England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BIRMINGHAM DISTRICT REGISTRY

		Birmingham Civil Justice Centre Bull Street, Birmingham B4 6DS
		18/10/2013

HHJ David Cooke:

Introduction

1. The claimants are the Trustees in bankruptcy of Clifford Jude Shore. The defendant firm of solicitors acted for Mr Shore in a claim against Sedgwick Financial Services Ltd ("SFS") alleging negligent advice in relation to the transfer in 1997 of his benefits under various defined benefit occupational pension schemes into a private scheme from which he then took a pension by way of draw down (as distinct from purchase of an annuity). He suffered a very substantial loss of pension from two causes; initially the amount he was permitted to draw down annually was limited by reference to a percentage set by the Government Actuary's Department ("GAD") which was reduced because of falls in the yield on the gilts on which it was based, and later the capital value of his funds fell because of investment losses. The combination reduced his pension drawings from over £45,000 pa to about £12,000 pa by early 2003.
2. The original claim was dismissed at trial by Beatson J in a judgment handed down in November 2008. An appeal was dismissed by the Court of Appeal. Mr Shore was unable to pay his liability for adverse costs and was made bankrupt as a result. The present action is brought by his Trustees and alleges, in summary, that Mr Shore would never have brought the claim, or alternatively would have taken one of a number of opportunities to accept low settlement or "drop hands" offers, if the solicitors had advised him, as they should have, that the claim was at all times doomed to fail on limitation grounds. Sadly, Mr Shore died before this claim came to trial. The damages claimed on behalf of his estate in bankruptcy are some £1.3m consisting of his own costs of the original claim, the adverse costs ordered against him and the costs of the bankruptcy administration.
3. Limitation had always been known to be a central issue in the claim, which had two aspects to it. The primary claim alleged a failure to advise that Mr Shore should not transfer his benefits out of the occupational scheme at all. That transfer was completed by 28 April 1997. The secondary claim related to advice given when Mr Shore resigned his employment and exercised his option to draw down from the private pension fund at the maximum permissible rate, which he did from 1 July 1997. It was alleged that he should have been advised to purchase an annuity at that point, rather than take the draw down option. In the case of both claims, therefore, the six year primary limitation period applicable to a claim in contract or tort in relation to the advice given had on the face of it already expired by the time Mr Shore consulted Irwin Mitchell in August 2004 and it was necessary to consider whether a claim could nevertheless be brought using the provisions of s14A Limitation Act 1980, on the basis that Mr Shore did not acquire the relevant knowledge of the facts giving rise to his claim until less than 3 years before it was issued.

The claim against SFS

4. With that broad introduction, it is convenient to set out the history of the claim in greater detail before considering the law and allegations against Irwin Mitchell in this case.
5. Mr Shore was born on 7 October 1940, and so would reach 60 in 2000. By 1996 he had been the Managing Director of Avesta Sheffield Distribution Ltd ("Avesta") since 1984 and had accumulated substantial benefits in Avesta's pension scheme. He also had smaller deferred benefits in schemes run by two previous employers. He would have been entitled at age 60 (the Normal Retirement Age of the Avesta scheme) to a pension of two thirds final salary, with the option to commute part for a tax free lump sum. If he died after retirement, his widow would have received a pension at half the rate applicable to him, plus a lump sum if his death occurred in the first five years. He could retire before age 60, taking his benefits at a rate reduced by 12% pa compound in respect of the period of acceleration.
6. The benefits accrued were substantial, reflecting his senior position and length of service. If Mr Shore had drawn benefits from age 60, he would have been entitled to a pension of £70,600, of which he could commute part to take a maximum lump sum of £155,000 plus a reduced pension of £54,900 pa. If he retired early in January 1997 (it had been his intention to retire at some point in 1997) the pension reduced for early retirement would have been £47,300 pa, of which he could commute part to take a maximum lump sum of £140,000 and a reduced pension of £34,300 pa.
7. In or about June 1996 British Steel acquired control of Avesta, and in October 1996 Avesta's directors decided to wind up its pension scheme. Members had the options (a) to transfer immediately to a British Steel scheme (b) to leave benefits in the Avesta scheme until retirement and then transfer to the British Steel scheme or (c) take a transfer payment to a private scheme of their choice. If Mr Shore had elected to stay in the Avesta scheme he would in due course have been paid all the benefits accrued under it set out above, albeit from the British Steel scheme. It would become his case however that he was not aware that he could have remained in the Avesta scheme notwithstanding its winding up, and not advised that it was open to him until he consulted a pensions adviser in 2004.
8. In January 1997 Mr Shore consulted a Mr Ormond, an employee of SFS who advised him to transfer his benefits to a private scheme administered by Scottish Equitable, from which he would have the option to defer purchase of an annuity until age 75 and in the meantime draw down by way of income the maximum possible amount each year. It appears that this mechanism was hit upon in order to provide an initial income comparable with immediate drawing of the Avesta pension, and that some indication was given that investment return in the Scottish Equitable scheme could increase the value of the fund and the drawdown available by a substantial amount in future.
9. The maximum permitted draw down was in fact limited to a percentage set by GAD, which was subject to triennial review (referred to in this case as "the GAD rate"). Further, SFS's own policy was not to advise a client to draw down more than 75% of the maximum, in order to avoid excessive depletion of capital. The fund would be invested in stocks and shares and exposed to risk as a result. Mr Shore's allegations (D1/2/p9) were that none of these factors was explained to him. Further (D1/2/p14) that he should have been advised to remain in the Avesta scheme and defer drawing his pension until age 60, thereby in effect increasing his available pension benefits at 12% pa compound in the meantime.
10. In reliance on this advice Mr Shore made transfers into two Scottish Equitable funds from all his occupational policies, totalling some £690,000.
11. On 3 December 1999 Mr Shore spoke to a different employee of SFS, Mr Fry, who told him that it would be against their advice to draw down more than 75% of the GAD rate, and that there was bound to be a reduction in the GAD rate at the next review because of the fall in interest rates. At this point, it appears that the focus of Mr Shore's concern was that it was unsatisfactory that the law prevented him from drawing down at more than the GAD rate, and he complained to his MP about that.
12. In January 2000, the business of SFS was transferred to a new company, Sedgwick Independent Financial Consultants Ltd ("SIFC"), a subsidiary of Barclays Financial Planning Ltd. Mr Shore continued to deal with Mr Fry. On 18 May 2000 he met Mr Fry and his manager Mr Gibbs and told them he would not have entered into the drawdown scheme if he had understood it. His evidence was that he told them he wanted to complain, but was talked out of it on the basis that his underlying investment (ie the Scottish Equitable fund) was sound and the income reduction would be corrected either by improvements in annuity rates or a change in legislation to remove the GAD rate restriction. Two days later Mr Fry wrote to confirm that as a result of the forthcoming review his drawdown would be reduced from £46,643 to £32,578, approximately 30%, from July that year.
13. On 11 October 2002 Mr Shore met Mr Lancaster of SFS and expressed his anger that his fund was now valued at just £204,000 and his income was likely to fall to £12,000 from May 2003 (in fact it fell to £15,671). He complained in writing to SIFC by letter of 13 October 2002, but his complaints were dismissed by SFS and SIFC. Not satisfied with this he complained to the Financial Ombudsman Service ("FOS") on a complaint form dated 23 January 2003. In that form he set out the problem he was complaining about as having occurred in May 1997 when he "was mis-sold a draw down pension" and that "from 1 July 2002 the management of my pension + advice was non existent resulting in catastrophic loss…". He said in answer to questions on the form that he had realised the advice might be unsatisfactory in May 2000 and had complained to SFS/SIFC in May 2000 and in writing on 13 October 2002.
14. The thrust of his complaint was not at that stage that he should not have been advised to leave the Avesta scheme, but that he should have been advised to purchase an annuity instead of electing to draw down from the Scottish Equitable fund. By letter of 13 May 2004 the Adjudicator to FOS indicated that SIFC ought to have advised purchase of an annuity at the first triennial review, ie in May 2000, but Mr Shore responded asserting that he should have been given that advice earlier, in July 1997. The Adjudicator by letter of 3 August 2004 asked him to explain his reasons.
15. That was how matters stood when Mr Shore was introduced to the defendants by a financial adviser Mr Erskine, particularly to Mr Alan Owens who came to be the partner in charge of his case. Mr Owens sent an initial letter dated 17 August 2004 enclosing standard terms of business and they met on 7 September. The letter referred to provision of a preliminary opinion on the merits of a claim against SFS and limitation, but no advice was given about limitation at or immediately after the meeting.
16. The focus was instead on pursuing the FOS complaint. Mr Owens sought and on 8 October was provided with a copy of the FOS file. After a further meeting with Mr Shore and Mr Erskine on 27 October 2004 Mr Owens wrote to the FOS expanding the complaint and stating that Mr Shore should not have been advised to transfer out of the Avesta scheme at all.
17. Initially this appeared to have been successful. The Adjudicator wrote on 16 December to say that SIFC no longer disputed the claim and would conduct a review comparing the benefits Mr Shore would have received had he stayed in the Avesta scheme with those under the Scottish Equitable plan and that he would be compensated by being placed as nearly as possible in the position he would have been in had he taken benefits from the Avesta scheme. However, when the review was concluded SIFC wrote on 6 June 2005 asserting that no loss had been suffered on the transfer because, in effect, the capital value of the drawdown scheme at the point of transfer was the same as the value of the rights surrendered in the Avesta scheme.
18. At this point Mr Owens advised that further progress would require proceedings to be issued, and with Mr Shore's agreement instructed Mr Ben Elkington of counsel (then an experienced junior in professional indemnity matters and now a QC) to settle Particulars of Claim and advise in writing. His first advice was dated 27 June 2005 and included the following:

"11. On the assumption that Mr Shore's evidence is as set out in the Particulars of Claim, and on the assumption that his evidence is accepted, then I believe that he has a good claim against both SFS and SIFC in relation to liability, causation and loss.

12. There is, however, one further issue in relation to the claim against SFS that has not yet fallen to be considered by the FOS, which is the issue of limitation… his claim against SFS is time-barred unless he can take advantage of section 14A of the Limitation Act1985.

13. Section 14A provides that a claim may be brought within three years of the relevant "starting date". In essence the starting date is the first date on which the claimant knew or ought to have known that he had suffered a loss, and that the loss was attributable to the fact of the matters complained of. There is frequently a real dispute over precisely what knowledge is required before the three-year period runs.

14. Having reviewed the papers, there are a number of documents which suggest that Mr Shaw had the relevant knowledge in relation to his claim against SFS more than three years ago… [he referred to three documents, the file note of a conversation on 15 December 1999 with Mr Fry, a letter of 27 October 2002 stating that a complaint had been made to Mr Fry in 2000 and the FOS complaint form of January 2003 which indicated a complaint to Mr Fry in June 2000].

15. Based on these documents, it is my view that there is a very real risk that the court would find that Mr Shaw had the necessary knowledge to bring a claim against SFS more than three years ago. Plainly by June 2000 he knew that (i) SFS had advised him to take out the Scottish Equitable policies (ii) in reliance on that advice he had done so, and had left the Avesta scheme (iii) the maximum income allowable under the Scottish Equitable plan was dependent on the GAD rate, which was reset every three years, (iv) as a result of the change in the GAD rate, from 2000 his income had reduced (v) his new maximum income was less than the income he would have received had he retained his benefits under the Avesta scheme and (vi) he maintained that had he been properly been advised in 1997 he would not have purchased the income withdrawal scheme.

16. Such an analysis begs the question what Mr Shore did not know in 2000. This is a matter that he must address in his draft witness statement. Plainly the fact that Mr Shore was a successful businessman and a trustee of the Avesta scheme will not assist his case that he did not have the relevant knowledge in 2000.

17. It may be that what Mr Shore did not know in 2000 was that he had in fact suffered a loss. For he heard nothing from SFS or SIFC between June 2000 and October 2002 and (as I understand it) it was not until October 2002 that he learnt that the value of the pension fund had fallen dramatically. If that is right, then he can argue that the three year time limit should begin to run from the date on which he first learnt of the fall in the value of his pension fund (and Mr Shore should be asked to clarify exactly when that date was). If proceedings are to be issued I recommend that they are issued before the third anniversary of that date. " (emphasis in original)

19. Mr Shore's pleaded case is that he does not recall receiving this advice note, but this point was not pursued with any degree of force on his behalf and I find that he must have been sent and read it. Mr Owens sent it to him by an e-mail on 27 June (E3/584) which recorded an agreement to speak the following day. That conversation took place and Mr Owens' note of it (E3 595) begins "explaining context of BE's advice-generally more positive than it must read-advice note pulls out risk factors but does not conc[entrate] on better part of claim as not full advice." He goes on to record Mr Shore's instructions on various matters including that he had been told by Mr Fry and Mr Gibbs "fund performing well, but GAD rate halved. Government looking to change rules-they expected rules to change. I didn't think lost anything less [sic, ? 'other'] than income and expected fund to return." This is plainly arising from the advice and could not realistically have taken place without Mr Owens finding out, if it had been the case, that Mr Shore had not seen the advice note. There was a conference with Mr Elkington on 29 June (attended by Mr Shore on the telephone) lasting about 1 ¾ hours discussing his advice, again implausible if Mr Shore had not received it.
20. This advice clearly records the position as Mr Elkington saw it in relation to primary limitation, the need to rely on s14A and the difficulty posed by the unhelpful documents on file. It suggests an argument that might be relied on but states that there is a 'very real risk' that the argument will fail. The argument that Mr Shore did not know he had suffered a loss was not on the face of it hopeless- he knew he had been restricted in his drawings but that necessarily meant the undrawn amounts were still in the fund and available in future to buy an annuity or for drawing if and when the GAD rate restriction was removed. Moreover, it would be unattractive for SFS to rely on this as relevant knowledge if it had at the time sought to talk Mr Shore out of a claim on the basis that his position would be corrected over time. Mr Owens was clearly aware of the risks; he discussed the limitation issue with Mr Elkington by telephone on 27 June when the advice was received (E3/595) and the notes of the conference on 29 June (E3/601) make plain that it was a principal subject of discussion then. Mr Shore was asked when he first discovered the collapse in value of his fund, which he said was in mid September 2002. Prior to that he said he had heard nothing since he had been convinced in 2000 that everything was OK, the fall in the GAD rate would be looked into by the FSA and his fund would be OK.
21. Mr Elkington repeated his advice that " [I] can't advise there is no risk court won't say you should have known you'd incurred a loss". Mr Shore asked him at the end if he was still positive and Mr Elkington said he was (E3/609).
22. On 10 August 2005 Mr Owens sent a letter to Mr Shore (E3/612) enclosing some additional documents disclosed by SIFC. One of them he noted was:

" the file note of 29 September 1997 in which you show concern that they may be a "downturn in the market" and you are "feeling exposed". That is helpful in the sense that staying with the Avesta pension would not have exposed you in that way but on the other hand it shows that as early as September 1997 you may have had concerns about having the wrong product. That is another small piece in the time limit picture that may prove to be unhelpful. "

