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Glaister v. Greenwood [2001] EWHC Ch 453 (26th February, 2001)

THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

CH1998 G 6021

Royal Courts of Justice

Strand

London WC2A 2LL

26 February 2001

	*Before*
	MR JUSTICE LAWRENCE COLLINS
	Between
	CHARLES ANDREW CAMPBELL GLAISTER	Claimant
	and
	RICHARD HOWARD GREENWOOD	Defendant

JUDGMENT

Approved by the Court for handing down

Mr Alastair Norris QC (instructed by Bond Pearce) appeared on behalf of the Claimant.

Miss Angharad Start (instructed by Mills & Reeve) appeared on behalf of the Defendant.

Hearing: 18, 19 January 2001

Mr Justice Lawrence Collins

I. Introduction

1. This case raises for decision (it would seem for the first time) a limitation point arising out of the pensions mis-selling scandal which emerged in 1993, and which has involved hundreds of thousands of people who opted out of occupational schemes and invested in personal pensions with insurance companies on the advice of salesmen of those companies or of independent financial advisers.

2. In 1994 the Securities and Investments Board (the "SIB") issued guidance for insurance companies and other pension providers and independent financial advisers to conduct a review of all personal pension transactions between April 1988 and July 1994, to identify investors who were inappropriately advised to take out personal pensions and, where appropriate, to provide redress. The most urgent cases were reviewed first, e.g. people who had already retired or who were close to retirement, and some 600,000 such priority cases were identified. There was no evidence in this case of the cost of redress but it is well known that it ran to many millions of pounds.

3. Mr Glaister claims that he is one of the victims in the pensions mis-selling scandal. His case is that he was negligently advised by Mr Greenwood, his cousin and an independent investment adviser, to transfer his early leaver benefits from his employment with Laing Properties plc ("Laing") to a Norwich Union transfer plan (which was an insurance policy providing a guaranteed minimum pension, and widow's pension, in the form of an annuity) rather than transfer it to the P&O Property Holdings ("P&O") occupational scheme after the take-over by P&O of Laing.

4. The Norwich Union plan was purchased on October 18, 1991 and the proceedings were commenced on November 10, 1998. Mr Greenwood denies negligence, and says that the claim is statute barred, because the cause of action accrued in 1991. I have been informed that insurance companies which sold pension plans, and independent financial advisers who advised on them, have not generally taken limitation points against them in claims arising out of the pensions mis-selling scandal, but the point arises in this case because (a) Mr Glaister's complaint is, in law, not against Norwich Union, from whom he purchased the deferred annuity, but against Mr Greenwood, who advised him to transfer his early leaver benefits to the Norwich Union plan; (b) Mr Greenwood, who was regulated by FIMBRA (to which the PIA has succeeded), has ceased to carry on business; (c) the firm or company which took over Mr Greenwood's business did not assume liability for any advice given by Mr Greenwood; (d) Mr Glaister is not entitled to compensation under the Investors Compensation Scheme since Mr Greenwood, being insured for breaches of duty while he was in business, is in a position to pay.

5. On September 21, 2000 Deputy Master Weir ordered that there be tried as a preliminary issue the question whether Mr Greenwood was entitled to rely on the provisions of the Limitation Act 1980 as amended. Mr Glaister's position was that no loss had occurred prior to November 11, 1992, but that if it had occurred prior to that date, then he was entitled to rely on section 14A of the Limitation Act 1980 which provides a special time limit of three years for negligence actions where facts relevant to the cause of action were not known at the date of accrual of the cause of action. At the hearing Mr Glaister conceded that the claim was outside the six year period from the accrual of the cause of action, and relied solely on section 14A.

II. Mr Glaister's transfer of early leaver benefits

6. Mr Glaister left school at sixteen and trained as a surveyor, and before being employed by Laing was employed mainly by F W Woolworth and by the London Borough of Camden (where he worked for thirteen years). He was involved in the management of properties. When P&O took over Laing Mr Glaister applied to join the P&O Pension Scheme for the future. He worked for P&O until 1998.

7. Mr Glaister was attracted to the Norwich Union plan because he had lived in Norwich, several of his relatives (including, it seems from the correspondence, Mr Greenwood) had worked for Norwich Union, and Mr Greenwood had previously sold him Norwich Union endowment policies.

8. The value of Mr Glaister's accrued rights in the Laing scheme was Ł43,470. A transfer payment was made in respect of his early leaver benefits under the Laing scheme to the Norwich Union. The effect (as the P&O Pension Scheme manager told him on November 6, 1991) was that his Laing pensionable service did not count towards his entitlement under the P&O Pension Scheme, and his date of entry into the P&O Pension Scheme was treated as being July 1990 rather than February 1986, when he had joined the Laing scheme.

