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	England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Denning v Greenhalgh Financial Services Ltd [2017] EWHC 143 (QB) (02 February 2017) URL: http://www.bailii.org/ew/cases/EWHC/QB/2017/143.html Cite as: [2017] EWHC 143 (QB)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		02/02/2017

MR JUSTICE GREEN :

A. Introduction

1. There is before the Court an application pursuant to CPR 3.4(2)(a) that the Claimant's claim be struck out and judgment granted in favour of the Defendant upon the basis that the amended Particulars of Claim disclose no reasonable grounds for bringing the claim. There is further an application pursuant to CPR 24.2(a)(i) to award summary judgment to the Defendant upon the whole of the claim upon the basis that it has no real prospect of success and that there is no other compelling reason why the case should be disposed of at trial.
2. The claim concerns an allegation of professional negligence on the part of Greenhalgh Financial Services Limited ("GFS") upon the basis that GFS was in breach of a professional duty (in tort and/or contract) owed to the Claimant by not performing a detailed review of pension transfer advice given to the Claimant some eight years earlier by unrelated advisers. It is alleged that GFS breached its duty by failing to conclude that the advice given previously, by the unrelated advisers, was defective and by not in consequence advising the Claimant to pursue a complaint or claim against those former advisers and by not including advice about applicable limitation periods.
3. GFS seeks to strike out and/or summarily dismiss the claim upon the basis that there is no real prospect of the Claimant establishing that GFS owed or breached any of the duties pleaded. Further, that there is no real prospect of the Claimant establishing that any breach of duty on the part of GFS that was established caused him any loss. Finally, that in any event there is no real prospect of the Claimant establishing causation between any breach and any loss that was sustained by him.

B. The Relevant Facts

(i) The Blue Circle Occupational Pension: The August 2000 advice

4. The Claimant worked for Blue Circle Industries Plc ("Blue Circle") until 1994. During his period of employment with Blue Circle he acquired benefits in its final salary pension scheme. He then retired from Blue Circle and commenced a consultancy business.
5. In or about August 2000, then aged 55, the Claimant instructed Alexander Forbes Financial Services Limited ("AF") to provide advice in relation to the transfer of his deferred benefits from the Blue Circle final salary scheme (hereafter "the Occupational Pension") to a personal pension plan with Scottish Equitable (hereafter "the Personal Pension"). The detailed advice given by AF dated 12^th August 2000 was before the Court. The Claimant was advised of the options available to him. These included: leaving his pension benefits as a paid-up pension and remaining in the Occupational Pension; and/or transferring the cash equivalent to the Claimant's paid-up pension to a Personal Pension Plan or to an alternative personal contract (known as a Section 32 Buy-Out Plan). Insofar as the Claimant intended to move to new employment a further option was set out which involved transferring the cash equivalent of his paid-up pension to the new employer's pension scheme, assuming the existence of a suitable scheme. It was recognised however in the advice that given that the Claimant was not seeking fresh employment this particular option was not appropriate to him.
6. In relation to the transfer alternative (the option ultimately chosen by the Claimant) it was explained that when considering the transfer of pension benefits the most important aspect was whether such a transfer was likely to produce a higher pension at retirement age than the preserved benefits under the Occupational Pension: This was the "critical yield", i.e. the minimum amount of annual growth in a new scheme needed to match the existing benefits. The letter stated:

"To replace the above benefits provided by your former scheme to either a Personal Pension or Section 32 Buy-Out Plan, annual growth would be required of… 5.74% per annum to replace the pension benefits at retirement date of 62 into a Personal Pension Plan or Section 32 Buy-Out Plan. We do not consider that a critical yield of 5.74% pa to be excessive to match the benefits at age 62. If the average investment return following the transfer is in excess of this figure, then the likely pension benefits available at retirement may be higher than those from the former scheme. Conversely, lower investment returns will result in smaller benefits than the former scheme would have provided."

7. The advice continued to explain how the critical yield was calculated and as to the relevant assumptions used. These related to: annual annuity rates; national average earnings; the retail price index; and, the Limited Price Index. The assumptions were those determined by the Personal Investment Authority ("PIA").
8. In section 5 of the advice AF recommended that the Claimant: "… proceed with a transfer of your benefits into a Personal Pension Plan insured with Scottish Equitable who satisfy our core criteria of: financial strength, flexibility of contract, investment performance, competitive level of charges". The recommendation was that the investment return required to match the former scheme benefits of 5.74% pa was achievable over the longer term. AF recommended investing into Scottish Equitable's range of internal and external pension funds with the split of funds to be discussed and agreed at a meeting between AF and the Claimant. The advice emphasised that the Claimant needed to consider all relevant factors including the risks associated with transferring a guaranteed pension to a personal contract. It was emphasised that the advice, namely that a transfer was desirable, depended entirely upon the assumptions made.
9. Further advice was given on the 29^th August 2000. The letter included the following:

"Further to my report to you dated 12 August 2000 we talked through the issues relating to the potential transfer of benefits from Blue Circle and concluded that benefits at retirement, flexibility and control of 'your fund' and the issues on death all made the for the transfer to proceed. We discussed the loss of the 'guarantees' involved in the Blue Circle arrangement and accept that the benefits on transferring will outweigh these matters."

(ii) Transfer to Scottish Equitable – The First Transfer

10. A pension Transfer Value Analysis ("TVA") was prepared for the Claimant by Scottish Equitable on the 7^th August 2000.
11. Over the course of the next few years AF provided the Claimant with information about the performance of the Personal Pension. These reports establish that the Personal Pension was not achieving the critical yield of 5.74%. Data relating to movements in the FTSE show that following the events of "9/11", the market plummeted and it took some time for losses sustained at that time to be recovered.
12. On the 27^th October 2004 the Claimant wrote to AF in relation to the Personal Pension. The Claimant reminded AF that when the investment fund was set up in 2000 it assumed an annual growth rate of 5.74% to keep pace with the Occupational Pension. The Claimant stated:

"However, you will appreciate my concern that it seems for the past year the returns on investment were 1.79% for the protected fund and 3.49% for the portfolio of investments, with only Property showing significant growth of 15.78%.

The investment in September 2000 was £454,094 and four years on at £434,050 we have almost recovered the value of the original investment. At 5.74% per annum the fund should be in excess of £550,000."

13. Similar expressions were concerned to AF in a letter dated the 28^th January 2005. The Claimant referred to a "disappointing return on investments, some of which even produced a loss. You will be well familiar with the stories". The Claimant also observed that the Scottish Equitable fund was "… today almost back to the starting point of the investment five years ago". The Claimant stated that he recognised that "the prospects today for investment growth are far better". The Claimant sought an improved flow of information on investment performance from AF.
14. Further detailed concerns were sent by the Claimant to AF in an email dated the 23^rd May 2006. In this email he expressed the concern that the Personal Pension had achieved an actual return of approximately 3.2% over the course of the six years since it was set up. Towards the end of the email the Claimant stated as follows:

"I remain concerned having reviewed the year by year figures why the underperformance against the 5.74% target was not brought to my attention before with recommendations and would appreciate your comments on how the portfolio matched the original investment criteria and what immediate action is needed to recover the situation. I cannot recall that personal attitude to investment risk was discussed at the time of original funds transfer as being a factor for determining whether the 5.74% could be achieved. At that time it was considered to be a conservative return."

(iii) Transfer to Standard Life – The "Second Transfer"

15. In February 2007 the Claimant met with AF to review his present circumstances to enable the Claimant to plan for retirement. Various options were explained to the Claimant. A recommendation in the form of a Report of 4^th February 2007 entitled "Retirement Planning Report for Mr & Mrs Denning" was prepared. The advice was for an investment in a "Phased Unsecured Income Plan". This would enable the Claimant to draw a particular sum from the Plan to repay a mortgage and perform certain works on his property leaving him with a flexible position regarding income withdrawals and future capital withdrawals. A recommendation was made that the Claimant transfer existing arrangements (the Personal Pension and an executive pension plan with Standard Life, unconnected to the Occupational Pension) to a phased retirement plan with Standard Life ("the Standard Life Plan"). I refer to this as the "Second Transfer".

