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Cite as: [2002] EWCA Civ 1977, [2007] Lloyd's Rep PN 13

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Neutral Citation Number: [2002] EWCA Civ 1977
A3/2002/1251

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
(MR JUSTICE NEUBERGER)

Royal Courts of Justice
Strand
London, WC2
20th December 2002

B e f o r e :

LORD JUSTICE PETER GIBSON
LORD JUSTICE CLARKE
LORD JUSTICE SCOTT BAKER

____________________

MESSRS G A MOFFAT & OTHERS Claimants/Respondents
-v-
MESSRS BURGES SALMON (A FIRM) Defendant/Appellant

____________________

(Computer-Aided Transcript of the Palantype Notes of
Smith Bernal Wordwave Limited
190 Fleet Street, London EC4A 2AG
Tel No: 020 7404 1400 Fax No: 020 7831 8838
(Official Shorthand Writers to the Court)

____________________

MR I CROXFORD QC and MR J SEITLER (instructed by Barlow Lyde & Gilbert, Beaufort House, 15 Boltoph Street, London EC3A 7NJ) appeared on behalf of the Appellant
MR J RANDALL QC and MR L ASHWORTH (instructed by Wragge & Co, 55 Colmore Row, Birmingham, B3 2AS) appeared on behalf of the Respondents

____________________

HTML VERSION OF JUDGMENT
(AS APPROVED BY THE COURT)
____________________

Crown Copyright ©

    Friday, 20 December 2002

    J U D G M E N T

  1. LORD JUSTICE PETER GIBSON: I will ask Clarke LJ to give the first judgment.
  2. LORD JUSTICE CLARKE:

    INTRODUCTION

  3. This is an appeal by Burgess Salmon, who are a well-known firm of solicitors in Bristol, against an order made by Neuberger J on 29 May 2002 pursuant to a judgment handed down on 8 May. The judgment was given in the course of proceedings by the respondents, who are 34 individuals who were clients of the appellants and claim damages against them in both contract and tort for alleged breach of duty while they were their solicitors. The judge held that the respondents are for some purposes entitled to rely upon the terms of a judgment handed down by Evans-Lombe J on 17 June 1999 in litigation between some of the same claimants and others against the National Farmers Union ("the NFU"). The judge granted permission to appeal and the appellants say in this appeal that the judge was wrong so to hold.
  4. The background is quite complicated, but is set out with admirable clarity in paragraphs 1 to 13 of the judge's determinations, so that I can take it comparatively shortly.
  5. THE CLAIMS AGAINST THE NFU