9. Mr Glaister's evidence (which I accept) was that he did not know that he was paying a commission to Mr Greenwood. Indeed, Mr Greenwood wrote on October 2, 1991 to Mr and Mrs Glaister to say that he had heard from Norwich Union that they had received the application forms "together with a cheque for Ł43,470 which was banked yesterday." The insurance policy issued by Norwich Union is consistent with there being no direct commission deduction, since the premiums stated in the policy also aggregate Ł43,470. For the purposes of this preliminary issue (in which I have not heard evidence from Mr Greenwood) I find that Mr Greenwood's letter gave the impression that the whole of the benefits were being transferred to Norwich Union. It would appear therefore that his commission was paid by Norwich Union from general funds and not by deduction from the transfer payment. This is relevant in this preliminary issue solely in the context of an argument that Mr Glaister should have realised that he had incurred a loss on the transfer to Norwich Union in that he would not have had to pay any commission on the transfer of benefits to the P&O scheme, but had paid commission on the Norwich Union plan.

III. Reports of pensions mis-selling

10. In December 1993 Mr Glaister became aware, like many other affected people, of what became known as the pensions mis-selling scandal. He read The Times report that the SIB had commissioned a report about advice given to 735 people, randomly chosen from the files of sales staff of pension providers and independent advisers, who had switched from occupational schemes to personal pension policies, which revealed wide-spread failures to comply with guidelines. It was reported that the chairman of the SIB had said that people who had been mis-sold pensions would be compensated, either by reinstatement into their original schemes or by compensation for loss of benefit. An advisory committee had been appointed to handle the investigation but compensation payments could take up to two years. The article pointed out that most of the advisers would have received substantial commissions.

IV. Contact with Norwich Union

11. After making some contact with the SIB, Mr Glaister wrote in a letter marked "without prejudice" to Norwich Union on December 17, 1993 as follows:-

"In the light of recent press comments, I am writing in respect of the above policy.

As your records will show, I took the policy out by transferring benefit out of a private pension scheme. I would be very grateful for your reassurance that my financial position has not been prejudiced by not remaining within my employer's pension scheme.

I am bringing this matter to your attention as soon as I have been alerted to a potential problem. Should [it] transpire that I have suffered loss, please be on notice that I will seek recompense from the date any losses first occurred.

I understand from the S.I.B. that I should contact you in the first instance.

I look forward to hearing from you at an early date."

12. His evidence was that he wrote this letter for reassurance. He had no idea whether he had suffered any loss, and hoped he had not. In his oral evidence he said he had marked it without prejudice because he understood it protected his position. He put Norwich Union on notice because he did not realise that Mr Greenwood would be responsible. But he did accept that from about this time he believed that Mr Greenwood had given him inadequate advice. He did not think it necessary to consult solicitors.

13. On January 11, 1994 Norwich Union replied to say that they could not advise "whether or not you would have been better off by leaving your policy" in the Laing scheme, and suggested that he should contact the agent who advised him to take out the policy.

V. Subsequent events

14. There is no evidence that Mr Glaister took any further steps in 1994, but he followed press reports on the progress of the scandal and received factsheets from the SIB. One of the SIB factsheets, issued in May 1994 (and probably seen by Mr Glaister at or shortly after that time), was directed at people thinking (the SIB's emphasis) of opting out of an employer's scheme.

15. Mr Glaister was not thinking of opting out of a scheme, nor had he done so, but there was material in the factsheet which he would have seen, in particular a statement in bold type that individuals would nearly always be better off staying in or joining an employer's pension scheme and setting out a check list to see if the financial adviser had asked the right questions. The factsheet also warned that the adviser's commission was taken from the transfer value if the individual was opting out of his employer's scheme.

16. Further reports appeared in the press in 1994 indicating concerns about mis-sold personal pension policies. According to the press reports, the scale of the problem was enormous, and the regulators had established priority groups whose cases would be considered first, broadly those nearing retirement or those who had already retired, and dependants of deceased persons. Mr Glaister saw a report in The Daily Telegraph on August 13, 1994 that a person who had opted out of the NHS scheme in favour of a Norwich Union policy was being affected by delay in the SIB report on compensation claims. The Times reported on October 29, 1994 that the problem was larger than previously thought, and that who were not in priority classes had to ask their life company to have their case reviewed, which would then have 2 years to review the case.

17. On December 22, 1994 Mr Greenwood wrote to Mr Glaister that he was retiring on and that his business was being taken over by Fenton and Partners. On April 25, 1995 Mr Glaister wrote again to Norwich Union. He referred to their letter of January 11, 1994, and continued:-

"I am unhappy with the response suggested by you. In the circumstances, would you please send to me a 'Review of Personal Pensions' questionnaire.

I look forward to hearing from you since I understand from the Personal Investment Authority you must have reviewed certain case categories deemed urgent, which I believe applies to my case.

I understand that Richard H Greenwood is no longer in business."

18. At about this time Mr Glaister was in touch with the Personal Investment Authority ("PIA"), and on April 27, 1995 the PIA sent him the SIB's October 1994 factsheet on the pension transfer and opt-out review. I find as a fact that he did not see the October 1994 factsheet until late April 1995. Like the May 1994 factsheet, the October 1994 factsheet did not directly deal with Mr Glaister's position, although he realised that it had implications for him. It dealt with pension transfers, but it is clear from the context that it was dealing with persons who took money out of an ex-employer's scheme and who put it into a personal pension plan without joining another occupational scheme, which was not Mr Glaister's position.