(iv) The instructing of GFS – The scope of the retainer

16. In August 2008 the Claimant, remaining dissatisfied with the service provided by AF, instructed the Defendant, in place of AF to provide advice on the management of his investments. The Claimant arranged to meet a Mr Ged Mason of the Defendant. In preparation for that meeting he sent to Mr Mason a copy of a letter of advice he had received from AF dated the 11^th April 2008. The Claimant considered that this would be "helpful" before the meeting. The enclosed letter of advice from Mr Ian Randon of AF was current and prospective in that it advised the Claimant upon the basis of his "current circumstances and objectives". It set out the Claimant's then position and his imminent retirement. It recorded the Claimant's desire "given the recent turmoil in the financial markets" to clear outstanding mortgages in order to safeguard against any further market falls reducing the sums available to redeem the mortgages. It set out the Claimant's stated needs for future living expenses. It provided a warning as to the dangers of drawing benefits from existing pension arrangements. It provided advice upon death benefits. And it advised the Claimant that he was "crystallising a large proportion of [his] lump-sum at a relatively low point in the market".
17. It is common ground between the parties that the Claimant did not instruct Mr Mason to review the First Transfer. The Claimant was requested to, and did, sign a "Client Agreement" which expressed the retainer of GFS. Under the heading "Our Services" the retainer stated as follows:

"Greenhalgh Financial Services Ltd is permitted to advise on and arrange deals in investments and contracts of insurance. Once we have given advice or arranged transactions for you these will not be kept under review but we will advise you upon your request. We may contact you in the future by means of an unsolicited promotion (i.e. where you have not expressly requested it) should we wish to contact you to discuss the relative merits of an investment or service which we feel may be of interest to you. Unless an existing fee agreement is in place, the basis of our remuneration will be agreed with you at the time further services are agreed."

Elsewhere in the Agreement, under the heading "How we charge you for our services", it was explained that normally GFS derived income from fees paid, or commissions paid to them by product providers. Elsewhere in the Agreement, under the heading "Investment objectives and restrictions", it was stated that following the issuance of the Agreement "... any subsequent investment advice offered to you will be based on your stated investment objectives, acceptable level of risk and any restrictions you wish to place on the type of investments or policies you are willing to consider". The retainer agreement was signed by the Claimant and his wife on the 27^th August 2008.

18. Of some significance is a further "Fee Agreement" signed by the Claimant on the 30^th March 2011 which set out the basis upon which GFS provided services to the Claimant and which made the point that GFS was not authorised or qualified to give legal advice. The Agreement provides as follows:

"It should be read in conjunction with our Client Agreement and Key Facts about our Services and Costs already provided to you. We may require you to provide us with relevant information, to enable us to provide the service requested by you. We are not authorised or qualified to give legal advice or to prepare legal documents for you. Should further work be required outside this fee agreement, a fresh letter will be issued, so no misunderstanding cannot arise between us. This fee agreement will continue until terminated, by notice given in writing by either you or us. Termination shall take place without penalty, subject to any outstanding fees being paid. All moneys received up to this point will remain the property of the firm."

19. I should at this juncture in the context of considering the scope of the GFS retainer refer to an email exchange between Mr Mason and the Claimant on the 3^rd September 2008. In an email dated the 3^rd September 2008 the Claimant updated Mr Mason about a complaint he had made to AF about the advice given to him (see paragraph [22ff] below). The Claimant stated as follows:

"This situation appears to be of my concern with AF as an independent pensions advisor, their lack of monitoring progress (no data) against a percentage return expectation that they set last year and why did they advise all investment to be placed with IS that they own. Also despite my concerns re Property Investment of Jan 07 they recommended an increase to 25% in IS fund.

By now you are likely to have a 'feel' for the pensions situation of my wife and I. I would appreciate your advice on response from AF. If I have to pay for the situation to be reviewed then presumably these costs are recoverable from AF. As an alternative could I simply give a list of concerns to a Pensions Ombudsman?

Would appreciate your thoughts please."

20. Mr Mason replied that same day. He recommended a meeting once he had received data from Standard Life. Mr Mason refers to the "blue folder" that the Claimant had provided to him. Mr Mason observes that it is evident from the blue folder as to the reasons why internal funds were selected. I would simply observe at this stage that the advice being sought by the Claimant from the Defendant as to the position of AF did not concern the merits of the advice given by AF in 2000 leading to the First Transfer.
21. On the 8^th September 2008 Mr Mason sent an email to the Claimant setting out a series of bullet points which he hoped would form the "basis of our initial review of your arrangements". It is apparent from the bullet points that the review was present and prospective only and there is no focus upon the Claimant's historical problems with AF. It involved clarifying charges under the existing plans; determining whether the Claimant was comfortable with the level of risk involved; obtaining fund information in order to compare this with funds available within a SIPP; clarifying short to medium term plans; considering income needs along with State Pension entitlements; and considering future monitoring of returns with timescales to be agreed, etc.

(v) Complaints made by the Claimant to AF

22. I have referred above to the Claimant's dispute with AF. Prior to the point in time at which the initial review conducted by the Defendant of the Claimant's financial position was complete, the Claimant had already complained to Mr Randon of AF with regard to its performance. By an email dated the 1^st September 2008 the Claimant complained, inter alia, of delays on the part of AF in actioning a draw-down request under the Standard Life Plan, about a lack of annual reviews, and as to the extent to which the Standard Life Plan was exposed to investments in property and a failure to monitor that exposure. He also notified AF that he was instructing a new financial adviser.
23. AF sought full particulars of the Claimant's complaint. On the 2^nd October 2008 the Claimant sent a detailed letter to the Compliance Administrator at AF. By this point in time the Claimant had been informed that a full review would be conducted by AF's investigating officer, Mr David Price. The Claimant divided his complaint into six different headings. In summary these were as follows. First, a failure to implement a draw-down request for the end of May 2008 leading to financial loss. Second, a complaint that fees were paid by Standard Life to AF for an annual review in accordance with Government Guidance but in circumstances where the review was not performed. Third, the increase in the percentage of the fund being invested in property, upon a rebalancing of the portfolio, which took the percentage to 25% despite the Claimant's reservations having already been expressed to AF. Fourth, an alleged failure to monitor effectively the performance of the Claimant's investment and to provide ongoing advice. Fifth, the decision for draw-downs to be taken across all funds rather than those which were under performing. Sixth, the decision taken whereby former Scottish Equitable/Standard Life funds had been reinvested exclusively in Investment Solutions Limited funds which were wholly owned by AF in circumstances where it had not been explained to the Claimant that Standard Life were only "caretakers". Of some significance to the present case is the following observation made by Mr Denning in the complaint under the heading "Monitoring of Investment Performance and Advice". Mr Denning made clear his concern as to a perceived lack of transparency as to investment performance over the period from 2000 onwards. He stated as follows: "Your records will show my concern for data access over some time and so by way of example please see my email of 23 May 2007 and the data sheets referred to. I simply have no clear guide to investment performance over the entire period since transfer of funds on 19 September 2000. My 23 May 2007 email refers to disappointment that investment performance has not matched the original Critical Yield expectation of 5.74% and that under performance had not been brought to my attention with recommendations".
24. Notwithstanding this reference to a lack of transparency since 2000, there is no complaint about the original advice to transfer funds from the Occupational Pension to the Pension Plan. The complaint is entirely about the performance of AF in relation to the Scottish Equitable fund (the Second Transfer), not the original decision to transfer funds to Scottish Equitable (the First Transfer). It is also of some significance that at the conclusion of the letter of complaint the Claimant explained that the comments in his letter explained some of his "main concerns" explaining why he had appointed a new financial adviser to replace AF. He then added the following acknowledging that "9/11" was an unforeseeable event when the First Transfer occurred:

"The original appointment in the year 2000 was against an expectation of the Critical Yield of 5.74%. The downturn following 9/11 could not have been foreseen but in 2006 the fund was rebalanced and moved to make up lost ground with an expectation of a 6.65% return. I have received no ongoing advice on performance or recommendations for change in relation to falling returns and changing market conditions."

25. In a letter dated the 28^th October 2008 AF accepted that it had delayed in actioning the draw-down request and AF agreed to compensate the Claimant. However it rejected the other complaints made.
26. On the 3^rd November 2008 the Claimant sent to Mr Mason, of the Defendant, copies of his complaint letter to AF dated the 2^nd October 2008 and the response of AF dated the 28^th October 2008. The letter stated: "Judith and I look forward to your further advice". In none of this correspondence was any reference made to concerns about the First Transfer.