  6. The claims against the NFU were brought by some 130 dairy farmers (whom, like the judge, I shall call "the plaintiffs") against the NFU alleging breach of duty owed to them for giving what was said to be negligent advice which caused them loss. The advice was sought in connection with claims against the EC Commission ("the Commission") in respect of loss sustained as a result of the alleged unlawfulness of a milk quota scheme introduced by the Commission in the early 1980s. In two cases known as Mulder I (in 1988) and Mulder II (in 1992) the European Court of Justice ("the ECJ") held that farmers who suffered such loss were in principle entitled to compensation, which I understand is known as "SLOM compensation", from the Commission. It was in the course of the ECJ proceedings that the plaintiffs (who included all the claimants in this action and thus all the respondents to this appeal) sought advice from the NFU as to what they should do. The advice given was to the effect that they should do nothing and await the outcome of the ECJ claims. It was that advice which was later said to have been negligent because any claim for compensation against the Commission was subject to an EC time bar of five years.
  7. In the event the significance of that time bar was much reduced because on 5 August 1992 the Commission issued a waiver which had the effect that the time bar was waived prospectively. It thus ceased to have significance with effect from 5 August 1987 but only prospectively, not retrospectively.
  8. After Mulder II the Commission made offers to the large number of dairy farmers who had valid applications for SLOM compensation, including the plaintiffs. Those offers led to settlement of the plaintiffs' claims against the Commission, but the plaintiffs asserted against the NFU that the agreed compensation was less than it would have been because of the NFU's negligent advice. Their case was that if they had been properly advised they would have claimed compensation from the Commission before 5 August 1987.
  9. Accordingly the plaintiffs brought proceedings against the NFU, mostly in about August 1997. The NFU advanced various defences including a defence that the action was time barred under the Limitation Act 1980. That issue was determined by Jacob J as a preliminary issue on 4 March 1998. He held that the claims against the NFU "in so far as the same relates to losses suffered more than six years before the issue of their respective writs herein are barred by reason of the provisions of the Limitation Act 1980". There was no appeal against that decision. The claims against the NFU therefore proceeded on that basis.
  10. Ten of the 130 plaintiffs were selected as "lead plaintiffs" on the basis that it was hoped that once the NFU's liability (if any) to the ten plaintiffs was determined at a trial the claims of the remaining plaintiffs could be settled by negotiation. As I understand it, the ten were chosen because they came from different categories of plaintiff. Four of the ten lead plaintiffs are also claimants in these proceedings, namely Mr Dent, Mr Rowell, Mr Martin and Mr Moffat.
  11. The claims of the ten lead plaintiffs came to trial before Evans-Lombe J over a six-week period in February and March 1999. He gave a detailed judgment on 17 June 1999. Most of the ten lead plaintiffs succeeded to a significant extent, including three of the four claimants identified above. However, some of them failed, including Mr Martin. Mr Martin failed because Evans-Lombe J held that there was a break in the chain of causation in that part of his claim was not time barred because he had instructed solicitors, Messrs Bendalls, to advise him as early as 1991.
  12. In paragraphs nine to 13 of his judgment in the instant case the judge described the scheme of Evans-Lombe J's judgment in some detail. It is plain that Evans-Lombe J considered the issues in the NFU action with great care. He first considered the position of the NFU as it potentially applied to all the plaintiffs, and held that the NFU "was potentially liable to its members in contract and to its members and non-members in tort in respect of incompetent advice", although he emphasised that the case of each plaintiff depended upon its own facts. Evans-Lombe J, however, rejected the contention that absent special circumstances the NFU owed a duty in contract to correct negligent advice. He held, again subject to the circumstances of each individual case, that the NFU owed a duty of care to the lead plaintiffs. As to breach of duty, he rejected various lines of defence advanced by the NFU. He then considered the case of each of the lead plaintiffs individually.
  13. The judge in the instant case said that it was clear that the NFU action was hard-fought in relation to all parts of the lead plaintiffs' contentions. I entirely agree and, although some of Evans-Lombe J's conclusions are said to be wrong, it is not, as I understand it, suggested in this appeal that the action before Evans-Lombe J was other than hotly contested.
  14. There was no appeal from the judgment of Evans-Lombe J. As a result of the judgment the successful lead plaintiffs settled the quantum of their claims against the NFU. So did the other plaintiffs, including the remaining 30 of the 34 claimants in this action. Not all plaintiffs received compensation, but those that did did so as a result of negotiations which were based upon the judgment.
  15. THE CLAIMS IN THIS ACTION

  16. In paragraphs 14 to 20 of his judgment the judge described the nature of the respondent's claims against the appellants. He summarised the petition as follows in paragraph 14:
  17. "Each of the claims in the present proceedings against the defendants, Burgess Salmon, arises out of their alleged failure properly to advise the claimants as to the risk of not issuing proceedings against the NFU timeously. In other words, each of the claimants contends that the [defendants] owed a duty of care to advise them that, if they failed to issue their writs against the NFU promptly, and in particular about two years before they actually did so, they would be at risk of losing some of the damages they could otherwise recover from the NFU, because of the very point upon which the NFU succeeded before Jacob J, namely the limitation point."
  18. The judge referred to and set out the terms of two letters written by the appellants on 19 May 1993 and 28 September 1994 respectively, both of which reminded their clients, including some of the respondents, of the time limit and included warnings which the respondents say were inadequate.
  19. As the judge observed in paragraph 19, the respondents say that despite those letters the appellants failed properly to advise them of the risk of delaying issuing their proceedings against the NFU, that as a result they delayed issuing writs against the NFU, that the NFU was accordingly able to rely upon the limitation defence against them, and that as a result they have suffered loss by recovering less against the NFU than they would have done had the appellants given proper advice.
  20. The respondents commenced this action on 20 March 2000, since when there have been a number of directions hearings. The hearing before the judge which led to this appeal was concerned with two issues, but this appeal is concerned with only one of them. The judge described that issue as arising from the respondent's contention that the appellants are, solely for the purposes of assessing damages in this action, effectively bound by the finding of Evans-Lombe J in the judgment given on 17 June 1999 against the NFU.
  21. A number of defences have been advanced by the appellants, some of which have been abandoned. In the skeleton argument Mr Randall is critical of the appellant's changes of stance. However, it seems to me that we should consider the appellant's position as it was before the judge and as it is now. The appellants' case is (a) that the respondents were properly advised as a matter of fact, some in writing and some verbally, and (b) that they discharged their duties to the respondents, those duties in any event not extending, at any rate in some if not in all cases, to the subject matter of the complaints made because the relevant engagement was expressed to be one of limited scope. It is common ground that those issues are unaffected by the judgment or order with which we are concerned in this appeal.
  22. The crucial point for present purposes is that the appellants say that the claims of most, if not all, of the respondents against the NFU were not in fact statute barred, as Evans-Lombe J found some of the lead plaintiffs' claims to have been, and that his findings are demonstrably wrong. The appellants say that relevant advice from the NFU, that is advice as to what needed to be done to protect their rights to SLOM compensation from the Commission, was not received by the vast majority of farmers until the end of 1991 or the beginning of 1992 at the earliest. Accordingly, the appellants say that, with the possible exception of four particular claimants, none of the respondents' claims against the NFU was in fact statute barred.
  23. There is some urgency about the matter because, as I understand it, the claims of five claimants have been selected for trial ahead of the others in February 2003, no doubt in the reasonable hope that the settlement or determination of those claims will in practice lead to the settlement of all the other claims. As I understand it, Neuberger J is to be the trial judge. Of those five claimants two of them were lead plaintiffs in the NFU action, namely Mr Rowell and Mr Dent.
  24. THE ORDER