19. But from the October 1994 factsheet Mr Glaister could have learned: (a) 5 million personal pensions had been sold since April 1988; (b) personal pensions had been a good investment for many people, but some people had decided to transfer on the strength of wrong advice from insurance companies and independent financial advisers; (c) regulators were requiring investment firms to review the way in which they had sold certain policies since 1988 and where necessary put things right; (d) investment firms had to review automatically people who were in the priority groups, and would have to put things right for those who qualified for redress, i.e. where the firms did not comply with the rules in force at the time, and where as a result the individual suffered a financial loss; (e) financial loss would include lower benefits on retirement from the personal pension than from the employer's scheme; (f) it would take some time for those in a priority group to be contacted, but if a person in a priority group had known or suspected for some time that he or she had been badly advised by the investment firm "in such a case you may have to protect your own rights and you should take professional advice"; (g) people who were not in a priority group could ask the investment firm to review their case, but there might be some delay in dealing with such a request, although the SIB had asked firms to review non-priority cases within two years of a request; (h) if a person had a specific complaint against an investment firm, he or she had a right to complain, and if the person was not happy about the way the firm had dealt with the complaint, "your next port of call is the complaints procedure for your investment firm's regulator or the PIA Pensions Unit." The factsheet also contained the following material under "What if I need my case reviewed quickly?"

"If you are not in a priority group but need your case reviewed quickly for some exceptional reason, you should write to the investment firm which arranged your personal pension policy and explain what has happened. You may, for example, be in serious ill health and have lost out on ill health benefits which you would have got from your employer's pension scheme.

If you have known or suspected for some time that you may have been badly advised, you may wish to ask for an especially urgent review on that ground. Or you may wish to take steps to ensure that your right to redress is not lost through lapse of time."

20. On May 1, 1995 Norwich Union again referred Mr Glaister to Mr Greenwood's firm, now Fenton and Partners. But Fenton and Partners on May 3, 1995 told him that their agreement with Mr Greenwood specifically excluded them from responsibility for all advice given prior to January 1, 1995.

21. On July 31, 1995 Mr Glaister filled in a PIA questionnaire giving details of his personal pension plans and involvement in pension schemes. On October 4, 1995 the PIA said that his case was not in a priority group but that they would undertake a review on his behalf and hoped to advise him of the result as soon as possible. Mr Glaister's written evidence was that he just wanted someone to carry out a review of his pension arrangements and hopefully to be reassured that his position was fine, and the PIA seemed to be offering to do this review. He did not know what the result of this review would be.

22. It was also his evidence that by late 1995 he wanted to establish whether or not he had suffered a loss by transferring his Laing benefits out of the occupational scheme, and in the circumstances thought it best if he instructed Bond Pearce, a firm which he had previously used when working for Laing. He made contact with them early in January 1996, and retained them on January 18, 1996.

23. On January 25, 1996 the Investors Compensation Scheme (the "ICS") wrote to Mr Glaister to say that the PIA had advised them that he might have a claim against Mr Greenwood in relation to the Norwich Union plan, and explained to him the compensation process, which involved that the investment firm which had advised him must be declared "in default" by the scheme which meant that the firm was likely to be unable to meet the claim. He was told that the first stage of an investment firm being declared in default was for the ICS to be satisfied that there was at least one investor who had a claim against the firm, that the claim met all of the requirements for payment of compensation set out in the rules, and that the firm was likely to be unable to pay the claim. He was also told that the ICS was currently gathering information to enable it to decide whether Mr Greenwood could be declared in default, and he was sent a preliminary questionnaire, which he completed on February 27, 1996. Against the question "Why do you believe that you have a claim against Richard H Greenwood?" he said:-

"Having subsequently read articles in the press and having taken preliminary legal advice, it suggests that I would have been off transferring my Laing pension to P&O rather than to the Norwich Union"

Against the question "Please state how much you believe is owing to you by Richard H Greenwood and how you have calculated it" he entered "I do not know."

24. On February 12, 1996 he wrote to Mr Greenwood to say that the PIA had informed him that his case was one of 190 that had been selected for inclusion in a pilot project for review, and added:-

"Whilst I am sure that the exercise will throw up nothing untoward, to protect yourself may I suggest that you treat the situation as a potential claim and notify your professional indemnity insurers."

In evidence he accepted that it was not true that he had been selected as one of 190 in a pilot project, although on October 4, 1995 the PIA had told him that they would undertake a review on his behalf.

25. On February 27, 1996 he sent a copy of that letter to the ICS, which he described as fending Mr Greenwood off. On July 29, 1996 the ICS told Mr Glaister that because the scheme was effectively the rescue fund of last resort they were unable to consider a claim if Mr Greenwood was financially capable of paying the claim himself. In such a case the investor had to seek compensation directly from the investment firm. Since Mr Greenwood was solvent and maintained professional indemnity insurance it was not apparent that he could not make good any losses and they were accordingly not able to consider a claim for compensation. The PIA indicated that its pensions unit would continue to gather as much information as possible about the circumstances which lead to the transfer being sold to Mr Glaister so that he could if he wished discuss with a solicitor whether it would be worth his while issuing legal proceedings, but in the meantime confirmed that the ICS's suggestion that he should pursue his claim directly with Mr Greenwood was the correct action.