(vi) Complaint to Financial Ombudsman service

27. In April 2009 the Claimant referred his complaint against AF to the Financial Ombudsman Service ("the FOS"). In the complaint form the Claimant stated that no solicitor was complaining upon his behalf. The gist of the complaint was in relation to "errors made and defective investment advice of an independent financial advisor". The advice the subject of the complaint was said to have been given on 19^th March 2007. The Defendant is not referred to in any capacity, for instance as an on-going adviser in relation to the complaint. There is before the Court correspondence passing between the Claimant and the FOS between 2009 and 2012. It is not necessary to refer to it all. However there are a number of milestones which I should refer to. On or around the 29^th September 2010 a FOS Adjudicator issued a non binding adjudication criticising the advice given by AF in relation to the Second Transfer in 2007. The view of the Adjudicator was that a phased retirement approach was not "unsuitable" for the Claimant but that the transfer from the Scottish Equitable Phased Retirement Plan to a similar product was not justified given that the existing Scottish Equitable plans could have met the Claimant's needs for tax free cash and income if required. The Adjudicator, in summary, concluded that AF's advice to transfer all pension plans was unsuitable because, inter alia: the Scottish Equitable Plan could have facilitated income draw-down with lower charges with a wide fund range; and the transfer involved unnecessary and avoidable commission payments.
28. The Adjudicator concluded that the complaint should succeed and a loss assessment be undertaken to establish whether the Claimant had suffered a financial loss by virtue of the transfer.
29. Towards the end of 2010 or early in 2011 the Claimant raised with the FOS for the first time concerns he now had in relation to the advice given by AF that resulted in the First Transfer. He was requested to, and did, complete a pension transfer questionnaire on the 10^th February 2011. On the 8^th November 2011 a FOS Ombudsman issued a Provisional Decision which upheld the earlier decision in relation to the Second Transfer but concluded that the complaint concerning the First Transfer should be rejected. The Ombudsman stated:

"Mr Denning's original complaint was about the issues surrounding the transfer of his existing Scottish Equitable and Standard Life Plans to the new Standard Life Income Drawdown Plan. He then raised additional issues about the lack of review in regards to the requirement of his pension funds to match the critical yield originally required when he transferred his final salary scheme.

Mr Denning acknowledged that he did require the flexibility of the Phased Pension Plan when the (new) Adjudicator explained the high risk of transferring the funds at age 56. I therefore consider that Mr Denning's main priority was to have flexibility to allow him to phase his benefits in line with his need to work. Whilst I agree that the transfer did present a risk it seems that Mr Denning was willing to give up the valuable guaranteed benefits offered by his existing Final Salary Scheme in order to take control of his pension benefits and utilise the flexibility the Plan offered and which Mr Denning required.

Therefore I am of the opinion that a Phased Retirement approach was not unsuitable for Mr Denning. However I do not see why he then had to transfer his existing Phased Pension Plan with Scottish Equitable to another, similar, Plan to access the benefits he required."

30. AF did not accept the Provisional Decision of the Ombudsman in relation to the Second Transfer and made additional submissions in relation to the First Transfer. On the 1^st May 2012 the Ombudsman issued a detailed Second Provisional Decision upholding the complaint in relation to the Second Transfer in part but making no award in respect of it upon the basis that there was no financial loss. However he continued to reject the complaint in relation to the First Transfer reiterating the earlier conclusion that it had not been unsuitable.
31. Further representations were then made by the Claimant which addressed a number of matters including the data relied upon by the Ombudsman to the effect that the Claimant had suffered no loss in relation to the Second Transfer. In relation to the First Transfer AF now submitted that in any event the Ombudsman did not have jurisdiction upon the basis that the complaint had been made outside of the time limits applicable to the referral of complaints in accordance with the FSA Handbook Rule DISP 2.8.2R.
32. The Final Decision of the Ombudsman was issued on the 25^th September 2012. The Ombudsman referred to the "inquisitorial" jurisdiction of the FOS. The Ombudsman concluded that the Claimant had raised his complaint about the First Transfer by a letter to the FOS dated the 30^th November 2010 which was more than six years following the First Transfer and the advice complained of and that the Claimant knew or ought to have known that he had cause for complaint by May 2006 at the latest in the light of his exchange of emails with AF at that time (see e.g. paragraph 14 above) which was more than three years prior to his complaint about the First Transfer. The Ombudsman stated:

"I remain of the view that the complaint about the original final salary transfer was not made within 3 years of when Mr Denning became aware (or ought reasonably to have become aware) that he had cause for concern and that this part of the complaint is therefore outside our jurisdiction."

33. With regard to the Second Transfer the Ombudsman upheld the complaint insofar as the Transfer was unsuitable but rejected it upon the basis that there was no loss and it was therefore inappropriate for the Ombudsman to make an award.

(vii) Proceedings against AF in the High Court: The application for pre-action disclosure

34. On the 11^th January 2013 solicitors acting for the Claimant brought proceedings against JLT Consultants and Actuaries Limited ("JLT"), who had by then acquired AF. A Letter of Claim pursuant to the Professional Negligence Pre-Action Protocol was issued. The letter set out a summary of the Claimant's claim which included an allegation that advice given to the Claimant in or about August 2000 was negligent because, inter alia, the transfer of 21 years service from a Final Salary Scheme at age 56 when there were only six years to the proposed retirement age of 62 represented a significant risk even given that the critical yield required to match the benefits provided by the existing scheme was relatively low at 5.74%. In the circumstances of the market a yield of 5.74% pa was necessary to even match the benefits available under the Occupational Pension but: "such a level of average annual return was never going to be achieved, particularly over a six year time span". The calculations set out in the letter of advice provided by AF of the 12^th August 2000 contained, it was said, erroneous and false assumptions and the advice ultimately given was negligent in a number of respects. The Letter set out the Ombudsman's Final Decision. The Letter then stated that the Claimant would not be in a position to proffer a detailed analysis until such time as JLT had provided complete copies of papers relating to the original advice (i.e. the First Transfer), including full internal file documentation in relation to the subsequent investigation into the Claimant's complaints in September/October 2008 and all exchanges of correspondence between AF and the FOS and, finally, copies of all calculations in 2000 or 2008 comparing the benefits payable under the Occupational Pension with those potentially payable under the Personal Pension. A further letter was sent on the 15^th February 2013 and an email was sent on the 19^th February 2013.
35. On the 20^th February 2013 JLT replied pointing out that the issues purporting to form the basis of the Claimant's claim were time barred. JLT declined to provide any pre-action disclosure.
36. The Claimant applied to the High Court for pre-action disclosure. This application succeeded in part. However, subsequently all claims against JLT/AF were abandoned upon the basis that the Claimant now acknowledged that the claims were ultimately likely to fail because of limitation.

(viii) The claim against GFS

37. On the 19^th September 2014 solicitors acting for the Claimant sent a Letter of Claim to the Defendant alleging negligence upon the basis: that GFS was aware from the outset of the retainer alternatively by September/October 2008 at the latest that the Claimant had been a member of the Occupational Pension until August 2000; that he had transferred his pension to the Personal Pension in August 2000 upon the basis of advice from AF; that the pension needed to achieve a critical yield of 5.74% pa to match the benefits under the Occupational Pension; that such critical yields had not been achieved; and that the Claimant was concerned about AF's performance in order to ensure that the actual investment returns matched the percentage expectations originally set. In these circumstances as at August/September 2008 (when GFS was instructed) the Claimant was unaware that there was a potential claim against AF that the original pension transfer advice was negligent. This was or should have been obvious to a reasonably competent independent financial advisor such as GFS in view of the facts and matters then known. GFS should have alerted the Claimant of the need to investigate the possibility of negligent advice. Had this occurred the Claimant would have been keen to investigate the matter further and would have instructed the Defendant to conduct a full review and this would have enabled the Claimant to have raised the matter with the FOS in a manner which would not have been time-barred. Further the Claimant would have discovered in 2008 that the advice given to him earlier by AF was indeed negligent and he would have taken steps to preserve a claim in law if necessary with the assistance of solicitors. The Claimant had thus lost an opportunity to pursue a claim in negligence against AF by reason of such a claim becoming time-barred whilst "on your firm's watch, i.e. during the period your firm was retained to advise upon, and look after, our client's pensions interests".
38. On the 16^th December 2014 the Defendant responded with a detailed rebuttal of the claim denying liability.