23. There was a further conference with Mr Elkington on 8 September 2005. In advance, Mr Owens sent documents including three lever arch files of relevant documentation (E3/615) and Mr Elkington prepared an agenda for the meeting and an updated chronology based on his review of the documents sent to him. It is not clear whether the file note of 29 September 1997 was included in the documents sent; there is no apparent reason why it would not have been, but it is not among the matters listed in Mr Elkington's chronology. In the course of that conference, Mr Shore told counsel that he would not have taken the Scottish Equitable fund if he had known that it was at risk, and that he had not known it was invested on the open market. He said that Sedgwick had told him it was "in protected funds". It was pointed out however that one of the file notes showed that he had been advised there was an investment risk, which he had accepted (E3/628) and, no doubt as a result, records that "complaint that no investment risk- faces real problems as discussed."
24. There is then a discussion about limitation, and the file note records the advice that the relevant period was three years from his discovery of the "relevant facts". The note records matters that he knew in 1997 and in 2000, one of which is "[fund exposed to stock market]", the square brackets perhaps indicating that Mr Shore did not accept, despite the documentary record, that this was a matter he knew about. It appears that the file note may not be complete, but it ends (E3/630) with Mr Shore saying "in ' 97- no idea. In '00- had better idea." In the context of what had been discussed immediately before, it appears that this also relates to the question whether the funds were exposed to stock market risk, and that Mr Shore may have been accepting, somewhat grudgingly, that he had some idea that they were so exposed by 2000.
25. Mr Elkington then settled draft particulars of claim, which Mr Shore approved, and which were served in January 2006. A defence was served, and Mr Elkington subsequently drafted amended particulars of claim, which he sent with an e-mail to Mr Owens on 11 April 2006 (E3/672) in which he said:

" As agreed I will draft a Reply as and when we have Mr Shore's detailed paragraph by paragraph response to the Defence filed by SFS. Ideally I would like his response to be cross-referenced to the chronological bundles of documents that we all have. This will be a useful exercise in any event as a preliminary to the drafting of a full witness statement (which I again suggest should be done sooner rather than later).

You have asked me to set out my thoughts on the merits of Mr Shore's position now that we have seen SFS' defence. My thoughts are as follows.

In relation to the claim against SFS, the Defence contains no real surprises. As expected, the limitation point has been taken. This undoubtedly carries some risk for Mr Shore, as set out in my previous advice note. However, I think that there is a good argument that he did not have the knowledge required to start time running for the purposes of section 14A until he discovered the collapse of his fund in October 2002…

In relation to the claim against SIFC, there is no limitation difficulty…

Overall I remain optimistic about Mr Shore's prospects of success...

If Mr Shore would like a follow-up formal advice, do let me know. However I suggest that such an advice should not be prepared until I have seen (a) a draft witness statement from Mr Shore, and (b) SIFC's defence "

26. The defence served by SFS pleaded that the relevant limitation dates for the purposes of section 14A were, in the case of the primary claim (advice to transfer out of the Avesta scheme) 28 April 1997 and in respect of the secondary claim (failure to advise purchase of an annuity in July 1997) 31 July 1997. Both pleadings were made on the basis, essentially, that Mr Shore knew at the time the nature and inherent risks of the products he was buying.
27. The Reply drafted by Mr Elkington pleaded a new point in relation to the primary limitation period. This was derived from the decision of the House of Lords in Law Society v Sephton [2006] 2 AC 543. The contention was that Mr Shore had not suffered an actual loss on the transfer of his fund out of the Avesta scheme, but only a contingent loss (any actual loss only occurring when the value of the fund fell) which was not sufficient to complete his cause of action and start time running. Mr Elkington's evidence was that he always regarded this point as arguable, but not in the end likely to succeed. He advised Mr Shore in those terms. It did not detract from the main argument based on s 14A.
28. On 3 July 2006 Naomi Griffin of Irwin Mitchell sent Mr Shore draft responses to requests for further information from both SFS and SIFC, for him to check and give instructions. Ms Griffin was an Australian qualified lawyer working in the UK and thenceforward acted as Mr Owens' assistant on Mr Shore's case. Mr Shore replied suggesting some amendments, and the next day Ms Griffin told him she would refer the draft to Mr Elkington "as he is closer to the legal arguments he will want to run". On 5 July she discussed the case with Mr Owens, including issues relating to the contingent loss point and the extent of Mr Shore's relevant knowledge at various dates. Her notes are at E3/741, and do not express any conclusion on the limitation points.
29. There was a further conference with Mr Elkington on 6 July 2006, attended by Mr Owens and Ms Griffin but not Mr Shore. The notes (E3/745) show that the Sephton point was discussed, and that counsel said he was now more confident on the s14A point. He made a comparison between the income actually received by Mr Shore and that which he would have received if properly advised. On the primary case, he would have remained in the Avesta scheme and received no income from it until age 60, so that by transferring and drawing income he was for at least 3 years better off, in terms of income drawn, than he would have been. Some graphs prepared by Ms Griffin illustrating this were produced and discussed. On the secondary case, had he purchased an annuity straight away the amount of it would have been less than he was initially able to take by way of drawdown until the review in 2000. The value of the fund had been maintained between 1997 and 2000, and until its performance deteriorated to the point where it was worth less than the transfer value, no loss had been suffered due to investment performance. He advised that expert evidence be sought as to the point at which this had occurred.
30. This was the case in respect of the date on which loss was suffered that was advanced in the Pt 18 response drafted by Mr Elkington and served on 20 July 2006 (D1/15A). It pleaded also that Mr Shore did not become aware of such loss, having heard nothing about the value of his fund between 2000 and 2002, until 9 October 2002, and further that he was not aware that such loss could be attributed to an act or omission said to constitute negligence by SFS until he was advised by Mr Erskine in October 2004.
31. Mr Shore was in frequent contact at this time with Ms Griffin, who was working on a draft of his witness statement. He attended a meeting on 20 July with Mr Owens and Ms Griffin (E4/764) at which they discussed the prospects generally and whether to initiate settlement negotiations, in light of a recently received offer of £25,000 plus costs from SIFC, which Mr Owens did not recommend Mr Shore to accept, as he felt there was "a bit more to come". Mr Shore was apparently feeling low about the case - he had told Ms Griffin a few days before that he wanted to settle, and at the meeting he said that he and his wife were "sick of it", he wanted it to go away, it had been on his mind for four years and he did not wish to wait another year. Nevertheless he did not instruct Mr Owens to accept the SIFC offer, and on 24 July (E4/768) asked him to set up an informal meeting and suggest a mediation, saying that he did not want to accept the £25,000, though he had not ruled it out, and was now "feeling better about case [compared with] a fortnight ago- only settle if get right figure".
32. On 20 July Mr Owens told Mr Shore that Ms Griffin was going to consider the strengths and weaknesses of the case. That led to her producing various documents including a table headed "settlement considerations" (E4/807) with lists of "strengths and weaknesses" in the cases against SFS and SIFC, which Ms Griffin and Mr Owens discussed at an internal meeting on 26 July, following which on 28 July Ms Griffin produced (E4/813) a "note of advice for discussion with Mr Shore in relation to settlement" and an updated version of the "settlement considerations" note. These notes did not deal solely with the limitation points, they addressed also establishment of a duty, breach and causation, and considerations of Mr Shore's likely performance as a witness. They also included a statistical analysis of the probability of success, ascribing percentage chances of success to each of four factors (duty, breach, causation and limitation) in each claim, and an assessment of the likely range of damages, leading to a conclusion that "an appropriate measure of damages would be settlement of both claims for between £35,000- £125,000 plus costs."
33. This advice was conveyed by Mr Owens in a telephone conversation with Mr Shore on 1 August 2006, of which Ms Griffin took a note (E4/825). Mr Shore was told that the assessment of his case was statistically complicated because of the number of possible outcomes, but it was estimated he had a 60-65% chance of success against one or other defendant (consistent with the analysis referred to above), but the result for him in money terms would depend on which case was won and the level of costs. If he succeeded against SFS he might win £600,000 damages plus his costs. If against SIFC only he might win £200,000 damages but only costs against one defendant, and if he lost against both he might face a costs liability of £600,000. There was then a detailed discussion of settlement options and tactics, at the end of which it was agreed to make an offer to settle for £200,000 plus costs. The advice was summarised in a letter dated 7 August, recommending a Part 36 offer seeking at least £200,000 and enclosing a draft of such an offer, for settlement against both defendants, of £226,180 "as per your instructions". The offer was sent on 8 August (E4/835).
34. An amended defence was served by SFS on 20 August 2006, maintaining its case that the relevant dates for s 14A purposes were in 1997. This was sent to Mr Shore for his instructions, together with a further draft of his witness statement, by Ms Griffin on 24 August. They spoke on the telephone on 30 August, discussing the limitation issues and relative prospects against each defendant. Mr Shore sent an email the next day in which he gave a rather mixed impression of his appetite for continuing the case:

"The impression I am left with is that the case against Barclays [ie SIFC] is much more certain to achieve a positive outcome than the case against Mercers [ie SFS]…

I… notice that there are signs on both their parts to settle this matter albeit at levels that I am still not prepared to accept. I do however now feel that there is a case for separate mediation negotiations with both parties. .. I would like to see this matter over as soon as possible. I find the possibility of meeting both defendants in court with the potential cost implications to be prohibitive without a clear prediction of a positive outcome.

In conclusion what I seek is a negotiated conclusion with both parties probably separately but with Barclays first. Should we conclude with Barclays but not Mercers I would consider the possibility of continuing the action against Mercers if that is advised as a realistic possibility.

I also feel that both parties should retain the impression that I would be prepared to go all the way to court if necessary... My financial objectives have not changed. They remain coverage of my costs and reasonable financial settlement but I would like to bring this matter to a rapid conclusion. Both defendants have deliberately delayed as long as possible and I am seeking to conclude."

35. There is an undated file note of a telephone conversation, presumably at or about the same time (E4/878), in which Mr Shore said that he found the possibility of losing against both defendants prohibitive, that he expected to come out of the litigation "with something like £300,000", although Ms Griffin told him this was unrealistic given the offer that had been made to the defendants, and noted "CS looking for:-wants out - mediation".
36. Ms Griffin held a conference with counsel on 5 December 2006 (not attended by Mr Shore). She prepared an agenda, and Mr Elkington provided in advance drafts of a proposed Reply and responses to part 18 requests from both defendants. Her note of this discussion insofar as it relates to limitation indicates that counsel's advice was that the case on limitation was "arguable", that on the issue of the date of loss the facts could be distinguished from those in Sephton, and that the case on the date of knowledge for the purposes of section 14A depended on Mr Shore's evidence. It concluded that the case was strong enough to survive a strike out. Although it was suggested to Mr Owens that this indicated a low level of confidence in the argument, his evidence was that the discussion on this topic had been with a view to the conclusion that since neither defendant had a realistic possibility of having the case struck out, they would each have an interest in considering realistic settlement proposals. The note records that Ms Griffin and Mr Elkington went on to discuss settlement tactics, and how to get the defendants to a mediation, and also the aspects of the amended defence that Mr Shore would need to respond to. The note concludes by recording a remark, presumably by Mr Elkington: "risk-date of knowledge".
37. There were further discussions and e-mails between Ms Griffin and Mr Shore in September 2006 in which he continued to stress that he wanted to bring the matter to a conclusion, and urged Ms Griffin to do everything she could to achieve an early mediation. She in turn agreed to press Barclays to respond on this.
38. In the meantime, Ms Griffin continued to take Mr Shore's instructions in relation to the draft witness statement. A number of drafts were sent by her to him, which included requests to him to provide additional information or clarify matters, particularly on matters relevant to the limitation issues such as what he had complained about at the various meetings recorded. Mr Shore responded by a combination of comments marked on the draft document and faxes and e-mails sent by him with additional information. A number of these dealt with his meeting on 18 May 2000 with Mr Fry and Mr Gibbs, with Mr Shore emphasising that the thrust of what had been said at that meeting was that he was persuaded out of making a complaint, reiterating that he was told that the restriction on his income was not the fault of SFS but GAD and that matters would be corrected by a removal of the GAD restriction.
39. On 5 December 2006 a draft of the witness statement reflecting Mr Shore's comments was sent to Mr Owen for review. In relation to the meeting on 18 May 2000 Ms Griffin's draft included the following:

" At that meeting, I had a conversation with Messrs Fry and Gibbs in words to the effect:

Me: I have been mis-sold a drawdown pension. No one explained to me GAD rates… "

40. Mr Owen crossed through the words "I have been mis-sold a drawdown pension" and wrote next to them "delete?-Limitation!!". He also suggested changing "I was horrified to see that my level of income would be reduced by more than 30% due to the GAD rate" to "I was very concerned to see…". It was suggested to him that this showed that he realised that the difficulties in the limitation case were much greater than the advice being given to Mr Shore suggested, and that he was concerned not to reveal a degree of knowledge on Mr Shore's part that would amount to a fatal flaw in that case. Mr Owen responded robustly that the way in which this was set out in the statement did not do justice to Mr Shore's position. The reference to the policy being "mis-sold" reflected terminology that he had used later rather than at the time of the meeting in May 2000. It could suggest that he had been concerned about the advice to transfer out of the Avesta scheme when that had not been part of the discussion at all, which had related only to the restrictions imposed on his drawdown by reduction in the GAD rate and the assurances that he had been given of the prospect that this restriction would be removed.
41. Having seen the pleadings and the witness statements, Mr Shore's feelings about the litigation were markedly improved. On 20 December 2006 he sent an e-mail to Ms Griffin (E5/1049)saying:

" in the light of our claim and our five witness statements, when compared to their defence and the Ormond witness statement, I am left feeling very positive about the merits of our case. Unless you were to advise otherwise I would be quite prepared to go to court if a settlement acceptable to me could not be achieved at mediation… I feel at the moment that any settlement should reflect the size of the full claim. I believe our case as put forward by IM and counsel to be compelling whilst theirs lacks any substance or credibility. .. I do not feel in the mood to compromise… now that I have seen both the claim and defence in full, I am prepared to go all the way to court if necessary to maximise my claim. "