26. On September 12, 1996 Bond Pearce sent Mr Glaister's papers to a local actuary to advise on whether or Mr Glaister appeared to have suffered financial loss as a result of his pension arrangements. After obtaining information from Norwich Union, on December 4, 1996 Southernhays Actuarial Consultancy advised (via Bond Pearce) that it appeared that Mr Glaister had not suffered a prospective loss, but before preparing a final report further information was required about the benefits under the P&O scheme. On February 4, 1997 the actuaries calculated the potential loss on present values as somewhere between Ł600 and Ł2,400, and said "there is scope to pursue a claim for a prospective loss but Mr Glaister may feel that its size does not warrant taking the matter further". They also pointed out that it was possible that another review could show that Mr Glaister had actually benefited from the transfer or, alternatively, that the prospective loss was larger than the Southernhays' figure suggested.

27. After having indicated to Bond Pearce that he doubted whether the benefits of legal action would justify the costs, on March 7, 1997 Mr Glaister wrote to Mr Greenwood with a copy of the letter from the actuaries. He said that he would have been Ł2,365.48 better off if he had not taken Mr Greenwood's advice and transferred to the Norwich Union and left his benefits within the P&O scheme, and that he incurred Ł250 expenses in obtaining advice to date. He asked Mr Greenwood to inquire of his professional indemnity insurers whether they were prepared to settle the matter, including his costs, on the figures indicated. On May 24, 1997 Mr Greenwood denied liability. He said, in particular:-

"Using hindsight, the figures supplied in the letter you enclosed quoted a difference of only 1% between the two calculations (Ł615.77). I am sure that any consultant would feel very happy to have met a client's own requirements and found that a comparison six years later came within 1% of an alternative that did not take all those requirements into account.

Thus I do not understand why you consider you had to involve further expense of hiring an Actuary when the PIA had indicated that they had selected your case for review and you said you were 'sure the exercise will throw up nothing untoward'."

28. On April 16, 1998 the PIA told him that his case was being recalculated, and on August 19, 1998 the ICS indicated that his loss was Ł48,024.25. On March 3, 1999 his actuaries recalculated the loss as Ł64,454 as at February 1, 1999. Meanwhile, these proceedings had been commenced on November 10, 1998.

VI. Limitation Act 1980, section 14A

29. Section 14A of the Limitation Act 1980 ("the 1980 Act") deals with "actions in respect of latent damage not involving personal injuries." For present purposes the relevant elements are these:

(a) the section applies to any action for damages other than for personal injuries: section 14A(1);

(b) if a three year period from the "starting date" expires after the normal six year period from the date of accrual of the cause of action, then the limitation period expires at the end of the three year period: section 14A (3)(4);

(c) the starting date for reckoning the three year period 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 brining an action for damages in respect of the relevant damage and a right to bring such an action" (section 14A(5));

(d) the relevant knowledge includes knowledge "of the material facts about the damage in respect of which damages are claimed": section 14A(6)(a);

(e) for this purpose 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." (section 14A(7));

(f) knowledge includes:

"knowledge which he 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 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" (section 14A(10)).

30. Several of the authorities on section 14A rely on cases decided under sections 11, 11A and 14, which deal with actions for personal injuries. That is because the sections have certain critical factors in common. Thus for the purposes of section 14 a critical factor is the date when the claimant first had knowledge of (inter alia) the fact "that the injury in question was significant" (s 14(1)(a)), i.e. if the plaintiff would reasonably have considered 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 (s.14(2)); and there is a provision for constructive knowledge in section 14(3) on which section 14A(10) is modelled and from which section 14A(10) does not materially differ.

VII. Burden of proof, pleadings and evidence

31. The burden of proof under sections 14 and 14A is the same. It is for the claimant to plead and prove a date within three years of the commencement of the proceedings when he acquired the relevant knowledge; if the defendant wishes to rely on a date prior to the three year period immediately preceding the date of the issue of the proceedings, the onus is on the defendant to prove that the claimant had or ought to have had knowledge by that date: Nash v. Eli Lilly & Co. [1993] 1 WLR 782, 796 (C.A.); Wilson v. Le Fevre Wood & Royle (1995) 66 Con LR 74, 82 (CA).

32. The limitation point was taken by Mr Greenwood in the defence not only by an allegation that the six year period had expired but also by a positive allegation that Mr Glaister could not rely on the extended period "because he had the requisite knowledge...in April 1995, at the latest." One of the unsatisfactory ways in which this case has developed is that this plea does not make it clear whether imputed, as well as actual, knowledge is being alleged, and it is plain that Mr Glaister's written evidence was produced on the basis that he was seeking to prove that he did not have actual knowledge until a date within the three year period preceding the commencement of proceedings. The order of September 21, 2000 made at the case management conference provided for an exchange of witness statements on the preliminary issue. Mr Greenwood did not put in any evidence seeking to establish that there was a date outside the three year period by which Mr Glaister should have acquired the knowledge (although the burden was on Mr Greenwood in this respect).