C. The Particulars of Claim

39. Proceedings were issued on the 15^th December 2014. A Defence was served on the 2^nd July 2015. An Amended Particulars of Claim was issued on the 13^th January 2016 adding new factual matters. An Amended Defence was served on the 12^th February 2016. In the Amended Particulars of Claim the Claimant explains why he decided not to pursue his claim against AF. In paragraph [31] of the Amended Particulars of Claim the Claimant explains: "The Claimant did not issue proceedings against AF because the view was taken that the claim was likely to be held to be time-barred, because the said arguments of AF had considerable force".
40. The claim against GFS alleges that it acted negligently and in breach of a duty or implied duty in contract and tort to provide its services with reasonable care and skill. The claim may be summarised shortly as follows. First, advice given by AF in August 2000 was negligent. Second, GFS negligently failed to review the advice given by AF concerning the First Transfer and to advise on a potential complaint/claim in respect of that advice, and also negligently failed to advise the Claimant that delay on his part could cause a complaint or claim against AF to become time-barred. Third, but for the negligence of GFS the Claimant would have issued proceedings against AF in or about late 2008 and would have recovered substantial damages from AF. Fourth, the alleged breaches occurred when GFS was first instructed in 2008.
41. The Defence of GFS may be summarised in the following way. First, with regard to duty GFS owed no duty to advise the Claimant upon the merits of the advice given to him by AF in August 2000. This advice was approximately eight years prior to GFS being instructed. It concerned a transfer which was irreversible and which had no relevance to the pension arrangements upon which GFS was instructed to advise. The AF advice was in any event substantially based upon information and evidence which the Claimant did not have at the time of his initial discussions with GFS so could not have been provided to GFS. Further, GFS owed no duty to advise the Claimant about possible legal action against AF or limitation periods. Second, with regard to loss, if GFS was in breach of any duty owed to the Claimant it caused no loss to him. Any advice of the kind alleged would not have caused him to act differently. Even if he had commenced a claim against AF in late 2008 it would not have had any prospect of success including, inter alia, because it would have been time-barred. Third, as to causation, and in any event, even if GFS had advised the Claimant and the Claimant had acted upon that advice he would have done as he later did, by including the First Transfer in his complaint to the FOS and the outcome would have been the same, i.e. the complaint would have been dismissed and any subsequent civil claim would have been met with a limitation defence which the Claimant now accepted was unanswerable. Fourth, and finally, any recovery against AF would have been limited by the financial limit of the FOS jurisdiction which was then £100,000.

D. Relevant Legal Principles: Summary Judgment / Strike-Out

42. The principles governing the strike-out application pursuant to CPR 3.4(2)(a) and a summary judgment application under CPR 24.2(a), were not in dispute. Mr Hough QC for the Defendant, summarised them in the following way and Mr Munro did not challenge this articulation:

"36. The strike-out application is made under CPR 3.4(2)(a), on the basis that the relevant sections of the Amended Particulars of Claim disclose no reasonable ground for the claim. In other words, the claim is not legally tenable on the basis of the facts pleaded. If a strike-out application raises a point of law which can properly be dealt with in the application so as to dismiss a claim or defence, it is appropriate to exercise the power: see Price Meats Ltd v Barclays Bank plc [2000] 2 All ER (Comm) 346.

37. The summary judgment application is made under CPR 24.2(a), on the basis that Mr Denning has 'no real prospect of succeeding' in his claim. The principles governing such applications will be familiar to the Court. In brief:

(a) The power to make summary determinations is a 'very salutary' one which allows the Court to save costs and delay by resolving points early. See Swain v Hillman [2001] 1 All ER 91 at 92.

(b) The question for the Court is whether the respondent to the application has a real as opposed to fanciful prospect of success. The respondent's argument must 'carry some degree of conviction': ED&F Man Liquid Products Ltd v Patel [2003] EWCA 472.

(c) A summary judgment application is not meant to be a substitute for a trial where one is justified (Swain at 95). However, 'that does not mean that a court has to accept without analysis everything said by a party in his statements before a court' (ED&F at para. 10). In particular, it may sometimes be "clear that there is no real substance in factual allegations made" (ibid.).

(d) In determining the application, the Court is entitled to take into account further evidence which may realistically be available at trial (Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550 at para.19).

(e) However, a claim should not be allowed to proceed to trial based on Micawberish speculation that something may turn up. See: ICI Chemicals & Polymers Ltd v TTE Training Ltd [2007] EWCA Civ 725 at paras. 12-14."

E. Ground 1: Scope of the Duty

(i) The issue

43. The first issue that I consider concerns the scope of the duty owed by GFS to the Claimant. The Defendant denies that it owed any duty in tort or contract to the Claimant to advise on the First Transfer. The Claimant however relies upon authority establishing that a professional may owe a duty to give advice outside the scope of a retainer if, in the course of performing the retainer, the professional comes upon information which would lead any competent professional to perceive and advise upon a legal risk. The Claimant cites in this regard Credit Lyonnais SA v Russell Jones & Walker [2002] EWHC 1310 ("Credit Lyonnais") per Laddie J. The facts of that case were as follows. In August 1991 Credit Lyonnais concluded a 25 year lease of business premises. In 1994 the defendants were instructed as Credit Lyonnais' solicitors in relation to the exercise of a break option in the lease. The solicitors failed to advise Credit Lyonnais that the payment required under the break clause was a condition precedent and was time critical. In consequence the option was foregone and Credit Lyonnais had to buy its way out of the lease on the best terms available. It was common ground that the solicitor acting was a commercial and not a property lawyer. The defendants argued that the retainer was very narrow and did not include instructions to provide advice upon the meaning of the relevant clause or the law on conditions precedent in tenant's options. Credit Lyonnais, however, argued that the express retainer was sufficiently wide to incorporate advice on how to ensure the break option was complied with. In any event it was argued that any competent property solicitor would have drawn the attention of the client to any substantial risk of which they should have become aware. The Court sided with the claimant. It was emphasised that although a solicitor was under no general obligation to expend time and effort upon issues outside the scope of the retainer if, in the course of doing that for which the solicitor was retained, he became aware of a risk or potential risk it was his duty to inform the client. If in the course of performing his instructions within his area of competence a lawyer noticed or ought to have noticed a problem or risk for the client, which it was reasonable to assume the client did not know about, the lawyer was required to warn the client. It is argued for the Claimant that this then applied to professional advisers generally and beyond just solicitors.
44. Mr Munro, for the Claimant, contends that the scope of the retainer accepted by GFS was sufficiently broad to impose upon that firm the duty to advise and warn the Claimant of possible negligence arising in relation to the First Transfer. To support this contention he relies upon the fact that the Claimant asked Mr Mason to review his pension arrangements "generally". And further that in Mr Mason's email to the Claimant of the 3^rd September 2008 he refers to Mr Mason having reviewed the papers in a "blue folder". It is said that this blue folder included the two letters of advice provided by AF in August 2000 (see paragraphs [19] – [21] above).
45. The Claimant also relies upon the expert evidence of a Mr Adam Samuel to the effect that any reasonably competent independent financial adviser in the shoes of GFS would have advised the Claimant at the outset of the retainer promptly to investigate a potential claim in respect of the First Transfer and to make such a claim as soon as possible. Mr Munro expresses the opinion that if this advice had been given the Claimant would have followed it and this would have led to the issuance of a claim in or about late 2008 against AF in respect of the 2000 advice. Any investigation into the advice would have revealed that the 5.74% critical yield figure had no rational foundation and was wrong and that it was unsuitable for the Claimant to relinquish the guaranteed generous benefits of the Occupational Pension. The Defendant's negligence therefore, it was argued, caused the Claimant the loss of a chance to bring a claim in or about late 2008 against AF.
46. In my judgment the Defendant owed no duty to the Claimant and the Amended Particulars of Claim disclose no reasonable ground for the claim. Further the claim has no real prospect of succeeding. I set out my reasons below. I start by considering the case law.

