In Capita ATL Pension Trustees Ltd and others v. Sedgwick Financial Services Ltd and others EWHC 214 (Ch) Mrs Justice Proudman, sitting in the Chancery Division of the High Court, granted the second defendant's application for summary judgment in a claim by trustees for damages due to failures to (i) properly advise on benefit changes and (ii) administer a pension scheme.
Summary judgment was granted in favour of the second defendant on the basis that the proceedings were time-barred. In her judgment, Mrs Justice Proudman provided guidance on determining the date on which the trustees first had the requisite knowledge for bringing an action of the purposes of section 14A Limitation Act 1980.
Section 14A Limitation Act 1980 ("the Act")
Section 14A of the Limitation Act 1980 extends the limitation period for claims in negligence by three years, from when a party knew or ought reasonably to have known that it had a claim. Section 14A (10) states:
"For the purposes of this section, a person's knowledge includes knowledge which he might reasonably have been expected to acquire:
- from facts observable or ascertainable by him; or
- from facts ascertainable by him with the help of appropriate expert advice which it is reasonable for him to seek
but a person shall not be taken by virtue of this subsection to have knowledge of a fact ascertainable only with the help of expert advice so long as he has taken all reasonable steps to obtain (and, where appropriate, to act on) that advice."
The important point in this case was the date on which the trustees first had the requisite knowledge for bringing an action in damages against the second defendant. The question for the court was whether the fact that the second defendant could be liable was only ascertainable with the help of expert advice, and whether the trustees had taken all reasonable steps to obtain that advice, within the remit of the Act.
In this case, the judge ruled that the claimants had "actual knowledge", having been informed by letter in July 2007 that there may have been a failure to administer the pension fund. Further, a standstill agreement had been entered with the second defendant in June 2008 because the trustees had noted that there may have been a cause of action against them. The judge held that the claimants also had "constructive knowledge" of the relevant facts as it would have been reasonable for the claimants to have taken advice from a specialist pensions solicitor so that the trustees would have been fixed with constructive knowledge of the advice obtained, had they done so. The claim against the second defendant was therefore dismissed.