33. It is plain that Mr Glaister's case was prepared on the basis that only actual knowledge was in issue. The only evidence adduced has been that of Mr Glaister who dealt in his witness statement exclusively with the actual knowledge which he had, and not at all with the question why he did not seek legal or actuarial advice before the end of 1995. The skeleton argument of Mr Norris QC on behalf of Mr Glaister ended by stating that Mr Greenwood did not assert that Mr Glaister had constructive or imputed knowledge before he received valuation advice. This question has been approached on behalf of Mr Greenwood exclusively by seeking to extract admissions from Mr Glaister in the witness box and I have the gravest misgivings about that approach. I heard evidence from Mr Glaister. I found him to be a careful and honest witness, although at times unnecessarily defensive. My impression is that he was not pro-active by nature and somewhat passive. In particular, I found him to be on occasion very suggestible in cross-examination, when (with the benefit of hindsight in the light of Mr Greenwood's attitude in the proceedings) he was prone to agree that he had not acted reasonably in handling his complaint, or to accept that documents suggested that he knew he had a loss.

34. But Mr Norris QC did not invite me to reject the allegation of imputed knowledge because it had not been properly pleaded, or to disallow questions which were designed to fish for admissions by Mr Glaister that he had not taken steps which (with hindsight) he now feels he should have taken. But the way in which the case had developed makes it essential, as a matter of elementary fairness, to ensure that Mr Glaister's evidence be evaluated in the light of his actual knowledge at the time, unclouded by the course which this litigation has taken.

35. Mr Glaister's reply (which was, as I have said, plainly dealing exclusively with actual knowledge) was that he did not become aware that he had suffered loss and/or damage as a consequence of the negligent advice until December 4, 1996, the date he first received actuarial advice (which was that it appeared he had not suffered a prospective loss). By an amended reply the critical date is pleaded as August 19, 1998, which is the date the Investors Compensation Scheme informed him that the loss was about Ł48,000. At the hearing I indicated that if I considered that the date on which Mr Glaister had acquired the relevant knowledge was not August 19, 1998, but some earlier date within the three year period such as December 4, 1996 (as originally pleaded) or February 4, 1997 (when the actuaries expressed a very tentative view that the loss might be between about Ł600 and Ł2500, although other actuaries might take the view that Mr Glaister had actually benefited, or had suffered a larger loss), then I would be inclined to give Mr Glaister permission to amend, since he was fully cross-examined on the correspondence, there would be no prejudice to Mr Greenwood, and reliance on the pleading point would be a technicality wholly devoid of merit. But I would not have allowed any amendment of Mr Greenwood's case which would have allowed him to plead imputed knowledge after April 1995, because if (which is doubtful) his original pleading was intended to rely on imputed knowledge, Mr Glaister would have been entitled to a proper opportunity to deal with any allegation relating to a later date.

VIII. The approach to Limitation Act 1980, section 14A

36. Mr Glaister has conceded that the primary six year limitation period expired before issue of the proceedings in November 1998. Miss Start, on behalf of Mr Greenwood, argued that I cannot decide when the extended period begins unless I decide when the cause of action accrued, since the cause of action accrues when damage is suffered and I have to decide for the purpose of section 14A when Mr Glaister knew or should have known of "the damage." But in Mortgage Corporation v. Lambert & Co. [2000] Lloyd's Rep. PN 624, 630 (C.A.) the Court of Appeal had no difficulty deciding on the issue of knowledge of damage without finally deciding when the cause of action accrued. I shall assume (without deciding) that the cause of action accrued when Mr Glaister acted on Mr Greenwood's advice by transferring his Laing Scheme early leaver benefits to the Norwich Union instead of transferring it to the P&O Scheme.

37. The starting point is that the purpose of section 14A is to avoid the injustice which arises if a cause of action accrues without the person who is entitled to sue appreciating that the damage which gives rise to the cause of action has occurred: Oakes v. Hopcroft [2000] Lloyd's Rep. PN 946, 947 per Lord Woolf CJ. The enquiry under section 14A must be approached in a broad common sense way in the light of the object of the section and the injustice it was intended to mitigate, although a desire to be indulgent to claimants should be resisted: Spencer-Ward v. Humberts [1995] 1 EGLR 123, at 126 per Sir Thomas Bingham MR. Suspicion is not knowledge, and the task of the court is to determine at what point the claimant had knowledge with sufficient confidence to justify embarking on the preliminaries to the commencement of proceedings: ibid., applying Halford v. Brookes [1991] 1 WLR 428, 443 (CA) and Nash v. Eli Lilly & Co. [1993] 1 WLR 782, 792 (CA), both cases on section 14.