  25. The order appealed from is, so far as relevant, in these terms:
  26. " ... and upon the Defendant by Counsel conceding that if the Claimants had issued their writs timeously against the NFU (i.e. if the Claimants establish that the Defendant owed a duty to give them advice to take that course, that the Defendant failed in that duty, and that if the Defendant had carried out that duty, the Claimants would have issued their writs timeously) then the NFU action would have been heard earlier, and that the Court would have reached precisely the same conclusions on all points which Evans Loam J reached later in his main judgment, save that those periods of loss which were held to be time-barred would not have been held to have been time-barred.
    ...
    IT IS ORDERED THAT
    1. (1) For the purpose of proving their losses alleged in these proceedings:
    (a) the Claimants are entitled to rely on the terms of the entire judgment of Evans Loam J in the NFU litigation, and
    (b) (without prejudice to the generality of (a), and for the avoidance of doubt) those 4 Claimants who were lead Plaintiffs in the NFU litigation and in respect of whom Evans Loam J made specific findings of fact in his said judgment, are entitled respectively to rely on those specific findings as representing the terms of the notional judgment which the Court would have delivered in timeously commenced proceedings against the NFU, save only as regards those periods of loss which Evans-Lombe J held to be time-barred ...
    4.
    (a) Permission to re-amend the Master Defence so as to include paragraph 91(4) of the draft served under cover of a letter dated 28th May, 2002 be refused ... ."
  27. The terms of the order are in my opinion of some importance, given the concerns expressed by Mr Croxford QC on behalf of the appellants. Those terms were carefully drawn after the judge heard detailed submissions from counsel on both sides, having first made his judgment available to the parties.
  28. The critical point is that paragraph 1(1) of the order is expressed to be "for the purpose of proving their losses alleged in these proceedings." There is nothing in the order, as I read it, which entitles the respondents to rely upon any part of the judgment of Evans-Lombe J for any other purpose. Thus, there is, for example, nothing in the order which entitles the respondents to rely upon anything said by Evans-Lombe J in relation to the questions whether the appellants owed to the respondents a duty to exercise skill and care, what the scope of any such duty was or whether there was a breach of the duty.
  29. Although concern was expressed on behalf of the appellants that some of the exchanges between counsel and the judge might lead to a contrary view, for my part I do not accept that that is so. The judge gave a very detailed and in my opinion carefully reasoned judgment. To my mind he made the position clear. I therefore turn to the judgment.
  30. THE JUDGMENT

  31. The judge gave very detailed reasons for his conclusions in paragraphs 38 to 69 of his judgment. In paragraph 38 he expressly held that there was no question of the appellant being bound as a matter of law by the judgment of Evans-Lombe J. Thus they were not bound by any fact found, inference drawn or point of law determined by him. The appellants were not parties to the NFU action, nor did they act as solicitors to the parties in that action. As the judge expressly stated in paragraph 39, there was therefore no question of their being bound by reason of any form of issue estoppel or indeed on any wider basis, including abuse of process of whatever type. So much was conceded by Mr Randall before the judge and indeed before us. It follows that the respondents must prove, without reliance upon anything in the judgment of Evans-Lombe J, the nature of the duty owed to them by the appellants, the breach of that duty and causation, including, as the judge put it, both reliance upon any advice actually given and where they would have relied on any advice which it can be shown ought to have been given. The judge made similar statements in paragraphs 53, 57 and 67, where he said this in the first sentence:
  32. "In my judgment, therefore, save possibly for the purpose of Civil Evidence Act Notices and cross-examination, the judgment of Evans-Lombe J need play no part in these proceedings in relation to the issues of duty, breach of duty, reliance or causation."
  33. That statement seems to me to be clear and to be entirely consistent with what the judge had said in paragraph 39, to which I have already referred but which I should perhaps quote:
  34. "Accordingly, there is no question of the claimants being able to rely on any of the findings made in the main judgment in relation to questions such as the date upon which any claimant instructed the defendants, the nature of the duty owing by the defendants to each claimant, whether and if so in what way that duty was breached, and whether the claimant in any way relied on advice actually given by the defendants, or would have relied on advice which ought to have been given by the defendants. All those matters will have to be determined in these proceedings as between the claimants and the defendants, and the only value of the NFU action in such a connection may be that some of the evidence in it may found the basis of a Civil Evidence Act Notice (which in turn may be challenged) or may found the basis of some questions in cross-examination in these proceedings."