42. However his mood plainly fluctuated. On 9 January there is a note, apparently of a telephone conversation between Mr Shore and Ms Griffin, in which Mr Shore referred to "other considerations" including "health" and "stress on family" and said that he "will settle for less as can now support himself via property development/Michael" ["Michael" refers to Mr Shore's brother, who was providing financial support for the litigation].
43. A mediation was arranged for 25 January 2007. In preparation for it Ms Griffin prepared and discussed with Mr Owens a document headed "Litigation Assessment (for purposes of mediation)" (E5/1052) in which, among other things, there was an assessment of the prospects of success against SFS on the limitation issue. She set out in the table various matters under the headings "good fact" or "bad fact". The good facts in relation to when loss had been suffered included the argument based on Sephton, and factors showing that he had received greater amounts by way of income of the drawdown scheme for a number of years than he would have received had they remained in the Avesta scheme. The bad facts included "capital loss in 1997-1999? Check". On this aspect, the assessment was of a 50% prospect of success. In relation to whether Mr Shore was not aware of having suffered loss as a result of negligence by SFS until September 2002, the "good facts" included the report received from an actuary as to when loss was actually suffered, and Mr Shore's evidence that he had been told in 2000 that his funds were healthy but not until 2002 that there had been a "catastrophic loss", and the bad facts included his complaint to the FOS that he had been "mis-sold" the scheme in 2000. On this aspect, the assessment was of a 70% prospect of success. Since success on either issue would have defeated the limitation defence, the overall prospects of success on limitation were assessed at 85% (50% plus 50% x 70%).
44. Although this figure was criticised as being startlingly high, both Mr Owens and Ms Griffin emphasised that the assessment was simply a tool used to inform the advice that they gave to Mr Shore, which was that their overall assessment of the value of the claims, taking account of these probabilities and all the various permutations on quantum, was £132,000. The assessment and this figure were discussed with Mr Shore at a meeting on the day before mediation, at which Mr Shore said that he thought the value of £132,000 was too low (E5/1081B) and that he thought the case was worth "closer to £500,000" and said that he was "confident in [his] case".
45. In preparation for the mediation, SFS submitted a position statement which bluntly took the line that the Spehton argument would fail, and that Mr Shore's evidence as to his date of knowledge would be rejected for various reasons relating to his credibility.
46. The mediation took place, with both defendants, on 25 January 2007 and a settlement was concluded with SIFC for a figure of £140,000 including costs. SFS rejected an offer made on behalf of Mr Shore to accept a further £140,000 from them and made a token offer of £15,000 including costs, which was in turn rejected by Mr Shore. After the mediation, Mr Shore expressed himself happy with the settlement reached with SIFC, and told Ms Griffin in a telephone conversation on 29 January that he now felt that his maximum downside was lower and his maximum upside slightly higher. They discussed the position that SFS were taking and Ms Griffin advised him that there was now a clear idea that they would seek to paint a picture of Mr Shore as having made his own decisions and being a liar, and that if they succeeded in this trial he would lose. She noted that he was potentially vulnerable to the argument that he was confident in making his own decisions and that whilst this was not necessarily fatal, the outcome would depend on his performance in the witness box (E5/1091). Mr Shore said that he was "backing himself" and was "cool about that". He wanted Mr Elkington to approach the case "from [an] adversarial point of view". There was also a discussion about the possibility of securing after the event insurance and a request that Mr Owens should contact insurers to see if a policy could be obtained.
47. The meeting also discussed a further part 36 offer, which was duly made by letter dated 1 February 2007 offering to accept £375,000 plus costs from SFS. It was emphatically rejected, with SFS saying they would hold open their offer of £15,000 from the mediation. Ms Griffin took Mr Shore's instructions which were (E5/1099A) that he did not wish to accept this offer, or put forward any other counter offer.
48. Ms Griffin also wrote to the solicitors for SFS suggesting possible mechanisms for determining limitation as a preliminary issue, either by way of split trial, separate arbitration or timetable of the trial itself. The response from SFS was to agree that the matter might be dealt with at some cost saving by timetabling the trial, but rejecting the other alternatives.
49. Irwin Mitchell sent Mr Shore a letter dated 21 February 2007 summarising the best and worst case scenarios in respect of damages and costs at trial, indicating a best possible result of his receiving damages of £629,000 plus costs, and the worst possible result if he lost and had to pay SFS's costs as well as his own that he would be out of pocket by £370,000. The same letter advised that the question of ATE insurance would be revisited once evidence had been received from the financial expert, together with an updated opinion from counsel which would be required by any insurer considering a policy.
50. There was a further conference with counsel on 9 March 2007, attended by Mr Shore. Both counsel and Irwin Mitchell prepared agendas for this conference, in which issues relating to limitation featured prominently. There are two sets of notes for this conference, one in manuscript by Ms Griffin and a later typed up version. In some respects, the typed version is fuller or clearer than the manuscript notes, and in other cases it could be read as being at variance with them. Ms Griffin's evidence was that she prepared the typed version very shortly after the meeting (indeed she sent it to Mr Shore on 12 March) and that in it she would have used her memory of the meeting to clarify or flesh out the notes she had taken rather hurriedly during the meeting. I accept that the typed notes are therefore a more reliable account of the conference. After an extensive discussion on the draft experts' reports, the meeting moved on to consider SFS's position as set out in their mediation statement. It was noted that SFS had now engaged a QC with a reputation as a tough cross examiner and that the case was likely to make or break on Mr Shore's cross-examination. Mr Elkington advised that there would be "a lot of material for SFS's counsel to work with in cross-examination" (E5/1163). Mr Owens said that it would be harder to get ATE insurance where the case turned on witness evidence, because it would be hard to convince an insurer to underwrite Mr Shore's performance as a witness.
51. In relation to limitation, counsel advised again that in his view the primary limitation period had expired and the relevant limitation period would be under section 14A, for which it would be necessary to show a relevant date of knowledge no earlier than late 2002. Mr Owens is noted as saying that "if the judge is convinced of CS then he will find a way through time limit issue. If the judge isn't persuaded by CS then could use limitation as a way to kick out claim. Also the law is not decided-no one knows what will happen in CS's particular factual circumstances".
52. As to the balance of risk and reward, counsel said that the case was finely balanced, that it was clear that SFS thought they could win the case but could be "winging it" because it was finely balanced. He (counsel) thought SFS had given "rubbish advice". Mr Shore is recorded as saying that "unless he was advised strongly to settle he wants to carry on" and in response to counsel saying that he had doubts about limitation, Mr Shore "thinks there is more evidence for him than against him" (E5/1165).
53. On the question of ATE insurance, Mr Owens expressed doubts about whether a policy could be obtained, saying that the insurer would be being asked to underwrite Mr Shore's evidence and that a cautious underwriter might see it as a "toss of the coin" case. He would make enquiries, but advised Mr Shore not to assume that he would be getting such insurance when planning his finances.
54. On 12 March Ms Griffin had another conversation with Mr Shore on the telephone. It is not clear from the documents whether he had by this stage received the typed note which was sent sometime on the same day. He told her that he had "mixed feelings" following the meeting, thinking that there were a number of positive points but also a number of negatives including the comments from Mr Owens that the case could be decided on the toss of a coin and it was down to the witness evidence. Ms Griffin appears to have relayed to him some of the statistical figures that had been arrived at between herself and Mr Owens as to the probability of overall success as there is reference to "75% possibility on primary case… improved with [SIFC] settlement-closer to 85%". Is not clear exactly what was being discussed at this point, but it is clear that whatever was said was dependent on the view the judge took of the evidence, the note saying that Mr Shore "accepts that depends on CS and witnesses". A little later Mr Shore said that his "concerns [had been] allayed" but that he "accepts areas open to attack on evidence".
55. Towards the end of April, SFS made an enquiry as to how much Mr Shore's costs were, and what ballpark he might consider to settle. Mr Owens passed this on noting that "a deal now at an acceptable level ought to be attractive to you and Mercers". On 16 May Mr Shore spoke to Ms Griffin, saying that he "can be reasonable about settlement figure" and was "more positive than in the past". SFS were told that the costs incurred were approximately £348,000, and on 17 May (E5 1171) Ms Griffin reported to Mr Shore that SFS had said they did not want to make an offer as they thought the costs were much too high, which she regarded as a "bizarre approach to settlement". Mr Shore told her he was "prepared mentally now for trial" and, when asked if SFS came up with £300,000 now would he still go to court, said he "believes in case-taking it to trial-comfortable with that".
56. On 29 May instructions were given to Mr Michael Soole QC to lead Mr Elkington at trial in the light of the fact that SFS would be instructing a leader. Mr Elkington was asked to review the pleadings and evidence, and to discuss them with Mr Soole. Mr Elkington responded on behalf of both counsel in relation to possible amendments to the pleadings. Mr Soole was not asked to deliver any advice in writing, and did not do so. It was his evidence, which I accept, that nevertheless if he had thought the claim was hopeless whether on limitation or any other ground when he reviewed the papers he would immediately have said so.
57. On 12 June 2006 SFS served its proposed Rejoinder (many months after the due date to do so) which for the first time pleaded in detail a series of alternative dates at which Mr Shore was said to have had the knowledge relevant for s 14A as it applied to the primary claim between 2 December 1999 and 30 June 2002. In relation to the secondary claim, the relevant date was pleaded as 15 December 1999. Mr Elkington told Ms Griffin on 14 June in response to this pleading that he and Mr Soole were "continuing to review the limitation position".
58. On 20 June Ms Griffin met Mr Shore with his wife; among other things her note (E5/1200) records "discussed limitation-explained that is a risk-can't promise will get over".
59. There was a joint conference with leading and junior counsel on 21 June 2007, attended by Mr Shore (E5/1201). Mr Soole is noted as saying by way of opening remarks that from his reading of the papers "some depends on Shore/[Ormond] evidence" but that Mr Shore had not received proper professional advice and been sold the wrong product. The note made by Ms Griffin goes on to record Mr Soole saying " diff. on limitation defence- can get over them up but two recent cases-so diff. questions-instinct is can get over-movable on merits…". Asked about this note, both Ms Griffin and Mr Soole said that the first "diff" meant "difficulties" but that the second more likely was short for "different".
60. There was then an extremely detailed review of the chronology, evidence and pleadings, which must have taken a considerable time. Ms Griffin's notes in abbreviated form extend over 30 pages. It included detailed questions to Mr Shore about what was said and what Mr Shore knew at all the key meetings and exchanges with SFS. The conference resumed the following day, this time with the two experts instructed, apparently lasting from 10 am to 4 pm during which their draft reports and all the issues relating to loss and when it occurred were discussed, evidently again in very great detail. Ms Griffin took 40 pages of notes.
61. At 4pm the experts left and the conference continued (E5/1273) for another hour with counsel revisiting with Mr Owens, Ms Griffin and Mr Shore the issues on limitation and particularly his state of knowledge at the relevant dates in 1999, 2000 and 2002. No conclusion is expressed in the notes, but it was clearly a discussion of the points in favour and against Mr Shore's case, with reference to authorities such as Haward v Fawcetts and Glaister v Greenwood.
62. On 25 June Ms Griffin spoke to Mr Shore by telephone for a "debrief on 21/22 June", noting what in the context must be him as saying (E5/1277) "virtually all heard from counsel gave good indication- feel positive" and after discussing again the 6 year and 3 year limitation periods that he felt there was a "good argument" and he was a "lay person- less legalistic- will stop worrying as out of [his control]".
63. On 4 July Mr Soole told Ms Griffin he had received a call from counsel for SFS to discuss settlement. Her note (E5/1279) records:

"We [ie SFS] take view:

1. CS has reconstructed case not consistent with documents- going to cross examine strongly

2. Dead in the water on limitation

3. You are going to lose

However, substantial organisation- interested in buying off risk. Walk away/drop hands"

followed by what is clearly in the context Mr Soole's reaction that he was confident the drop hands offer would be of no interest, and later noting that he suspected Mr Wardell QC for SFS was now "getting in to the merits and making [the] most of limitation" and "core of case is bad advice- limitation is a problem". Mr Soole's evidence was, as was in any event clear from Ms Griffin's note and his own note of the conversation with Mr Wardell (E5/1282), that "dead in the water" was not his expression but what was said to him by Mr Wardell, which he regarded as no more than taking a bullish position on behalf of his clients. It is apparent that Mr Soole reiterated that limitation was a risk, but also that he did not regard the case as hopeless since he was not recommending acceptance of the offer to drop hands.

64. Ms Griffin reported this conversation the same day to Mr Shore, who confirmed that he would not accept the offer and wanted to carry on.
65. The trial began on 10 July and ran till 20 July 2007. Judgment (D3/858) was handed down by Beatson J on 8 November 2007 (having been sent in draft on 29 October and revised in the meantime). The result was summarised by Dyson LJ in the Court of Appeal ([2008] EWCA Civ 863) as follows:

"2. In relation to the primary claim, Beatson J held that (i) there was no breach of the advice duty or the information duty [ie the pleaded duties to advise Mr Shore not to transfer out of the Avesta scheme or provide information to compare the Avesta and Scottish Equitable schemes] by SFS; (ii) if there was a breach of the advice duty, Mr Shore suffered no loss because, even if he had been advised to defer taking his benefits under the Avesta scheme until the age of 60, he would not have accepted the advice (the judge made no separate finding as to causation in relation to the information duty); (iii) the claim was statute-barred because Mr Shore first suffered loss no later than about the beginning of 1999 when annuity rates (which had fallen since he entered into the PFW scheme) reached a new low; and (iv) Mr Shore could not take advantage of the knowledge provisions of section 14A of the Limitation Act 1980 to extend the limitation period because he had the requisite knowledge before 29 September 2002.

3. In relation to the secondary claim, the judge held that (i) there was a breach of the advice duty by SFS; (ii) if Mr Shore had been advised to purchase an annuity in place of the PFW scheme, he would have acted on that advice; (iii) the claim was statute-barred for the same reasons as the primary claim; and (iv) section 14A did not avail Mr Shore for the same reasons as in relation to the primary claim."

66. Beatson J thus accepted in principle the Sephton argument that no loss had been suffered at the date of transfer (judgment, para 204), but found that loss had occurred thereafter when annuity rates changed rather than the later date for which Mr Shore had contended (para 214). He held in relation to s14A that Mr Shore knew of his loss of entitlement to income, of the failure to advise him to purchase an annuity and of the breach of policy in advising him to draw more than 75% of the GAD rate, by December 1999 or at latest May 2000. These were held sufficient to constitute "broad knowledge" of the loss and potential attribution to advice given by SFS (judgment, para 236) which, on the authorities, was sufficient to start the 3 year period running. The argument that reassurance as to the underlying fund value negatived such knowledge was rejected (judgment para 237) because the complaint related to loss of income, not loss of capital.
67. Beatson J also held that the pleaded "advice duty" did not arise (judgment para 170). Permission to appeal was sought on all grounds in relation to the primary claim, but refused by Gage LJ on the basis that although points on breach of duty (and presumably existence of duty) and limitation were arguable, Mr Shore could not overcome the finding that he would not have accepted any advice to stay in the Avesta scheme in any event. In relation to the secondary claim the appeal was put only in relation to the findings on the expiry of the primary limitation period, not the s14A period. The basis of this was that it was inconsistent for the judge to find that no actual loss (but only a contingent loss) had been suffered at the date of transfer but that loss had been suffered in December 1999 when annuity rates had fallen although there had been no actual loss of income until June 2000. Permission was given on that ground. In its judgment the Court of Appeal held that the judge was wrong to have accepted the Sephton argument, and that relevant loss had been suffered on the primary claim at the date of transfer because at that point Mr Shore obtained a product that was less suitable for his subjective needs (in that it was more risky) even though it had the same financial value as his rights given up in the Avesta scheme. On the same basis loss was suffered for the purpose of the secondary claim at the point in July 1997 when he failed to obtain a secure annuity (CA judgment para 70).