(ii) Relevant case law

47. It is well established that, prima facie, the extent of any professional duty depends upon the terms and limits of the retainer. In Midland Bank Trust Co Limited v Hett Stubbs and Kemp [1979] Ch 384 at page [402] Oliver J stated as follows:

"The expression 'my solicitor' is as meaningless as the expression 'my tailor' or 'my bookmaker' in establishing any general duty apart from that arising out of a particular matter in which his services are retained. The extent of his duties depends upon the terms and limits of that retainer and any duty of care to be implied must be directly related to what he is instructed to do.

… [The] court must beware of imposing upon solicitors – or upon professional men in other spheres – duties which go beyond the scope of what they are requested and undertake to do."

48. In Pickersgill v Riley [2004] UKPC 14, the Privy Council, in a judgment delivered by Lord Scott, stated that the normal rule was that a solicitor was under no duty to advise a business client as to the financial wisdom of a contemplated transaction beyond the scope of a retainer. In paragraph [7] Lord Scott observed that it was "plain" that when a solicitor was instructed to act in a transaction a duty of care arose but it was also "plain" that the scope of the duty was variable and would depend, first and foremost, upon the content of the instructions given to the solicitor by the client and also on the "particular circumstances of the case". The Privy Council endorsed an observation in Jackson & Powell on Professional Negligence (5^th edition, 2002) which it was said correctly stated a position: "In the ordinary way a solicitor is not obliged to travel outside his instructions and make investigations which are not expressly or impliedly requested by the client".
49. In JP Morgan Bank v Springwell Navigation Corp [2008] EWHC 1186 (Comm) at paragraph [474] Gloster J stated that it was common ground that in determining whether the circumstances were such as to impose a duty of care an important factor was the way in which "… the parties have sought to regulate their relationship, and to allocate risk, by contract". Where the parties had contractually defined the terms upon which they would conduct business then that would "in the normal case" provide a clear and often determinative indication as to the non existence of a wider tortious duty.
50. In Mehjoo v Harben Barker (a firm) [2014] EWCA Civ 358 at paragraph [24] Patten LJ observed that there is no such thing as a "general retainer" and the terms and limits of a retainer and any consequential duty of care depends upon what the professional is instructed to do. He observed that an accountant, the professional whose conduct was impugned in that case, was not therefore "… under a general roving duty to have regard to and to advise on all aspects of the claimant's affairs absent a request to do so". In paragraph [69] Lewison LJ endorsed the "wise words" of Oliver J in Midland Bank (ibid). He observed, in relation to the facts of the instant case: "it was impermissible for the Judge to infer from the limited occasions upon which [the accountant] pursued a line of inquiry beyond the strict limits of his retainer that there had been a far reaching (but silent) variation of the retainer, which had the effect of imposing an open-ended and apparently limitless duty upon [the firm]".
51. In the present case it is not said that in relation to the provision of prospective advice to the Claimant that the Defendant was negligent. This is not a case, therefore, where it is said that the common law duty of a professional to provide prospective advice with the skill and care of an ordinary competent member of the profession has been breached: see for example Saif Ali v Sidney Mitchell and Co [1980] AC 199 at page [220D]. In the present case it is said that the retainer was expanded or broadened by reference to the circumstances referred to above to cover advice given eight years earlier. The case law cited above emphasises that in both contract and tort the four corners of the retainer are, at least ordinarily, likely to be dispositive.
52. As noted in paragraph [43] above reliance is placed upon the judgment in Credit Lyonnais (ibid). This establishes that, in unusual cases, the surrounding circumstances might be such that the four corners of a retainer might not describe, exhaustively, the full extent of the duty owed by a professional. A number of features of the case are informative as to the circumstances in which the extension of that duty might occur. First, it was a signal feature of that case that the totality of the information required by the professional to give the advice which it was alleged was negligently omitted was before the professional concerned. That case concerned a clause in a lease which a professional simply failed to read and draw the necessary inferences from. Second, it was also a feature of the facts that the issue overlooked was one which was patent on the face of the instruments being reviewed and it became (or should have become) evident from the performance by the solicitor of his retainer. In paragraph [28] of the judgment Laddie J stated:

"… if, in the course of doing that for which he is retained, he becomes aware of a risk or a potential risk to the client, it is his duty to inform the client. In doing that he is neither going beyond the scope of his instructions nor is he doing 'extra' work for which he is not to be paid. He is simply reporting back to the client on issues of concern which he learns of as a result of, and in the course of, carrying out his express instructions. In relation to this I was struck by the analogy drawn by Mr Seitler. If a dentist is asked to treat a patient's tooth and, on looking into the latter's mouth, he notices that an adjacent tooth is in need of treatment, it is his duty to warn the patient accordingly. So too, if in the course of carrying out his instructions within his area of competence a lawyer notices or ought to notice a problem or risk for the client for which it is reasonable to assume the client may not be aware, the lawyer must warn him. I do not need to consider what would be the consequences if the lawyer does more than asked for, for example reads documents which he was not asked to read, and discovers a risk to the client."

53. There are three observations that I would make about the citation above. First, the Judge considered that the matter that should have been advised upon was something (i.e. reviewing the lease) for which the professional was being paid and would not entail "extra" work which was not being paid for. Second, the analogy of the dentist peering into the patient's mouth and noticing an adjacent tooth in need of treatment highlights that the sorts of matter that the professional should assume a responsibility to advise upon are obvious ones which are closely related to the matters the subject of the retainer. Third, the Judge was not referring to cases where the professional reads documents that he was not asked to read and, in so doing, discovers a risk to the client. These three observations highlight, to my mind, the fact that it would only be in obvious cases where an extended duty to advise arises. There must, necessarily, also be a close and strong nexus between the retainer and the matter upon which it is said the professional should have advised, but omitted to do so.
54. The ruling in Credit Lyonnais has been applied recently in Altus Group (UK) Limited v Baker Tilly Tax and Advisory Services LLP et ors [2015] EWHC 12 (Ch) per HHJ Keyser QC (sitting as a Deputy High Court Judge), ("Altus"): See generally at paragraphs [67] – [69].
55. The conclusion that I have arrived at as to the signal importance of the retainer and the limited extent to which the courts extend the duty beyond the retainer is consistent with the analysis of the case law in the literature. In Clerk and Lindsell on Torts (21^st edition, 2014) at paragraph [10-134] page [750] it is stated that: "… the general rule is that [a lawyer] is not required to advise on different points, even though they may be related". The exception to this is expressed in the following way: "On the other hand, a solicitor may be required to deal with very closely connected, though technically extraneous, issues; furthermore, insofar as the solicitor has reason to suspect that the client is not aware of them, he may have at least to draw possible difficulties to the client's attention even though technically outside his retainer". The authors also state, more generally: "In practice, it is submitted that the precise scope of the duty to advise a client depends on the circumstances of the professional relationship between the particular solicitor and his client". It is also stated that a solicitor is not "generally" obliged to advise a client on non-legal matters, e.g. on matters of business or the prudence of a particular transaction other than its legal respects. In Charlesworth and Percy on Negligence (13^th edition, 2014) at paragraph [9-235] page [711] the importance of the retainer is emphasised to the extent that a solicitor is obliged only to advise on the legalities of a transaction and has "… no duty to offer unsought advice on the wisdom of a particular course where the client is in full possession of her faculties and apparently aware of what she is doing". In paragraph [9-236] it is stated that even where a retainer is capable of narrow definition a duty can arise: "… at least to warn of a problem of which there is actual or constructive knowledge where it may prevent the ultimate object of a client being achieved". In Salzedo QC and Singla, Accountants Negligence and Liability (2016), in relation to the scope of an accountant's duty in the light of Credit Lyonnais, and, Altus Group the authors state that whether an obligation to advise (for example on tax risks or opportunities) arises from a compliance retainer would depend upon the facts. They observe that the courts: "… are generally vigilant to avoid imposing a general retainer on a professional". In this regard they cite as authority for this proposition Mehjoo (ibid) and the observations cited above (see paragraph [50]) of Patten LJ. The authors are critical of the imposition of the liability in the Altus case: See paragraphs [9.97] – [9.98]. The general thrust of the observations set out in commentaries is that the most important consideration governing the scope of the duty is the retainer and that the courts are loath to extend that duty far beyond the retainer, though it is accepted that in appropriate but narrow circumstances this may occur. The general tenor of academic commentary, and indeed that of the courts, is that for an extended duty and liability to arise there has to be a close factual and legal nexus between the retainer and the matter that it is alleged the adviser omitted to provide advice upon.