    The judge added in paragraph 40:

    "However, if the claimants establish these other fundamental features of their claim against the defendants (duty, breach of duty, reliance and causation) then the claimants contend that the main judgment will form a very important ingredient in connection with the assessment of the damages which each claimant can recover from the defendants."
  35. As I read paragraphs 39, 40 and 67, the judge was indicating that on issues other than assessment of damages the only relevance of the trial before Evans-Lombe J was that the evidence in it (i.e. by contrast with the judgment) might be admissible subject to the ordinary rules of evidence in civil proceedings. Mr Randall concedes that that is so, subject to one possible point which he expressly accepts was not considered by the judge. He told us that he might wish to seek to adduce the judgment as evidence on those issues on some as yet unspecified basis. There is nothing in the judgment to suggest that any attempt to do so might succeed. Indeed, any such attempt seems to me to be fraught with difficulty. But Mr Croxford told us that he would not argue that it was not open to the respondents to make such an application. I would only add that any such application would presumably have to be made in the very near future, since the trial is to begin in February.
  36. In conclusion on this point, to my mind the basis of the judge's judgment is clear. He held that it was open to the respondents to rely upon the conclusions of Evans-Lombe J on the measure of damages, assuming that they had established (by other evidence) the duty, the breach of duty and either reliance upon advice actually given, or that they would have relied on advice which they say should have been given.
  37. THE FOUR LEAD PLAINTIFFS

  38. The position of the four claimants, who were lead plaintiffs in the NFU litigation, is different from that of the others. In the case of those four, Evans-Lombe J decided what (if any) loss had been suffered by them as a result of the NFU's breach of duty. The judge clearly set out the respondent's argument in paragraphs 41 to 47 of his judgment as follows:
  39. "41 I start by considering the position of the four claimants who were also lead plaintiffs in the NFU action, i.e. plaintiffs whose claims against the NFU Evans-Lombe J considered not only in the first, more general, part of his judgment, but also in the second, more specific, part of his judgment. Those claimants, Mr Moffat, Mr Dent, Mr Rowell, and Mr Martin, contend that, if they succeed in establishing the necessary duty, breach of duty, reliance and causation as against the defendants, then the measure of damages they will recover is effectively a foregone conclusion, and is to be determined by reference to the main judgment, i.e. the decision of Evans-Lombe J.
    42. This argument proceeds on the following basis. As the defendants plead in paragraph 91 of their proposed re-amended Defence:
    `If, which is denied, the defendant was in breach of duty to the claimants and if, which is denied, the breach caused any loss, the loss properly described can be claimed as a result thereof, is the loss of the chance to recover greater sums against the NFU than were in fact recovered.'
    43. Those `greater sums' are the sums referable to the greater periods of loss which Evans-Lombe J would have held as recoverable by the four claimants against the NFU if they had not been time barred, in addition to the sums referable to the periods of loss which did not fall foul of the Limitation Act 1980.
    44. The claimants rely heavily on a concession made comparatively recently by the defendants (and, particularly in a less than straightforward case such as this, I intend no criticism of the defendants when characterising the concession as having been made recently). That concession is that if the claimants had issued their writs timeously against the NFU (i.e. if the claimants establish that the defendants owed a duty to give them advice to take that course, that the defendants failed in that duty, and that if the defendants had carried out that duty, the claimants would have issued their writs timeously) then the NFU action would have been heard some two years earlier, and that Evans-Lombe J (or if it had been a different tribunal, another Judge) would have reached precisely the same conclusions on all points which he reached two years later in his main judgment, save that, of course, those periods of loss which were held to be time-barred would not have been held to have been time-barred.
    45. In light of that concession, Mr Randall contends that, once one gets to the question of assessment of damages in this action in relation to each of the four claimants, one simply looks at the periods of loss claimed by each such claimant which were held by Evans-Lombe J to be time-barred, and (subject to adjustment in terms of interest to allow for the notional earlier trial date) there can be no further issue in relation to the periods of loss for which damages are recoverable.
    46. I have reached the conclusion that that argument is correct. Once one is simply down to assessing what loss the lead claimants have suffered as a result of the defendants' negligence (which, on this basis, one must assume to have been established), it is common ground that loss is the lost opportunity to recover the damages which the Court would have awarded them in a trial some two years earlier than the actual trial date on the basis of notional writs against the NFU issued some two years earlier than the actual writs. One knows exactly what those extra damages would have been, because of the defendants' concession that, with the exception of the limitation point and its effect, the periods of loss for which the notional Judge would have held damages recoverable would have been identical to the periods of loss for which Evans-Lombe J would actually have held damages recoverable, were it not for the limitation point.
    47. It seems to me that this conclusion is entirely consistent with Mr Croxford's concession, which I think itself is correct, to the effect that there should be no discount in respect of the four claimants' loss. As I have said, it seems to me that the defendants have correctly characterised the claimants' loss as `the loss of [a] chance'. The proper approach to the assessment of damages where the loss is properly characterised as the loss of a chance has been considered in a number of decisions of the Court of Appeal, most notably Allied Maples Group Limited -v- Simmons & Simmons (A Firm) 1 WLR 1602, Mount -v- Barker Austin [1998] PNLR 493 and Charles -v- Hugh James Jones & Jenkins (A Firm) 1 All ER 289."
  40. The judge then identified the problems which face claimants where there has been no trial of what may be called the underlying action. He then continued at the end of paragraph 48:
  41. "The unusual feature of this case is that, because the right to bring proceedings against the NFU was not entirely lost (at least in the case of the claimants) it is unnecessary to speculate about the result of the proceedings: there is the detailed judgment of Evans-Lombe J. Thanks to the concessions sensibly made by the defendants, it is not even necessary to consider whether there is any chance that, had there been no negligence (which is assumed for present purposes), and the writs had been issue earlier, the correspondingly earlier notional decision would have been different in any respect (other, of course, than in respect of a limitation defence) than the actual decision two years later in the main judgment."

