claims [in a single claims form] can be conveniently disposed of in the same proceedings” pursuant to 7.3.

In a nutshell, the Solicitors argue that Abbott was wrongly decided. They say that the words of 19.1 and 7.3 severely restrict the situations in which numerous claimants can bring separate claims in one claim form. In particular, the words “[a] claimant” in 7.3 is singular and does not, in context, include the plural. The word “claim” in 19.1 means “a cause of action”, and not, as the Divisional Court in Abbott held, “proceedings”. The Solicitors argue that it is inconvenient and unfair for these 134 Claimants to group together their disparate claims. The process has already led to inadequate disclosure, and will lead to the Solicitors being unable properly to defend themselves.

In response, the Claimants submit that Abbott was correctly decided, and that, even if it was not, claims of this kind have historically always been allowed to proceed under 19.1 and its predecessors. Whatever test is applied, all the Claimants' claims can be conveniently disposed of in the same proceedings within the proper meaning of 7.3. The judge was right, and the Solicitors' construction of 19.1 and 7.3 would set the clock back decades. The Claimants rely on the procedural history of group claims going back to the seminal decisions of the Court of Appeal and the House of Lords in Hannay & Co v. Smurthwaite [1893] 2 QB 412 ( Hannay CA), and [1894] AC 494 ( Hannay HL). The Claimants argue that, if the Solicitors succeed, the Claimants will be forced to give up their claims, because of the court fees of £5,000 per claimant, which will need to be paid if they each have to issue their own claim form.

I have decided that both the Solicitors' construction of 19.1 and 7.3 and the tests adumbrated in Abbott are incorrect in law. The regime allowing multiple claimants to bring their claims in one claim form under 19.1 has to be construed against the background of the previous regime established under the Rules of the Supreme Court (RSC) in general and Order 15 rule 4 of the RSC 1999 in particular (O15 r4). Even though the judge applied the Abbott test, he was right to allow the Claimants' claims to proceed in one set of proceedings. O15 r4 allowed multiple claimants where, amongst other things, “some common question of law or fact” arose. This formal requirement was not carried over into the CPR. It seems to me that the Civil Procedure Rules Committee (the CPRC) could usefully look again at whether it would have been better if it had been.

This judgment will proceed to deal with: (i) the essential background, (ii) the relevant provisions of the CPR, (iii) the Abbott litigation, (iv) other relevant authorities and RSC provisions, (v) when multiple claimants can issue a single claim form under 19.1, (vi) the article 6 point raised by the Respondents' Notice, (vii) disposal of the appeal, and (viii) my conclusions.

The essential background

This section is taken loosely from [1]–[9] of the judge's judgment. Northern Powerhouse Development Limited (Northern Powerhouse), operating through associated companies, promoted 9 development projects in different parts of England and Wales between 2017 and 2020. The investors were to be granted leases of units in the developments. Northern Powerhouse nominated the Solicitors to act for and advise the potential investors in each of the 9 projects.

When each of the Claimants instructed the Solicitors, they were provided with a standard pack of documents, including a client care letter, and standard terms and conditions of the retainer. There was some variation in the wording of these documents, but the Claimants maintain that the essential terms of the Solicitors' retainers were the same in each of their cases.

Two of those essential terms were set out expressly in writing. They were that the Solicitors would: (i) explain the effect of any important document, and (ii) advise of any risk of which the Solicitors were aware, or which was reasonably foreseeable.

The Solicitors' terms and conditions made it clear that they would not give commercial or investment or tax advice. Thereafter, the Solicitors provided the Claimants with a report on title, a draft lease and sublease, drafts of two option agreements to sell or buy back the units and, in certain cases, draft guarantees. The reports on title: (a) advised that the Claimants would get good leasehold title, (b) warned that the investment deposits could be used by Northern Powerhouse prior to completion, (c) said that, if completion did not taken place by a certain date, the Claimants' investment would be refunded, and (d) warned of the risk of insolvency of Northern Powerhouse and its associated companies.

The Claimants' core case is that the Solicitors' advice failed to warn of the risks of completion not taking place, and of the dissipation of the investment deposits in the meantime. These were the risks which eventuated. The guarantees were mostly provided by associated companies without sufficient assets to honour them.

No defence had been served when the judge heard the strike out application, but a draft defence was made available shortly before the hearing. The Solicitors' argument to the judge was presented on the basis that they reserved the right to argue in the Court of Appeal that Abbott was wrong.

The judge dismissed the application on 25 July 2023. He said at [13] that Abbott had held that “subject to the test of convenience, any number of claimants can bring a claim pursuant to a single claim form”. The judge set out at [14]–[20] the principles that he said emerged from Abbott at [63]–[73]. I shall return to those principles when I deal below with what Abbott decided. The Solicitors emphasised to the judge that the scope of a solicitor's duty to advise may vary according to the understanding and experience of the client. The judge then dealt at [24]–[36] with three of the 6 examples provided by the Solicitors to show that each of the Claimants would have to plead their particular understanding and experience, so that the outcome of one case would not be binding on another.

At [37]–[38], the judge held that there were significant common issues in these...