Lenderink-Woods v Zurich Assurance Ltd and others [2015] EWHC 3634 (Ch)

A recent strike out/summary judgment decision by the High Court in Lenderink-Woods v Zurich Assurance Ltd and others [2015] EWHC 3634 (Ch) provides helpful guidance on the definition of 'knowledge' when deciding whether a claim has been brought out of time. While this was a tax advice claim, the judgment is relevant to all negligence claims when considering limitation issues.


This was an application by the Defendants, Zurich Assurance Limited and Zurich Advice Network Limited, for strike out/summary judgment on limitation grounds in a professional negligence claim concerning tax advice provided in 2001. As court proceedings had not been commenced until 2014, the Claimant, Mrs Lenderink-Woods, was out of time under the six-year limitation rule for primary limitation unless she could establish she had insufficient knowledge of her alleged loss until three years (or less) prior to the date proceedings were brought.

Under section 14A of the Limitation Act 1980 (LA) claimants are afforded an additional three years from either the date of knowledge of loss or the date when he or she ought reasonably to have known of the loss. The question for the Court therefore was whether it was fanciful for the 95-year-old Claimant to assert that she lacked sufficient knowledge to bring her claim until after 10 December 2011.


The Claimant lived in Costa Rica and indeed had not been a UK resident since 1948. From 1996, she maintained an inherited portfolio of investments in the UK (the Portfolio). The Portfolio had a value of about £567,700 and the potential inheritance tax burden was about £130,300. In order to mitigate her exposure to inheritance tax, in 2001 she sought advice from a financial advisor, Mr Davies, who was a member of the Zurich Advice Network.

Mr Davies advised the Claimant to convert the Portfolio into insurance bonds within a loan trust scheme (Scheme). Through the Scheme, the Portfolio proceeds were 'loaned' to trustees, who then invested the capital into investment bonds, which were held upon discretionary trusts. This meant that each year, the trustees would be able to receive up to 5% of the value of the investment bonds until the loan was repaid, without creating an immediate tax bill. However, if the Claimant died, the outstanding balance of the loan would form part of her estate for inheritance tax.

The Claimant commenced court proceedings against Zurich for professional negligence on 10 December 2014. Her main allegation was that given her non-UK residency, inheritance tax could have been removed entirely simply by investing the Portfolio in exempt gilts or offshore unit trusts.

Limitation issues

The battle ground under Section 14A LA is when a claimant ought reasonably to have known of his or her loss. And that depends on the circumstances of the case.

Zurich argued that the Claimant had made complaints against Mr Davies in 2009 and accordingly had the requisite knowledge (ie she either knew, or ought reasonably have known of her alleged loss) prior to the cut off in December 2011.

Zurich made the following key arguments:

  • All that was required was 'broad knowledge' of the matters of complaint and for an appreciation that the problems were attributable to something that Mr Davies had or had not done. The complaint correspondence demonstrated that she knew that "something was up" and that this was enough to trigger the three-year period
  • The Claimant did not have to be certain that she had a claim against Mr Davies. She just needed to know enough for it to be reasonable to investigate further. The correspondence demonstrated this
  • It was clear that the Claimant took advice from another investment advisor prior to 10 December 2011 who looked into the Portfolio. At that point, the Claimant was fixed with knowledge of what a competent investment advisor should have advised her (but did not).

In response, the Claimant argued that any complaints made prior to 10 December 2011 were in relation to investment performance of the bonds, not in relation to the decision to embark upon the Scheme itself. She argued that she first had knowledge that the advice to enter into the Scheme was the causes of her loss on 20 February 2012. In addition, she stated that she continued to seek, receive and rely upon advice from Mr Davies up to at least 10 December 2011.


The Court was not persuaded by Zurich's arguments and found that the Claimant had a real prospect of being able to answer each of the points raised at trial. It found that none of the material pointed to by Zurich persuaded it that it was "…fanciful to suppose that Mrs Lenderink-Woods can establish at trial that she did not actually know and is not to be treated as if she knew the material facts that now found her complaint against Mr Davies: indeed there is a “real” prospect that she will."

The Court re-enforced the point that as this was a strike out/summary judgment application, the burden of proof was on Zurich to demonstrate that the Claimant had sufficient knowledge prior to the relevant date. In its view, Zurich had failed to do this.


As well as being a helpful reminder of the principles underpinning section 14A LA to extend primary limitation, this decision makes clear the very significant burden that a defendant must discharge to persuade a court to strike out or give summary judgment on limitation grounds before the full facts of a case are heard at trial. As the applicant, it was for Zurich to persuade the Court that there was no real prospect of the Claimant establishing that she did not know the material facts until at 10 December 2011. At trial, the burden would instead lie with the Claimant to establish on the balance of probabilities that she first had relevant knowledge after the relevant date. In resisting a summary judgment application she only had to put before the Court sufficient material to show that there was a real prospect of doing so at trial.

The costs of a summary judgment/strike out application are likely to be significant and if unsuccessful will usually also mean paying the other side's cost. Accordingly, only the clearest cases will usually justify the cost risks of pursuing an application. For all those other cases where there is no clear and unequivocal evidence that the claimant had requisite knowledge more than three years prior to issue of proceedings, it will almost certainly be better to make those arguments at trial.