    The judge concluded in paragraph 49 as follows:

    "49 Accordingly, Mr Croxford accepts that, whatever damages would otherwise be recoverable by the claimants against the defendants, there would be no question of applying a discount in the four claimants' cases, even though this is a loss of a chance case. As a matter of logical analysis, that concession is based on the fact that one can be confident that those claimants would have recovered whatever they claim they should have recovered if there had been no time-bar problem, because one actually knows what Evans-Lombe J decided, and, thanks to the defendants' realistic concession, one knows what he (or another Judge) would have decided two years earlier. It seems to me that this logic supports the claimants' contention which is disputed by the defendants on the second issue: if the defendants had not been negligent, as I am assuming it had been for present purposes, then, as again I am assuming for present purposes, the claimants would have issued their proceedings against the NFU timeously, and, in the light of the defendants' concession, Evans-Lombe J (or another Judge) would have found for the four claimants on liability two years earlier than he actually did, in respect of periods of loss which one can assess from considering his actual judgment, because it is accepted that any notional earlier judgment would have come to precisely the same conclusions (save in relation to the limitation point)."
  42. Mr Croxford submits that the effect of that conclusion is that the court will be endorsing the decision of Evans-Lombe J made in proceedings to which the appellants were not parties without giving them an opportunity to adduce evidence as to the true position and, thus, to submit that the conclusions reached by Evans-Lombe J were wrong.
  43. The point can be demonstrated in this way. As I have already indicated, the respondents wish to persuade the judge at the trial of this action that most, if not all, of the respondents' claims were not statute barred, as Evans-Lombe J held them to have been, because advice was not sought or received by the majority of farmers until the end of 1991 or the beginning of 1992. An example is the case of Mr Dent.
  44. The appellants' case in this regard is put in paragraph 32 of their skeleton argument in this way:
  45. "One example (amongst many) relates to the Claimant Mr Dent. In June 1998 Mr Dent, a lead Claimant in the NFU litigation, initially said that he was given advice about SLOM Compensation by the NFU when the NFU's Gillian Darling told him to `keep an eye on the press'. This is evident from a schedule produced by the Claimants in the NFU litigation. As that schedule also shows, by way of amendment, he later considered the matter again and put the date of advice at July 1989. The NFU disputed that the conversation in 1989 related to SLOM Compensation but Mr Evans-Lombe J found for Mr Dent as regards that conflict of evidence. Plainly there was room for dispute as to when Mr Dent was advised by the NFU and hence as to whether he was statute-barred against the NFU. Furthermore, as described by Mr Newton [in a witness statement] it will be the evidence of [the appellants'] Mr Neville that his understanding at the time was that advice about SLOM Compensation was not generally dispensed by the NFU before the end of 1991 or the beginning of 1992. [The appellants] would not be able to test and explore this essential part of the Claimants' case against it, if the judgment of Neuberger J stands."
  46. Mr Croxford recognises that there was evidence before Evans-Lombe J which entitled him to reach that conclusion, but submits that the appellant should be permitted to adduce evidence before the trial judge in this action in order to persuade him to arrive at a different conclusion, and thus in effect to hold that Evans-Lombe J was wrong. He submits that any other approach would be unjust to the appellants who were not present or represented by Evans-Lombe J.
  47. I interpose to observe that in so far as such evidence (including therefore the evidence of Mr Neville) goes to the question of whether there was any breach of duty, there is nothing, as I have already sought to stress, in the judgment of the judge to prevent the appellants from adducing that evidence before coming to trial.
  48. Mr Croxford accepts, in the light of the concession which he made, that if the respondents lost a real chance of recovery they should be entitled to rely upon the evidence of Evans-Lombe J but submits that there is no reason why the appellants should be bound, or effectively bound, by Evans-Lombe J's conclusion that there was a real chance of recovery.
  49. He submits that, on analysis, the question whether the respondents lost a real chance of recovery is a question of causation and thus open before the trial judge, whereas he accepts that, if the chance is held to be real, the quantification of that chance is part of the measure of damages and falls to be determined in accordance with the appellants' concession.
  50. Mr Croxford accepts that the question in a case of this kind is whether the defendants' breach of duty has caused the loss of a chance. He could scarcely do otherwise in the light of the appellants' plea in paragraph 91 of the defence quoted by the judge in paragraph 42 of his judgment as follows:
  51. "If, which is denied, the defendant was in breach of duty to the claimants and if, which is denied, the breach caused any loss, the loss properly described can be claimed as a result thereof, is the loss of the chance to recover greater sums against the NFU than were in fact recovered."
  52. However, Mr Croxford relies upon authorities which show that the exercise of determining causation and loss involves two distinct stages. He relies in particular upon the two stages or propositions identified by Simon Brown LJ in Mount v Barker Austin [1998] PNLR 493 at 510 to 511 and Sharif v Garrett & Co [2001] EWCA civ 126 [2002] 1 WLR 3118 at 3128.
  53. In Mount v Barker Austin Simon Brown LJ id at pages 510 to 511:
  54. "1. The legal burden lies on the plaintiff to prove that in losing the opportunity to pursue his claim (or defence to counter-claim) he has lost something of value, i.e. that his claim (or defence) had a real and substantial rather than merely a negligible prospect of success. (I say `negligible' rather than `speculative' -- the word used in a somewhat different context in Allied Maples Group Ltd v Simmons and Simmons [1995] 1 WLR 1602 -- lest `speculative' may be thought to include considerations of uncertainty of outcome, considerations which in my judgment ought not to weigh against the plaintiff in the present context, that of struck-out litigation.)