38. The answer to the enquiry depends on determining what the claimant is really complaining about. In Oakes v. Hopcroft, ante, at 947 Lord Woolf CJ said:-

"In applying section 14(A) it is of the greatest of importance to identify, precisely, the nature of the damage, which coupled with the negligent act or omission is alleged to constitute the cause of action"

and both Lord Woolf CJ and Clarke LJ followed the approach of Hoffmann LJ in Hallam-Eames v. Merritt Syndicates Ltd., The Times, January 25, 1995; [1995] 7 Med LR 122 (C.A.). Clarke LJ said (at 953) that the correct approach was to try to ascertain in each case essentially what it is that the claimant is complaining about, and he quoted from the judgment of Hoffmann LJ, who said (at 125-6):-

"It is this idea of causal relevance which various judges of this court have tried to express by saying the plaintiff must know 'the essence of the act or omission to which the injury is attributable' (Purchas LJ in Nash v Eli Lilley & Co [1993] 1 WLR 782, 799) or 'the essential thrust of the case' (Sir Thomas Bingham MR in Dombie [1994] 1 WLR 1238) or that one should

'... look at the way the plaintiff puts his case, distil what he is complaining about and ask whether he had in broad terms knowledge of the facts on which that complaint is based'" (Hoffmann LJ in Broadley [1993] 4 Med LR 328,332.)

39. The same approach is illustrated by the recent case of Mortgage Corporation v. Lambert & Co. [2000] Lloyd's Rep. PN 624 (C.A.), which also shows the appropriate approach to imputed knowledge under section 14A(10). In April 1990, on the instructions of the claimants, the defendant firm of surveyors valued a house for mortgage purposes at Ł250,000. In October 1996 proceedings were instituted, in which it was alleged that the valuation was negligent and that the true value was Ł150,000. The principal issue on appeal was whether the claimants knew or should have known, before October 1993, of the material facts in respect of the relevant damage. The borrowers were in persistent default from the time of the advance and possession proceedings were commenced in December 1990, but the claimants did not succeed in realising the security until 1996. But in the course of the possession proceedings they had received, in November 1992 and June 1993, valuations from debt collection agencies, which indicated values of between Ł150,000 and Ł175,000. The eventual proceeds of sale fell short of the valuation by Ł111,500, and it was the date of the sale (or shortly thereafter) when the claimants had actual knowledge of the damage which was sufficiently serious to justify proceedings against a defendant who did not dispute liability and was able to satisfy a judgment. Chadwick LJ said that the question was when the claimants had knowledge that the true value in 1990 was substantially less than the value attributed to the property by the valuers. The value attributed to the property in 1992 and 1993 by the debt collection agents might well have raised in the mind of a lender the question whether the original valuation had been excessive. Chadwick LJ went on (at 630):-

"The real question, as it seems to me, is not whether a prudent lender would have been on enquiry, in November 1992 or June 1993, as to the validity of the original valuation; but whether (if on enquiry) it would have been reasonable for it to obtain a retrospective valuation of the property at that stage. On that question there was no evidence before the judge. It is necessary to have in mind that, by June 1993, TMC had obtained an order for possession which it was actively seeking to enforce. There was no evidence that, in those circumstances — with some three years in hand before any relevant period of limitation would expire — a prudent lender would have taken the step of obtaining a retrospective valuation, the only purpose of which could be to provide a basis for a claim against the defendant valuers. It is not, at least to my mind, at all self evident that a lender would not have acted reasonably in those circumstances if it had decided to wait until it had obtained the possession of the property which it was seeking before instructing valuers. It would need to instruct valuers, at that stage, to provide a current valuation of the property, in order to set a price at which the property would be offered for sale on the market. It might well have seemed sensible to wait until the valuers were instructed for that purpose (a current valuation) before asking them to provide a retrospective valuation as at 30 April 1990. The two valuations could be carried out at the same time; and at a time when the valuers would have unimpeded access to the property which would have come into the possession of the mortgagee. At the least, the defendants advanced no evidence to suggest that it would not be sensible and reasonable to take that course."

40. In these proceedings Mr Glaister is not simply complaining that he was inadequately advised by Mr Greenwood, but that as a result of that inadequate advice he suffered a loss, and that the loss was the difference in value between the Norwich Union plan and the benefits he would have obtained by transferring the Laing benefits to the P&O scheme.

41. I should also mention again that section 14A categorises, as material facts about the damage, such facts as would lead a reasonable person who had suffered such damage to consider it sufficiently serious to justify his instituting proceedings against a defendant who did not dispute liability and was able to satisfy a judgment: section 14A(7). It has been held that knowledge of relatively trivial damage will start time running and may preclude an action for more serious damage discovered later: Oakes v. Hopcroft [2000] Lloyd's Rep. PN 946, 948, citing Hamlin v. Edwin Evans (1996) 29 HLR 414, which approved Horbury v. Craig Hall & Rutley, 191 Prof Neg 206.

IX. Conclusions

42. It is clear from the documents and from his oral evidence that Mr Glaister considered from late 1993 or early 1994 that Mr Greenwood had given him inadequate advice. The issues which were argued were (i) whether Mr Glaister had actual knowledge of damage; (ii) whether a reasonable person who had suffered such damage would consider it sufficiently serious to justify instituting proceedings on the statutory hypothesis of the defendant who did not dispute liability and was able to satisfy a judgment; (iii) whether he might reasonably have been expected to acquire such knowledge from facts ascertainable by him, with or without the help of appropriate expert advice which it was reasonable for him to seek.