(iii) Conclusions on the facts of the present case

56. In my judgment no duty arose, on the unchallengeable facts of the case, pursuant to which the Defendant was required to advise the Claimant on the merits of the advice given which led to the First Transfer. In the present case the following facts and matters are relevant:

i) It is common ground that GFS was not instructed to consider the merits of the advice given by AF in 2000 in relation to the First Transfer.

ii) It is clear from the facts that GFS was instructed to advise upon the Claimant's present and future financial requirements. At no point did the Claimant ever ask the Defendant to advise on the merits of the First Transfer. This would have required an additional agreement with new fee arrangements. None ever arose. The Defendant was not paid to advise on this matter. The brief exchange of emails of 3^rd September 2008 (see paragraphs [19] – [21] above) did not amount to instructions to advise on the First Transfer.

iii) The First Transfer was, as of the date of the instruction of GFS, history and context only. It had no substantive connection to the matters upon which GFS was instructed to advise.

iv) The Claimant did not provide to the Defendant information which would have enabled the Defendant to advise upon the advice given by AF in relation to the First Transfer and the alleged "errors" were not obvious. In his written submissions Mr Hough QC emphasised the information that would have been needed before GFS could properly have advised, but which it did not possess:

"The exercise of reviewing the advice given by AF and expressing a view on its merits would have required GFS, acting without instructions, to take the following steps: (i) to review materials in the pension files going back to 2000 so as to identify documents relevant to the First Transfer (but irrelevant to GFS's retainer); (ii) to study the features of the Occupational Pension (again, irrelevant to GFS's retainer); (iii) to consider what investment options existed in 2000; (iv) to consider Mr Denning's own objectives at that time (e.g. his express wish for flexibility and control of investments); and (v) to analyse in detail the advice given by AF (which was significantly based on a TVA that could not have been provided). All these tasks would have been far beyond the scope of GFS's retainer."

Indeed it was the Claimant's own position that in order to formulate his own case he required pre-action disclosure from AF which he did not have and which JLT/AF was unwilling to provide (see paragraph [34] above). In the letter of the 11^th January 2013 sent by the Claimant's solicitors to JLT it was expressly stated that the Claimant would not be in a position to inform JLT of its detailed claim until such time as disclosure had been made to it of the complete files relating to the case. If the Claimant himself, and his advisers, felt unable to formulate a claim in negligence against AF in 2013 on the basis of evidence available to the Claimant then it is equally the case that the Defendant in the present case would not have been in a position to express a view, responsibly, in 2008 on the First Transfer.

v) The nature of the advice which it is argued the Defendant should have provided is in any event different in its nature to that which was the subject matter of the retainer. The Claimant's case is that the Defendant should have advised upon the basis that the advice given by AF in 2000 was negligent in law and fell below the standard to be required of a professional independent financial advisor. This is advice which might, fairly, be said to comprise a hybrid of financial and legal expertise and involves knowledge of the law of tort and limitation. In their fee agreement of March 2011 (see paragraph [18] above) the Defendant emphasised that it was not competent to give legal advice. It has not been suggested that the position was different in 2008. This is in contrast to the retainer which was to advise upon the best financial options going forward for the Claimant.

vi) Insofar as the Claimant's case is formulated upon the basis of an implied term in the retainer no case has been advanced to the effect that construed to refer to current/prospective advice it was "necessary" (in any relevant sense) to enable the retainer to have efficacy to imply into it an obligation to advise on the First Transfer.

57. For all of these reasons I do not accept that the Defendant was under any form of contractual or tortious duty of care to the Claimant as alleged. In short: (i) the Defendant's retainer was prospective; (ii) GFS was never asked to advise on the First Transfer; (iii) GFS was not equipped in terms of relevant data and information to advise on the First Transfer; (iv) GFS was never paid to advise on the First Transfer; (v) there was no commercial or factual connection between the First Transfer and the advice GFS was asked to give; (vi) the advice it is (now) said GFS should have given is in large part legal in nature concerning negligence and limitation and there was never any question of GFS being invited to express an opinion on legal matters; (vii) it was not necessary in order to give the retainer business efficacy to imply into it any term which could obligate the Defendant to advise on the First Transfer.

(iv) The Claimant's expert report

58. I do not consider that the expert report of Mr Samuel alters this conclusion. I will assume for the sake of testing the argument (but without deciding) that Mr Samuel is competent to express the opinions that he does and that the Claimant has permission to adduce the evidence. It is notable however that Mr Samuel does not claim to be a pensions expert. Further he expressly states that he does not know what the Defendant did or did not say to the Claimant with regard to his pensions. He also accepts that he does not have access to the Defendant's files so has no knowledge of what actions GFS took in relation to the Claimant and his pension. He also accepts that his opinion proceeds upon certain assumed facts which may turn out not to be correct. One assumed fact which concerns the scope of the retainer is couched in the following terms: "He sought either general financial advice or perhaps just advice about his pensions". Given the substantial importance which is played by the scope of the retainer in determining the duty owed by a professional this is, in my view, a substantial limitation on the value to be attached to the opinion expressed by Mr Samuel. If a financial advisor was, indeed, instructed to give "general financial advice" (not limited to the present and prospective affairs of the client) and was furnished with all relevant documents then, arguably, it might be within the scope of that retainer to give advice of some broad nature about the professionalism of prior advice. However that is a very far cry from the undeniable facts of the present case. Equally the expression "perhaps just advice about his pensions" is extremely vague and tells one nothing about the sort of assumptions that Mr Samuel has made about the scope of the retainer. The CV of Mr Samuel indicates that he is a lawyer in private practice with experience in compliance. He has no experience as a financial adviser.
59. Mr Hough QC argues that this evidence does not serve the proper function of expert evidence in cases of disputes as to the scope of duty in professional negligence cases whereby a professional in the relevant field explains proper practice in the field, citing Jackson & Powell on Professional Liability (7^th edition) at paragraph [6-007]:

"The second function of the expert witness is to assist the court in deciding whether the acts or omissions of the defendant constituted negligence. He will recount the current state of knowledge at the material time and the standards ordinarily observed in his profession, including any relevant general and approved practice or differing schools of thought. Expert evidence that a reasonably competent member of the defendant's profession would not have committed the act or omission in question is generally necessary before the court will find that he is negligent."

60. Mr Hough QC also complains that Mr Samuel's instructions have not been disclosed. He observes that Mr Samuel acknowledges that there is no rule in any regulatory text obligating a financial adviser to recommend to a client that it make a complaint or claim against a former adviser or advise a client to seek legal advice.
61. Mr Munro sought to circumvent all of these criticisms by contending that all that Mr Samuel was doing was expressing, essentially in the abstract, that any financial adviser acting competently in 2008 would have known that it was the general position of the FOS that, prima facie, any transfer from an occupational pension to an inherently more risky personal pension scheme should be treated as unsuitable. He submits that Mr Samuel's opinion to this effect is incontrovertible. Further, he argued that it was clear from the evidence that the Claimant provided to the Defendant, in his "blue file", which included the original August 2000 advice, that the First Transfer was from an occupational pension to a personal pension. This fact alone would have been sufficient, it is said, to have alerted any competent financial adviser that there was a real and pressing need for the Defendant to warn the Claimant of the possibility that he had been given negligent advice by AF. In relation to even this pared down argument Mr Hough QC pointed out that the position adopted was untenable.
62. First, Mr Hough QC pointed out that Mr Samuel drew support from the FSA Conduct of Business Sourcebook in force in October 2008 ("COBS"). Mr Samuel had argued (at paragraph [5.4] of his Report) that in practice the "know your customer" process should reveal a full picture of a customer's circumstances, hopes, wishes and anxieties and this should: "… include instances where the client should be complaining against their previous advisor". Mr Hough argued however that this argument was "hopeless". The "know your client" rules in COBS require an investment advisor to understand the client's financial situation and objectives for the purpose of providing that advice the financial advisor has been retained to give, not to investigate historic transactions that are irrelevant and disconnected to the investment advice being given. I agree with Mr Hough's criticism. The COBS does not support the Claimant.
63. The second matter raised by Mr Hough QC concerned Mr Samuel's opinion that GFS should have advised the Claimant that he could commission an independent actuary to check the transfer value prepared by Scottish Equitable in 2000. In paragraph [6.7] of his Report Mr Samuel does, however, state that it would be "inappropriate to state too precisely the response that one could expect from a competent IFA offering advice on pensions in the situation in which the Defendant found itself". Nonetheless Mr Samuel argued that the "very least" that one would have expected an independent adviser to do was to have the suitability of and disclosures surrounding the transfer checked by an actuary. As to this Mr Hough QC pointed out that as of the date of instruction of GFS the Claimant did not even possess a copy of the TVA and nor did he provide it to GFS. But even if it had been available there was no reason for an investment adviser instructed to advise prospectively to recommend a review of a document which was, at that point in time, nearly eight years stale. He observed that even the FOS when considering the First Transfer took the TVA on trust and he pointed out that Mr Samuel's abstract opinion was at odds with the FOS's rejection of the complaint about the First Transfer. I agree with Mr Hough's criticism set out above. Ultimately I have not obtained material assistance from Mr Samuel's Report.

