This recent decision of the High Court re-examines late applications to amend Particulars of Claims and confirms the principles that will be considered. It serves as a reminder to litigants that, save for exceptional circumstances, the Court is likely to take a dim view to late applications with little merit.

The Facts

In or around 2004, Wanis Limited was informed that its business premises was to be compulsorily purchased as part of the 2012 London Olympic Games.  In or around October 2006, the shareholders of Wanis Limited incorporated the Claimant, as a special purchase vehicle, for the purpose of acquiring new premises, which it would then lease back to Wanis Limited. To facilitate the purchase, the Claimant approached the Defendants for a loan in the sum of £10.5million. As part of the terms of the loan, the Claimant entered into an amortising base rate swap (the “Swap”) with the Defendants.

The Claim

Following the rapid decline of interest rates during 2008, the Claimant alleged that they had been mis-sold Swap. In the Particulars of Claim as originally pleaded, the background facts were set out, including the terms of the loan agreement, the Swap and citing reliance on a presentation made by the Defendants prior to entering into the loan agreement. However, no reference was made to a telephone call where the terms of the Swap were discussed. 8 weeks before trial, the Claimant made an application to amend their Particulars of Claim to more fully plead the factual background, detail the content of the telephone call and plead additional breaches of duty to include breach of common law, negligence, breach of contract and misrepresentation.

The Decision

Mindful of the decision in Swain-Mason v Mills & Reeve (a firm) [2011] All ER (D) 131 (Jan), the Court refused the Claimant’s application. The Court noted that when considering applications to amend Statements of Case it is always necessary to strike a fair balance between the interests of the Claimant and the Defendant, but consideration should be given to the timing of the application. In particular, the Court should be less willing to allow a very late amendment and, if a late amendment is to be made, the party seeking the amendment should fully justify it.

The Court also noted that it was impossible to state an exhaustive list of factors which it will consider when deciding applications to amend, as so much will depend on the facts of each case. However, referring to the decision of Brown v Innovatorone Plc [2011] EWHC 3221 (Comm) the Court confirmed that, as well as striking a fair balance between the parties, it should also look at the history of amendments, the prejudice to each of the parties should the amendment be allowed, and whether the text of the proposed amendment is satisfactory in terms of clarity and particularity. Importantly, the Court held that the merits of the amendments should also be considered and if they have no real prospect of success then they must be refused.

Commentary

This case provides a reminder to litigants that the Court is likely to take a dim view to late amendments to Statements of Case, especially if they are vague and unparticularised. However, the judgment also makes clear that a litigant may be better placed to ensure a late amendment is approved if it is short, focused, properly explained, justified and fully particularised.