    ...
    4. If and when the court decides that the plaintiff's chances in the original action were more than merely negligible it will then have to evaluate them. That requires the court to make a realistic assessment of what would have been the plaintiff's prospects of success had the original litigation been fought out. Generally speaking one would expect the court to tend towards a generous assessment given that it was the defendants' negligence which lost the plaintiff the opportunity of succeeding in full or fuller measure. To my mind it is rather at this stage than the earlier stage that the principle established in Armory v Delamirie [1722] 1 Stra. comes into play."
  55. In Sharif v Garrett & Co Simon Brown LJ, not surprisingly perhaps, repeated the same approach thus in paragraph 38:
  56. "In stating the principles generally applicable to this class of case, I indicated in Mount v Barker Austin ... a two stage approach. First, the court has to decide whether the claimant has lost something of value or whether on the contrary his prospects of success in the original action were negligible. Secondly, assuming the claimant surmounts this initial hurdle, the court must then make a realistic assessment of what would have been the plaintiff's prospects of success had the original litigation been fought out."
  57. Mr Croxford submits that proposition one is essentially a question of causation, whereas proposition four is essentially a question of quantification or measure of damages. He supports that submission, in particular, by a quotation from the judgment of Stuart-Smith LJ in the leading case of Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602 at 1614. After referring to the decision of the House of Lords in Davis v Taylor [1974] AC 207 and quoting a passage from the speech of Lord Reid at page 213 in that case, Stuart-Smith LJ said this at page 1614 C-D:
  58. "In that case [i.e. Davis v Taylor] the court was not concerned to distinguish between causation and quantification of loss. But, in my judgment, the plaintiff must prove as a matter of causation that he has a real or substantial chance as opposed to a speculative one. If he succeeds in doing so, the evaluation of the chance is part of the assessment of the quantum of damage, the range lying somewhere between something that just qualifies as real or substantial on the one hand and mere certainty on the other. I do not think it is helpful to seek to lay down in percentage terms what the lower and upper ends of the bracket should be."
  59. As I have already indicated, Mr Croxford suggests that Simon Brown LJ's proposition one is concerned with causation, whereas his proposition four is concerned with the quantification of the chance and thus of the loss. He therefore submits that the question whether the respondents had a real chance of recovery from the NFU was a question of causation, whereas the quantification of that chance was concerned with the measure of damages. He submits that on the judge's own assessment in paragraphs 39 and 40 of his judgment, or, alternatively, in any event, the question whether there was a real chance of recovery was a matter of causation and thus a matter which the respondents must prove at the trial without assistance from the judgment of Evans-Lombe J.
  60. I recognise that that submission has some force, but for my part I would not accept it. I consider first the judge's analysis. I am not sure whether the point was put in quite this way before the judge, but on a fair view of the judgment, it appears to me that he either expressly rejected the submission or did so implicitly.
  61. In my view the judge drew a distinction between duty, breach of duty, reliance and causation on the one hand and loss on the other. A fair reading of his approach, as set out in paragraphs 39 and 40 of his judgment, seems to me to make clear that what he meant by causation was not whether Simon Brown LJ's first proposition in Mount v Barker was satisfied but whether, as he put it in paragraph 39, particular respondents would have relied on advice which ought to have been given by the appellants.
  62. As I read the judgment, the reference to "duty, breach of duty, reliance and causation" in paragraph 40, which are contrasted with "the measure of damages", are a reference back to the matters specifically referred to in paragraph 39 which I have already quoted. The questions of duty, breach, reliance and causation in that sense were all questions which involved, and involve, consideration of the role of the appellants and its consequences, none of which, so far as I can see, was concerned in any way with the issues which fell for decision by Evans-Lombe J in the NFU litigation.
  63. By contrast, the loss (if any) which flowed from the breach of the alleged duty and the reliance upon it were in a different category. To my mind, the judge made his views clear in paragraphs 42 and following of his judgment which I have already quoted.
  64. In paragraph 42 he identified the appellant's pleading in paragraph 91, which I have already set out twice and will therefore not set out again. However, I will refer again to paragraph 43 where the judge said this by reference to the express terms of paragraph 91:
  65. "Those 'greater sums' are the sums referable to the greater periods of loss which Evans-Lombe J would have held as recoverable by the four claimants against the NFU if they had not been time-barred, in addition to the sums referable to the periods of loss which did not fall foul of the Limitation Act 1980."
  66. It seems to me that on the face of the appellants' pleading or proposed pleading they were saying (as I see it correctly) that the only loss against which the respondents could recover was (and is) the loss of the chance of recovering greater sums against the NFU than were in fact recovered. That seems to me to involve both limbs in Mount v Barker Austin, viz whether any and if so what loss of a chance to recover greater sums against the NFU was sustained. It seems to me that the judge's reasoning in paragraphs 44 to 47 of the judgment, which I have already quoted, supports that conclusion.