(v) Conclusion

64. In conclusion I am of the judgment that there was no duty upon the Defendant to advise the Claimant in the manner alleged. The facts and circumstances surrounding the First Transfer are far too distant in time and remote in subject matter from the instructions given to GFS in 2008 to, even arguably, give rise to a duty whether arising under contract or tort. I would observe finally that the Claimant's pleaded case on this issue is wholly unparticularised as to the facts and matters said to give rise to the duty. I gave Mr Munro considerable latitude in written and oral submissions to range beyond the pleaded position. In my view even on this optimistic basis no proper case has been advanced.
65. For these reasons the Claim should be struck out and summary judgment is granted.

F. Ground 2: Causation and Time Bar

(i) The issue: Section 14A Limitation Act 1980

66. The second basis upon which the Defendant argues that the claim should be rejected is causation and limitation. I address this upon the hypothesis that I am wrong in relation to duty. On this argument even if the Claimant establishes that in late 2008 he was owed a duty of care by the Defendant and that he would have proceeded against AF either by a complaint in relation to the First Transfer to the FOS or commencing proceedings in the High Court that complaint would have been time-barred. It is common ground that in late 2008 any such complaint or claim against AF would have been outside the normal six-year limitation period. The question is whether it would have been within or outside of the alternative 3 year period for latent damage under section 14A(4)(b) Limitation Act 1980 ("LA 1980") (also reflected in FCA rule DISP 2.8.2R).
67. The Defendant argues that it is not arguable that the claim would have not been time barred even upon this basis. Section 14A LA 1980 provides (in material part):

"(3) An action to which this section applies shall not be brought after the expiration of the period applicable in accordance with subsection (4) below.

(4) That period is either –

(a) six years from the date on which the cause of action accrued; or

(b) three years from the starting date as defined by subsection (5) below, if that period expires later than the period mentioned in paragraph (a) above.

(5) For the purposes of this section, the starting date for reckoning the period of limitation under subsection (4)(b) above is the earliest date on which the plaintiff or any person in whom the cause of action was vested before him first had both the knowledge required for bringing an action for damages in respect of the relevant damage and a right to bring such an action.

(6) In subsection (5) above 'the knowledge required for bringing an action for damages in respect of the relevant damage' means knowledge both –

(a) of the material facts about the damage in respect of which damages are claimed; and

(b) the other facts relevant to the current action mentioned in subsection (8) below.

(7) For the purposes of subsection (6)(a) above, the material facts about the damage are such facts about the damage as would lead a reasonable person who had suffered such damage to consider it sufficiently serious to justify his instituting proceedings for damages against a defendant who did not dispute liability and was able to satisfy a judgment.

(8) The other facts referred to in subsection (6)(b) above are –

(a) that the damage was attributable in whole or in part to the act or omission which is alleged to constitute negligence; and

(b) the identity of the defendant; and

(c) if it is alleged that the act or omission was that of a person other than the defendant, the identity of that other person and the additional facts supporting the bringing of an action against the defendant.

(9) Knowledge that any acts or omissions did or did not, as a matter of law, involve negligence is irrelevant for the purposes of subsection (5) above.

(10) For the purposes of this section a person's knowledge includes knowledge which he might reasonably have been expected to acquire –

(a) from facts observable or ascertainable to him; or

(b) from facts ascertainable by him with the assistance 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."

68. I summarise the main governing principles, so far as relevant to the present case, as follows:

i) "Knowledge" does not require certainty or beyond possibility or correction, but reasonable belief and means knowing facts with sufficient confidence to justify embarking on investigations and/or the preliminaries to issuing proceedings: Halford v Brookes [1991] 1 WLR 428 at page [443].

ii) Under subsection (7), "the material facts about the damage" are limited to facts about the loss itself and they "do not include any facts about the acts or omissions of the defendant that allegedly constitute the negligence". See: Haward v Fawcetts [2006] 1 WLR 682 ("Haward") at paragraph [40].

iii) By virtue of subsection (9) lack of knowledge that a Defendant's conduct was even arguably negligent or blameworthy does not stop time beginning to run: Haward (ibid) at paragraph [45].

iv) Under subsection (8), the requirement that a Claimant know that the damage was attributable to the act or omission alleged to constitute negligence means that he must know of the act or omission "which is causally relevant for the purposes of the allegation of negligence": Hallam-Eames v Merrett Syndicates Ltd [1995] CLC 173 at page [177].

v) Where it is alleged that loss has been suffered as a result of negligent advice, relevant knowledge is established when the claimant is aware of the loss and is aware that it was as a matter of fact due to advice given by the defendant. See: HF Pension Trustees Ltd v Ellison [1994] PNLR 894 at pages [900]-[905].

vi) In an investment advice case where the claimed loss consists of being committed to a product which was unsuitable or unduly susceptible to market movements, the claimant acquires relevant knowledge for section 14A purposes when he/she has actual or constructive knowledge of those features of the product: See Jacobs v Sesame Ltd [2015] PNLR 6 at paragraphs [29]-[33].

vii) In a case where the claimant alleges that advice to transfer from an occupational pension scheme to a drawdown scheme was flawed, the damage is suffered at the time of the transfer.

(ii) Defendant's submissions

69. The Defendant argues that in the present case the documentary evidence establishes various minimum facts which it is said show that Mr Denning knew or had constructive knowledge of all the relevant facts for the purposes of section 14A(5) by 2005:

i) In August 2000 the Claimant knew that AF had advised him to make the First Transfer and what the advice was. He also knew that he had acted upon the advice and made the First Transfer. He was aware that he no longer enjoyed the benefits of the Occupational Pension.

ii) In October 2004 the Claimant knew that the critical yield of 5.74% used to justify the First Transfer had not been met by the Personal Pension over a period of four years. He was aware that the Personal Pension had fallen in value by £20,000, whereas if the critical yield had been met it would have increased by £100,000.

iii) In January 2005 the Claimant knew (and recorded in a letter of 28 January 2005 which repeated the concerns expressed in his letter of 27 October 2004) that the performance of the Personal Pension was "disappointing" and that his current cash flow was suffering.

iv) When Mr Denning complained in an email of 23 May 2006 that the fund was not performing as initially predicted and he referred to "year on year performance of the investments… with the exception of Property [being] consistently below the 5.74% threshold" (emphasis added) his complaint was as to a consistent pattern of underperformance which was the same consistent pattern he had identified, with detailed figures, in 2004 and earlier in 2005. Mr Denning complained that AF had failed to consider his appetite for risk in 2000 as of the date of the advice and the First Transfer. He referred to the 5.74% yield being described by AF as "conservative". He would have been aware of these matters well before 2006 and they would have influenced his concerns at those earlier times. The alleged damage in this claim is said to be caused by an inappropriate investment. Accordingly Mr Denning had relevant knowledge of the damage.

v) In 2005 Mr Denning was over 60 years old and it would have been clear to him as a sophisticated and intelligent businessman, that his returns would in all likelihood fall short of the critical yield because of the advice given by AF to transfer away from the Occupation Pension.

vi) Mr Denning abandoned his claim against AF upon the pragmatic basis (on advice) that the claim would founder on limitation grounds (i.e. the 3 year limitation period under section 14A(4)(b) LA 1980 had started to run by April / May 2006). That argument provides strong support for the conclusion that limitation had also started to run before late 2005 and a claim (in the High Court) or a complaint to the FOS commenced in late 2008 would have encountered a limitation defence which would have been equally efficacious.