43. For this purpose I consider that the relevant damage in law is that Mr Glaister in 1990, as a result of what must for present purposes be treated as Mr Greenwood's negligence, exchanged his Laing early leaver benefits for what is now alleged to be a less valuable Norwich Union plan. The relevant knowledge would be knowledge that the present or prospective value of the benefits under the Norwich Union plan was less than the value of having transferred the Laing early benefits into the P&O scheme. The question, as Mortgage Corporation v. Lambert & Co, ante, emphasises, is not when Mr Glaister was able to quantify his loss, but when he knew, or should have known, that he had suffered damage.

44. What the PIA and the actuaries were considering initially was whether Mr Glaister had suffered a loss at all, and not simply the quantification of his loss. The differing estimates produced by the actuaries and the PIA in this case show that the exercise is a complex one. These was no evidence of the way in which the calculation is done and the valuations in the papers do not indicate the relevant factors apart from the decline in interest rates. But I assume (without deciding) that other factors would include the prospects of the amount of the compound bonus declared from time to time by Norwich Union, the value of the enhancement after retirement by the greater of increases in the Retail Price Index and percentage annual compound increase under the Norwich Union plan, and the value of potential salary increases and potential discretionary enhancement of benefits under the P&O scheme. What is clear is that this is not one of those cases where, by reason of an employee having opted out of an occupational scheme altogether, there is the obvious and immediate loss of the employer's contributions.

45. Just as Mr Greenwood's defence did not distinguish between actual and imputed knowledge, so the submissions on his behalf did not draw a clear distinction between matters which were said to show actual knowledge of damage and those which were said to have put Mr Glaister on such enquiry that he should have taken expert advice on whether he had suffered damage. What was being argued was that the same documents gave rise to an inference that Mr Glaister actually knew, but (if that were wrong) the same documents would have led a reasonable person to seek expert advice.

46. The principal matters which were said to support the submission that Mr Glaister actually knew before November 1995 that he had suffered a loss were these: following the initial press report in December 1993 which signalled the exposure of the pensions mis-selling scandal, he wrote to Norwich Union to notify it that he might seek recompense; the May 1994 SIB factsheet stated that employees would nearly always be better off if they stayed in an occupational scheme; there were various indications in press reports and SIB factsheets that one of the disadvantages of opting-out of occupational pension schemes and taking out personal pension plans was the deduction of agents' commissions and company charges from the transfer value; the October 1994 factsheet (received by Mr Glaister in April 1995) stated that persons who took money out of their ex-employer's pension scheme and put it into personal pension plans may have suffered a loss if on retirement they receive lower benefits or may not have extra benefits such as life insurance; he saw an article in Pensions Management in about October 1994 stating that the P&O scheme had won an industry award for its benefits package; he collected various press cuttings, including one in August 1994 about a NHS employee who had been in dispute with Norwich Union over a claim that its salesmen had wrongly assured him that he could retire at 55 on the Norwich Union plan, and other cuttings indicating that Norwich Union plans were not doing well (but these were not concerned with personal pensions and can be disregarded); he made a declaration in February 1996 (before he had obtained actuarial advice, and therefore suggested as throwing light on his state of knowledge in 1994/1995) in the ICS preliminary questionnaire that he was "an individual not acting in the course of carrying on investment business at the time of making the investments which resulted in a loss", and he gave an answer in the same questionnaire indicating that he believed that he had a claim because press articles and legal advice suggested that he would have been better off transferring his Laing pension to P&O rather than to Norwich Union.

47. The matters particularly relied upon to indicate imputed knowledge were these: despite Norwich Union twice having told Mr Glaister to direct his complaint to Mr Greenwood, he failed to do so until February 1996; the SIB factsheet of October 1994, which he saw in April 1995, suggested to persons who had opted out of occupational pension schemes, and who had known or suspected for some time that they had been badly advised, that they might wish to ask for an especially urgent review on that ground, or might wish to take steps to ensure that their right to redress was not lost through lapse of time; there was no basis for a reasonable person to have delayed obtaining advice.

Actual knowledge

48. In my judgment Mr Glaister did not have actual knowledge of the alleged loss before November 11, 1995, three years before the issue of proceedings. His first letter to Norwich Union did no more than put them on notice that he would seek recompense if it should transpire that he had suffered a loss. Although he would have seen from the SIB May 1994 factsheet on opting out of occupational schemes and from various press reports that employees would usually be better off not opting out of occupational schemes and that one of the disadvantages of insurance company schemes was the level of commission deducted, Mr Glaister had not opted out his occupational scheme, and he had not (so far as he knew) paid commission from the transfer value of his Laing benefits. The October SIB factsheet (received in April 1995) said that personal pensions had been a good investment for many. In the course of 1995 Mr Glaister was seeking to use the PIA investigation to determine whether he had a claim, and I have no reason to doubt his evidence that he did not know whether the review would indicate that he had a claim. Nor do I consider that his answers to the ICS preliminary questionnaire in February 1996 show that in 1995 he had knowledge of the damage.