  67. To my mind the judge intended to hold (and in fact held) that the question whether any real (and if so what) chance of recovery in the action against the NFU was a question of the measure of damages and not a question of causation, as he used that expression in, for example, paragraph 40 of his judgment. Thus, in paragraph 47, where he expressly referred to the cases including Mount v Barker Austin, he drew no distinction between Simon Brown LJ's first and fourth propositions. I do not think that he intended to draw any distinction between those propositions.
  68. Moreover, while I accept that a distinction can be drawn between propositions one and four on the basis that the first is a matter of causation and the second is a matter of loss, I do not think that that is necessarily so. Thus proposition one may also properly be regarded as part of the quantification of loss and thus of the measure of damages. That is how I think the judge regarded it in the present context and, indeed, how I would regard it.
  69. So, for example, as Mr Randall observed, Mount v Barker Austin was an appeal against an assessment of damages. So too was Sharif v Garrett & Company. The essential question is whether, as paragraph 91 of the appellants' proposed pleading recognises, the respondents have suffered the loss of the chance of recovering greater sums against the NFU than were in fact recovered. That question will often give rise to significant problems, as Neuberger J himself indicated in Harrison v Bloom Camillin [2000] Lloyd's Rep PM 89 at 95 to 96 in a passage approved by Simon Brown LJ in Sharif v Garrett & Company at paragraph 43.
  70. However, in the instant case those problems are much reduced and, in the case of the four lead claimants, all but eradicated because of the trial before Evans-Lombe J. The loss of the chance alleged is not the loss of a chance in a vacuum. It is the loss of a chance of recovery in identified proceedings in the Chancery proceedings which in fact came to trial. The question is what are the chances of the respondents recovering more than they in fact recovered in the proceedings before Evans-Lombe J on the basis that the duty, breach of duty, reliance and causation in the sense identified above are each established by independent evidence.
  71. To my mind, quite apart from the concession, that would involve a consideration (a) of the conclusions in fact reached by Evans-Lombe J and (b) of the conclusions which he would or might otherwise have reached in the light of the conclusions reached on the above question. Absent the concession, the question would be: what conclusions would or might have been reached in order to determine what the chances were of the respondents recovering more than they in fact recovered and, if appropriate, how much more.
  72. As the judge (to my mind correctly) observed in paragraph 46, in the light of the concession, we know what the conclusion the court would have reached in the case of the four claimants.
  73. As I see it the question for the judge at the trial is not what loss a judge would now find was caused by the plaintiffs' breach of duty. The question is (as the appellants concede) what the chances of success were. That does not depend upon a new evaluation of the evidence, but upon what effect the breach had (or would have had) upon a trial which in fact took place. Once it is conceded (to my mind entirely properly) that the court would have reached the same conclusions, absent special circumstances, there is little if any scope for further argument.
  74. The judge said this in paragraphs 56 and 57:
  75. "56 In order to explain why the defendants wish in effect to challenge certain findings made by Evans-Lombe J as to the advice sought from and given by the NFU, and the lead claimants reaction to that advice, Mr Croxford has identified certain points which, he says, cast doubt on the correctness of some of the conclusions reached by Evans-Lombe J in the main judgment. I am unimpressed with those points, essentially for two reasons.
    57 The first, and broader, reason is that it seems to me that, in the present case, where one has both the judgment of Evans-Lombe J and the concession that he would have reached precisely the same conclusion two years earlier on a notional trial (with the exception of the limitation point), then it should require an exceptional case before the defendants should be allowed to mount an attack on that conclusion for the purpose of deciding what the claimants lost as against the NFU. As I have said, on the face of it, the combination of the main judgment and the concession that a notional judgment two years earlier would have been no different, seems to me to mean that there can be no further argument as to the measure of damages so far as the lead claimants are concerned if they succeed on duty, breach of duty, reliance and causation, at least in the absence of exceptional circumstances. During argument, I was concerned as to what sort of `exceptional circumstances' would justify departing from that conclusion, given that the conclusion is one of principle, and one is always a little uneasy in suggesting that a principle may not apply in `exceptional circumstances' without considering what those circumstances might be. To leave the matter on such a loose basis can be said to cast doubt on the principle and/or on the question of whether exceptional circumstances could exist."
  76. I entirely agree. The respondents' case is essentially that once the other ingredients are established the remaining question is essentially one which depends upon what would or might have happened in the NFU action. There might in theory be circumstances in which it could be said that what in fact happened is no guide, as for example if the judge in such proceedings acted capriciously or unreasonably (in a Wednesbury sense) when it could be said that there was or would be a break, as it were, in the chain of causation. But I have seen nothing on the facts which even arguably evidences such a situation. The highest that it can be put is that the appellants would like to adduce evidence (as for example in regard to Mr Dent) which might persuade another judge to arrive at a different conclusion of fact from that in fact reached by Evans-Lombe J. I do not think that such evidence would assist the appellants, because the question is: what are the chances of the court arriving at a different conclusion? That depends upon a consideration of the approach in fact adopted by Evans Loam J.
  77. In all the circumstances I have reached the clear conclusion that the judge was right for the reasons he gave so far as the four lead plaintiffs are concerned.
  78. THE REMAINING CLAIMANTS