(iii) Claimant's submissions

70. The Claimant advances a quite different factual analysis. Mr Munro contends that no sufficient knowledge for section 14A purposes can be gleaned from the two letters essentially relied upon by the Defendant, in particular the two letters from the Claimant to AF dated 27 October 2004 and 28 January 2005. The letters express disappointment as to performance of the pension, but this was due to poor and unexpected market performance. The 28 January 2005 letter provides in terms: "However, as discussed, the prospects today for investment growth are far better, but I really need to have more regular information than has been available in the past. It therefore makes sense to keep the Fund intact for as long as possible so as to gain the maximum from the twin benefits of (a) Higher investment returns and (b) A more attractive annuity rate for each year that I get older!".
71. The assessment by a Court of the value of a lost chance of a beneficial outcome for a claimant is not a precise science but is an exercise involving the weighing of a range of factors with a view to forming a broad view at trial of the value of what has been lost: See e.g. Sharif v Garrett [2002] 1 WLR 3118, [22] (Tuckey LJ). Reliance is placed by the Claimant upon the judgment of the High Court in Kays Hotels Ltd (Trading as Claydon Country House Hotel) v Barclays Bank plc [2014] EWHC 1927 (Comm). The Claimant had been sold an interest rate hedging product with a collar. The claim against the bank was that the derivative product was unsuitable because what the claimant wanted was protection against base rate interest rises without exposure to significant risk. The Claimant was aware that there had been some loss at the relevant date but this did not mean by itself that there was reason to question the suitability of the derivative product and impress the claimant with knowledge of the negligence. The Court observed (ibid paragraph [25]) that it was necessary to consider the interest rate loss over the life of the product which was some 10 years, such that "… the mere fact that there may be a period of interest rate loss would not necessarily indicate that there was excessive loss or excessive risk inherent in the product". The Court proceeded to hold:

"26. The Defendant's approach is far too narrow and does not correctly identify the essence of the complaint being made against it. If the complaint had simply been that the Claimant had been advised that he would incur no interest rate loss then one could understand that as soon as it became apparent that the Claimant was having to pay interest rate losses, he would or should have known the facts necessary to investigate into such a claim. However, that is simply one facet of a much more complex claim; a claim which is not simply based on interest rates but which focuses on questions of suitability. In my judgment the mere fact that it was known that some interest payments were being made for a period of about a year does not give rise to an unanswerable case that the Claimant knew or ought to have known sufficient facts to make the requisite investigation for the purpose of section 14A.

27. For all those reasons I am satisfied that the claimant does have a real prospect of establishing that he is entitled to rely on Section 14A. In any event, one has to have regard for the fact this is a summary application and therefore not the type of application that should be determined if there are likely to be facts which need to be investigated at trial and which cannot be dealt with simply on the basis of witness statement evidence. This is a case where the facts will be important. It is quite right to point out, as the defendant does, that one is not just concerned with actual knowledge; constructive knowledge is sufficient under Section 14A(10). However, that section requires one to enquire into the knowledge which a person:

'Might reasonably have been expected to acquire: (a) from facts observable or ascertainable by him; or (b) from facts ascertainable by him with the help of appropriate expert advice which it is reasonable for him to seek'.

28. That is an objective test but it is a test that has to be considered in the context of the circumstances applicable to the person in question. In the present case that involves looking into the degree of Mr Saeed's sophistication, what he had been told or not told, what his general state of knowledge was in 2008/2009 and what the more general state of knowledge was at that time, for example in relation to the anticipated future trend of interest rates. These are all matters that depend on a full factual picture and mean that the issue is not appropriate for summary determination."

72. In this case the Claimant was aware of, and accepted, a degree of risk associated with the fact that his pension fund had been invested, at least in substantial part, in equities and that he was losing the protection of a defined benefit pension scheme. But as of the date of the 2004 and early 2005 correspondence he did not know that by whatever date he retired he would receive a substantially lower income than that which he could have expected to receive had he remained a member of the Occupational Pension. The stock market had fallen in 2001-2003 due in part to 9/11 but had turned a corner and was recovering in 2004/05. The letters show the Claimant's decision to "sit tight" with the pension fund and seek to gain from that market movement. It was only later in 2006 when the trends in the market became more apparent that the Claimant came into possession of sufficient information for him to form the view that his concern that he had not been given proper advice as to investment risk and appetite in 2000 had been a root cause of losses over and above that attributable to normal market risk.

(iv) Conclusion

73. Having reflected on this aspect of the case it is my view that the Claimant's arguments are substantially weaker than the Defendants. However, on balance I cannot at this early stage in the proceedings conclude that no other evidence or facts would come to light which provided some support for the Claimant. The issue here is essentially one of fact and evidence as the above recital of the competing factual arguments reveals. In this event I will not strike this part of the claim out. I am not however concluding that this issue must necessarily go to trial. I do not preclude the Defendant seeking summary relief later on when the facts are clearer.

G. Ground 3: Causation and FOS Complaint

(i) The issue

74. I turn to the third ground relied upon by the Defendant which is that if Mr Denning is entitle to argue that GFS owed a duty to the Claimant and breached it in 2008 and his claim against AF was not time-barred, the claim nonetheless falls to be summarily dismissed for a further reason which is that Mr Denning has no real prospect of establishing that, given non-negligent advice by GFS, he would have issued proceedings against AF in late 2008.

(ii) Defendant's submissions

75. The Defendant argues that if he had taken any action at all, Mr Denning would have done as he did in late 2010 when he took the view that AF's advice on the First Transfer had been flawed: he would have added points about the First Transfer to his existing FOS complaint. Given that he did not even consider bringing a civil claim in late 2010 when he was undoubtedly concerned about the First Transfer advice and prepared to criticise it as inappropriate there is no reason to think he would have taken a different approach if he had been given cause for similar concern in late 2008. On the Claimant's own evidence there was more reason for him to be concerned and take serious measures in late 2010 because his worries about the performance of his investments had increased over time.
76. If Mr Denning had expanded his FOS complaint to include the First Transfer advice the consequences, argues the Defendant, would have been as follows:

i) The FOS would have rejected his complaint about the First Transfer on its merits. Indeed, the FOS did reject the complaint on its merits after hearing full representations from Mr Denning (in the decisions of November 2011 and May 2012, see paragraphs [29] and [30] above).

ii) The FOS adjudication process would have taken at least 18 months and by the time his complaint about the First Transfer had been rejected any civil claim would have been time-barred.

iii) Even if the FOS had taken a different view from that which it took in the two reasoned decisions, any award to Mr Denning based on the First Transfer would have been capped at the FOS jurisdictional limit which applied at the time of £100,000.

(iii) Claimant's submissions

77. In opposition to this the Claimant argues that if, in 2008, the Defendant had advised the Claimant to investigate a claim in respect of the 2000 transfer he would have done so in or about late 2008. The claim would not inevitably have been to the FOS and therefore subject to a £100,000 cap on compensation, rather he would have issued in the High Court. It is said that the Claimant would have discovered relatively quickly that his claim was worth materially more than £100,000 and he would have avoided the FOS and at the very least issued protective proceedings in the High Court.

(iv) Conclusion

78. Once again my view is that the Defendant has by far the better of this argument. But I am also of the view that the full extent of the argument cannot fairly be determined on paper at this early stage and could be affected by further disclosure and/or evidence. As with the issue of time bar I decline to strike out the issue at this stage. Again this is not intended to prevent the Defendant seeking further summary relief when matters are clarified should this ever become relevant.

G. Conclusion

79. In conclusion the claim is struck out and judgment is entered for the Defendant upon the basis that no duty either in tort or contract was owed to the Claimant to advise on the advice given in respect of the First Transfer. As to other matters (limitation, loss, causation) I consider the Defendant to have the best of the argument but I cannot at this early stage be wholly confident that further evidence would not come to light which was relevant and which could improve the Claimant's position. Had I not found for the Defendant in relation to duty I would not, at this juncture at least, have struck out the claim.