49. I am satisfied, therefore, that although Mr Glaister thought that Mr Greenwood had not advised him adequately, and although he may have had suspicions or concerns that he had suffered damage as a result, he did not have actual knowledge of the alleged damage before November 11, 1995, nor at any time before he received on about February 8, 1997 the advice from the actuaries dated February 4, 1997, when they tentatively indicated that there might be a difference in current values of between Ł600 and Ł2400, but that the criteria were sufficiently flexible to justify alternative conclusions of a larger loss, or that Mr Glaister had actually benefited. In the light of the decisions of the Court of Appeal which indicate that, for the purposes of section 14A(7), knowledge of relatively trivial damage is sufficient to start time running, February 4, 1997 in my judgment is a date which is more appropriate than either December 4, 1996 when the actuaries advised, on the basis of the information which they had, that it appeared that Mr Glaister had not suffered a loss, or August 19, 1998 when the ICS indicated that his loss was Ł48,024. That a date in February 1997 is the date when Mr Glaister acquired actual knowledge is also consistent with his letter of March 7, 1997 when he wrote to Mr Greenwood claiming Ł2365.48 (and Ł250 in expenses).

Imputed knowledge

50. The next question is whether, on the hypothesis that the Norwich Union policy was less valuable than the transfer of the Laing benefits to the P&O scheme, that was ascertainable by Mr Glaister by April 1995 (which is the date pleaded by Mr Greenwood) without the help of appropriate expert advice. I have no doubt that he could not reasonably have been expected to acquire knowledge of the damage from facts ascertainable without expert advice. In this regard it is again relevant that he had no reason to believe that commission was deducted, and this is not a case where he was losing the benefit of employer's contributions.

51. The final question is whether he might reasonably have been expected to acquire knowledge of the damage from facts ascertainable with the help of appropriate expert advice which it was reasonable for him to seek.

52. I do not consider that in the circumstances of this case Mr Glaister is fixed with imputed knowledge of the loss at a date in or before April 1995 (the pleaded date) on the basis that he might reasonably have been expected to acquire that knowledge with expert advice which it was reasonable for him to seek. First, when Mr Glaister did obtain actuarial advice, it took five months for the actuaries to come to a view that there had been a small loss. Mr Glaister gave instructions in September 1996 to his solicitors to obtain actuarial advice; the preliminary view of the actuaries in December 1996 was that he had not suffered a loss, and it was only two months later in February 1997 that they advised that a small loss had occurred. On the basis that Mr Greenwood has pleaded April 1995 as the date by which Mr Glaister should reasonably have acquired the knowledge, and that it has not been suggested that he or his solicitors failed to take reasonable steps once they had decided to obtain actuarial advice, it follows that Mr Greenwood is alleging that Mr Glaister should have set in train before December 1994 steps to obtain actuarial advice, which would have been obtained by April 1995 and which would have shown a loss: cf the proviso to section 14A(10). All that had happened by December 1994 was that Mr Glaister was aware of the investigations being undertaken by the regulators, and that he had notified a possible claim to Norwich Union, who had referred him to Mr Greenwood, with whom he had not been in touch. I do not consider the material on the industry awards to the P&O scheme affected his position. None of these matters would have led a reasonable person to seek legal and actuarial advice.

53. But I do not think it matters whether the critical date is April 1995 or some later date prior to November 11, 1995, nor, in particular, that in April 1995 he received the SIB factsheet suggesting that those who had known or suspected for some time that they had been badly advised "may wish to take steps to ensure that your right to redress is not lost through lapse of time". All of the material which he received (with one exception to be dealt with below) gave him (as it would to any reasonable person) the very clear message that any losses caused as a result of pensions mis-selling would be dealt with by the insurance companies and investment advisers concerned under the supervision of the PIA or other regulators, except where investment advisers were in default, when it would be dealt with by the ICS.

54. It is necessary to look at this suggestion through the eyes of the reasonable person reading the document as a whole, the main points of which I have set out at paragraph 19 above, and where I referred to the similar suggestion that persons in priority groups who had known or suspected for some time that they had been badly advised might have to protect their rights and should take professional advice. It seems to me that the document gives the clearest possible impression that the paragraph has been inserted to protect the position of the SIB rather than to be a warning which should be acted upon by seeking legal advice and commencing proceedings. The factsheet referred to the fact that 5 million personal pensions had been sold since 1988 (already more than six years before) and that regulators were requiring investment firms to review policies sold since 1988. Since the pensions mis-selling had come to light in 1993 there must have been tens (if not hundreds) of thousands who had "known or suspected for some time" that they had been badly advised, and if the suggestion had been intended to be acted upon it would have been expressed more clearly and more emphatically. If it had been, many thousands of individuals would have been put to the expense of seeking wholly unnecessary legal advice. I accept the submission on behalf of Mr Glaister that the whole tenor of the leaflets was to calm fears and assure holders of personal pensions that the authorities had set up an automatic review procedure through which they would obtain redress from the insurance companies and independent financial advisers or from the ICS.

55. My conclusion therefore is that Mr Glaister first had actual knowledge of the damage when he was advised by actuaries in February 1997 that on present values his loss was between Ł600 and Ł2400. I will allow amendment of the reply to reflect that date rather than the later date which was pleaded by amendment or the earlier date which was originally pleaded. In my judgment there is no basis for concluding that Mr Glaister should reasonably have been expected to acquire knowledge of the damage from facts ascertainable by him with the help of appropriate expert advice in or before April 1995, the pleaded date, and I would have come to the same conclusion if a later date prior to November 11, 1995 had been pleaded.

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