  79. As to the remaining claimants, the position is entirely different. There it is, as I understand it, accepted that the judge made no specific findings, as he did in the case of the lead plaintiffs. Those claimants will therefore have to prove their case by admissible evidence in the ordinary way. I do not read the judgment of the judge as prejudging any of the questions which will arise as between these claimants and the appellants. I understand that to be accepted by counsel on both sides, although I hope I will be corrected if I am wrong.
  80. I do not disagree in any way with the approach identified by the judge and discussed by him in paragraphs 64 and following of his judgment. However, essentially the issues in those cases are at large. I have every confidence that Neuberger J will be able to resolve them at the trial if settlement proves impossible.
  81. OTHER ISSUES

  82. A number of other matters were raised in the skeleton arguments on each side. But, having regard to the course taken during the oral argument, I do not think that it is necessary for us to say anything about them.
  83. CONCLUSION

  84. In conclusion, I agree with the judge for the reasons he gave. The only alteration that I would suggest to the order is that the words "but not otherwise" be added after the words "in these proceedings" in paragraph 1(1). So the first line would read: "For the purpose of proving their losses alleged in these proceedings but not otherwise". I only propose that by way of clarification. It appears to me that the order would have the same meaning even without that addition.
  85. Finally, I express the hope that it may be possible for this dispute to be settled without a trial; but, for the reasons I have given, I would dismiss the appeal.
  86. LORD JUSTICE SCOTT BAKER: I agree.
  87. LORD JUSTICE PETER GIBSON: I also agree. I would pay tribute to the careful judgment of the judge and to the helpful arguments of counsel on both sides on this appeal and their constructive approach.
  88. Order: Appeal dismissed with costs, subject to detailed assessment. The Appellants to make an interim payment of 30,000 within 14 days.


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