The case against Irwin Mitchell

68. The pleaded case against Irwin Mitchell is, at its core, that "Mr Shore was not warned adequately or at all that his primary and secondary claims were statute barred" (Particulars of Claim para 172). This puts the matter in unrealistically stark terms; Mr Khangure accepted that both Mr Owens and Mr Elkington had advised that the primary limitation period had passed (skeleton para 48) and said they were correct to do so. In cross examination and submissions he criticised the fact that the Sephton argument was run, the effect of which if successful could have been that primary limitation had not in fact expired, but it seems to me this adds nothing to his case; it is perfectly apparent that counsel's advice to Mr Shore (and Irwin Mitchell's, to the extent they advised themselves or followed counsel's advice on the point) was that the Sephton point was arguable but unlikely in the end to succeed, and the case stood or fell on the arguments under s14A. The Sephton point was an addition to the case that might have brought benefits but could not detract from the main case being run. In the event, that advice may if anything have been too cautious; Beatson J did accept the Sephton argument in principle (although having done so he then found the date on which actual rather than contingent loss had occurred to have been in 1999, a date which it appears had not been contended for by SFS). The Court of Appeal held that Beatson J was wrong on the point of principle, but it seems to me that this difference of opinion emphasises the general difficulty of the law in the area of limitation, and cannot show that it was wrong, still less harmful to Mr Shore's case, to run the point.
69. Whether the claims "were statute barred" then turned on the prospects of success in the s14A arguments. Mr Khangure put his case on the basis that in truth the claim was hopeless from the start and Mr Shore should have been told so, but also argued that insofar as it could not be said the claim was hopeless, Irwin Mitchell underplayed the risks and gave overoptimistic advice as to the prospects of success on the limitation issue. If Mr Shore had been given "proper advice" he would either not have issued, or would have settled the case at one or other of the points at which he had an opportunity to do so. Mr Flenley submitted that such a case was not pleaded, but I do not accept that. Para 172 of the Particulars of Claim expresses the limitation issue in absolute terms, but elsewhere the element of uncertainty is recognised; eg para 174 pleads that Mr Shore would not have issued if warned that the claims were statute barred "or that there was a significant risk that they might have been". Para (8) of the particulars given under para 172 alleges a failure to "advise Mr Shore as to his prospects of proving that his primary and secondary claims were not statute barred" and para 10 and 11 that there was a failure to instruct counsel to advise whether the claims were barred and/or explain counsel's advice "to enable Mr Shore to better understand and reflect" on the advice. Para 176 pleads that after issue Mr Shore "was not advised adequately or at all to resolve his claim against SFS by agreement or otherwise at minimum cost", relying on the same particulars and so in my view sufficiently raising an issue as to a continuing obligation to assess the prospects of success insofar as the outcome was not a certainty one way or the other, and relate that to the opportunities for settlement or discontinuance.
70. No case was pleaded that Irwin Mitchell in fact thought the claim was hopeless but failed to advise Mr Shore accordingly. The alternatives advanced therefore are in essence:

i) The claim was objectively hopeless on the limitation issue (ie that it had no realistic prospect of success) but Irwin Mitchell failed to recognise this and advise Mr Shore of it, or

ii) Although not hopeless, the prospects of success were so poor that it was negligent of Irwin Mitchell not to advise Mr Shore against issuing, or not to advise him to settle or discontinue on the best available terms at some point thereafter, or

iii) If the advice as to risks had been adequately explained by counsel and/or Irwin Mitchell, Mr Shore would have decided against issuing (or, perhaps, having issued, would have settled or withdrawn).

71. I should say at the outset that I reject the suggestion advanced in Mr Shore's witness statement (reflected in para 174 of the Particulars of Claim, above) to the effect that he was not told of any significant risk on the limitation issue and would never have pursued the claim if advised it was subject to any significant risk ("I now understand Mr Elkington concluded that there was 'a very real risk' that my claim against SFS would fail as a result of it being time barred…this extent of this risk was not explained to me at the time or at any other time…If there was any more than a minimal risk that the claim would be defeated as a result of limitation I would not have proceeded with the claim.": witness statement para 49, C/10). Mr Khangure did not press that point and it is plainly inconsistent with the degree of explanation given and the extent of Mr Shore's participation in discussion of the risks on limitation. Assuming Mr Shore believed that when he made his statement he can only have come to do so after a great deal of post- event rationalisation of the facts.
72. Was the case on limitation in fact hopeless? I am not persuaded that it was. I have said above that in my view the Sephton point on primary limitation cannot be said to have been hopeless, given that Beatson J accepted it. It is true however that this did not feature in the case until some time after issue and so did not affect the advice on which the decision to issue was made. In relation to the primary claim the principal position put forward was that Mr Shore did not know he had the option to take deferred benefits in the Avesta scheme until so advised by Mr Erskine in 2004. He knew that he had left the Avesta scheme, and that this was in consequence of SFS's advice, but not that he had given up an option to take deferred benefit. He had complained about the effect of the transfer, but only about the impact of the GAD restriction, not about the principle of leaving the Avesta scheme. Beatson J accepted Mr Shore's evidence on this point (judgment, para 42) but found it irrelevant to limitation since he had held that there was no duty to advise as to the option to remain and take the deferred benefit (ibid, para 219). It was in my view at least arguable that Mr Shore could not be said to know he had suffered loss by losing the option to take deferred benefits if he did not know that he had the option in the first place. It was not said before me that the "duty" point was hopeless, and it follows that the s14A limitation point on the primary claim was not itself hopeless.
73. I accept also Mr Flenley's submission that the s14A issue on the secondary claim was not hopeless. Mr Shore plainly knew well before October 2002 (and so more than 3 years before issue) that his ability to draw income was restricted by the GAD rate and that this restriction was, or was very likely to become, significant. He also knew that annuity rates had fallen so he had lost the opportunity to acquire an annuity at the former rates, which might or might not recur depending on whether rates recovered. He had complained about this restriction to SFS, and on his evidence had been persuaded not to make a complaint and reassured that his fund value was doing well and that the restriction on income would be corrected over time. He knew that he had suffered some loss in the sense of a restriction on his income, but was it such as "would lead a reasonable person… to consider it sufficiently serious to justify instituting proceedings…" (s14A(7))? Potentially, the restriction was temporary and reversible. I agree with Mr Flenley that it is at least arguable that the reassurances given are relevant to that consideration and might have led a court to conclude that the loss was not "sufficiently serious". As I said above it would be profoundly unattractive for a defendant who had talked a claimant into waiting to see if his position was corrected thereafter to rely on limitation to bar his claim. Mr Flenley drew support from Wilson v Le Fevre Wood & Royle [1996] PNLR 107 (accepting that neither Irwin Mitchell not Mr Elkington had had the case in mind) in which Hutchison LJ said that such an argument would be "by no means easy to resolve".
74. Mr Khangure referred to 3M UK Plc v Linklaters & Paines [2006] EWCA Civ 530, in which the defendant solicitors had negligently failed to notice that the internal transfer of a leasehold property within a group of companies meant that the transferee could not take the benefit of a break clause. The potential problem was spotted but no action taken, on the basis that it might never become an issue. Some years later the tenant sought to exercise the break, and the point against it was taken by the landlord. The Court of Appeal held that time ran from the date of knowledge of the mistake, even though it was reasonable to wait and see if it became a real problem. But this was not a case of holding back from action following a representation or persuasion by the tortfeasor, and at least arguably therefore distinguishable.
75. If I am wrong on that and the s 14A limitation case was in fact always hopeless, the next question would be whether Irwin Mitchell were negligent in not so concluding and advising Mr Shore. It is highly relevant on this point (as on the question I shall come to of evaluation and advice on the degree of risk in the limitation issue) that Irwin Mitchell instructed counsel who advised on the limitation issue throughout. It is common ground that a solicitor who reasonably relies on counsel's advice in giving his own is not negligent if the counsel instructed are competent and experienced in the field and properly instructed. The solicitor is not entitled to abdicate responsibility to counsel and must exercise his own judgment bearing in mind his own knowledge and experience, but in a specialist area is entitled to follow the views of counsel unless they are "obviously and glaringly wrong"; see Jackson & Powell on Professional Liability at para 11-122 ff.
76. In the present case it is beyond dispute that both counsel instructed, Mr Elkington and Mr Soole QC, were highly experienced and competent in the field and there is no criticism of their instructions. They advised Mr Shore directly, and insofar as Irwin Mitchell gave their own advice at any stage it is clear in my judgment that they did so in reliance on and informed by the advice of counsel. Neither counsel thought, at any stage, that the claim was bound to fail on limitation grounds, although both expressed the view, in various terms, throughout their respective involvements, that limitation was a substantial risk. Although it was pleaded in the Reply that Mr Elkington's advice before issue was obviously wrong and that he had overlooked the fact that Mr Shore had complained to SFS in May 2000, it is plain that Mr Elkington did not overlook that complaint (rather he took the view that the s14A case was arguable notwithstanding it) and it was not even put to him in cross examination that his advice was obviously wrong. When Mr Soole was instructed he did not consider that the claim had always been hopeless; rather his opinion was that despite the difficulties it had reasonable prospects of success. There is in my judgment no foundation for any suggestion that Mr Elkington had overlooked any of the material factors with the result that Irwin Mitchell ought to have disregarded or asked him to revisit his advice, nor was there anything to suggest that the view taken was wrong, let alone obviously wrong, such that Irwin Mitchell ought to have come to their own conclusion that the claim was hopeless from the start.
77. If the claim was not always hopeless, in the sense that it had no realistic prospects of success at all, was it negligent of Irwin Mitchell not to advise that the risks were so high that Mr Shore should not contemplate running them, or did Irwin Mitchell's advice as to the degree of risk negligently understate the risk with the result that Mr Shore either issued the claim when he would not have done or failed to take an opportunity to settle when he might have, if properly advised? This runs together the second and third issues that I described above, which are in reality closely related. If a claim is not absolutely hopeless, there can be a spectrum of degrees of risk associated with bringing it. At one extreme, its chances of success may be so slight that the only proper advice to any sensible litigant would be that it is not worth bringing it. Short of this, and provided the client is capable of understanding and making his own assessment of his interests, it will be proper to explain the risks and take the client's instructions as to whether he is prepared to accept them. In this connection, Irwin Mitchell not only relayed and relied upon the advice of counsel but, it was said, put their own gloss on that advice which had the effect that Mr Shore was persuaded that the risks were less than they truly were.
78. Once it is accepted that the limitation position was not black and white the assessment of the likelihood that the court could be persuaded to find in favour of Mr Shore, and correspondingly the risk that it would not do so, was a matter of legal judgment. In part the outcome would depend on whether Mr Shore's evidence of fact was accepted, but it has not been suggested that he should have been advised that it would not be, or that he was not properly advised of the risk of the court not accepting his evidence (and in the event in some crucial respects his evidence was rejected). For the purposes of this action therefore the assessment focuses on the risk of failure in the legal arguments on the assumption that the facts would be found as Mr Shore alleged.
79. In large part the advice given to Mr Shore on limitation was given directly by counsel, or consisted of Irwin Mitchell relaying the advice of counsel. Although the precise words used varied from occasion to occasion, there was in my view no material change from the view expressed by Mr Elkington in his first note, ie that there were "very real risks" that the court would find that Mr Shore had the relevant knowledge more than 3 years before issue. No doubt this was an assessment based partly on the factual case and partly on the legal issues. Nevertheless, both Mr Elkington, and Mr Soole when he became involved, considered that the case had reasonable prospects of success. There were significant grounds for that opinion.
80. Mr Khangure rightly stressed the breadth of language of the authorities in describing the extent of relevant knowledge of facts and the possibility of a claim required to start time running. In Spencer-Ward v Humberts [1995] 1 EGLR Bingham LJ said:

"It is, I think, necessary that issues on this section should be approached in a broad common-sense way, bearing in mind the object of the section and the injustice that it was intended to mitigate. There is a danger of being too clever and it would usually be possible to find some fact of which a plaintiff did not become sure until later. It would be a pity if a desire to be indulgent to plaintiffs led the court to be unfair to defendants."

He pointed also to the complaints expressed by Mr Shore to SFS in 1999 and 2000 as indicating that he knew he had suffered a detriment for which he regarded SFS as responsible. But it is apparent from Bingham LJ's words, and the plethora of cases in which decisions have been taken on s14A, not wholly reconcilable with each other, that the courts are taking value judgments in which the perception of the balance of injustice to claimant and defendant plays a part in assessing on the facts of a particular case whether the knowledge acquired is sufficient or not.

81. Despite the number of authorities, Mr Flenley tellingly observes that the result in a particular case may be very much a matter on which different judges may reach different conclusions. In Haward v Fawcetts, the most recent authority reviewing the cases on s 14A before the issue of Mr Shore's case, a unanimous decision of the Court of Appeal ([2004] EWCA Civ 240) was reversed by the House of Lords ([2006] UKHL 9) also unanimously, although none of the authorities relied on by the Court of Appeal were themselves held to have been incorrectly decided.
82. Mr Owens in his evidence accepted that there were significant unfavourable factors in the case, but said that in his experience the tests applied were "something of a malleable concept", the outcome being potentially affected by the perception of the judge as to the merits of the case. Both he and Mr Elkington expressed the view (it would be hard to disagree) that Mr Shore had been given "rubbish advice". The facts gave rise to a strong inference that the advice given may have been motivated by the financial interests of the adviser and not the client. The result had been financially disastrous for Mr Shore. It was reasonable to think that a judge who accepted Mr Shore's evidence might be sympathetic to him on the merits and potentially disposed to lay more weight on matters in his favour on the s14A issues accordingly. This is no doubt what Mr Owens was describing, in terms appropriate to advice to a lay client, when he said that if the judge was 'convinced of ' Mr Shore he would 'find a way through' the limitation issue.
83. Mr Soole came in to the case shortly before trial. His evidence was that he knew from the start, as did everyone at the conferences with him, that there was a major issue as to limitation. He regarded the primary case as the stronger, and that in relation to that he described the Sephton point as in his view a powerful one that had succeeded before the judge. He had based his presentation of it to the judge not only on Sephton but the earlier case of Nykredit Mortgage Bank Plc v Edward Erdman Group Ltd [1997] 1 WLR 1627. The conference notes from 21/22 June record him referring to "two recent cases" and that his "instinct is can get over" the limitation problems. In his witness statement he said that the two cases would have been Sephton and Haward, that he had attached importance in the latter case to Lord Nicholls' discussion of the difficult distinction between knowledge of facts and of their legal consequences, and (at para 27):

" As to the words "instinct is can get over", I think it very likely indeed that I would have used the word "instinct". I say this for two related reasons. First, because it is a word that I often use when I am expressing a non-analytical "gut feeling" as to how I consider a judge may respond to a legal point which is fact-dependent. Secondly because, in my view, then and now, the date of knowledge provisions of section 14A do provide considerable scope for a judge to find in favour of the claimant whose evidence he essentially accepts. "

84. To the suggestion that by this stage the case was committed to trial, Mr Soole said that if it had been his view that the case was hopeless, he would have said so nonetheless. His view however was not that it was hopeless, indeed "far from it". His witness statement dealt with the approach made by leading counsel for SFS in which the phrase "dead in the water on limitation" had been used, in relation to which he said "I certainly did not agree with his dismissive comments on limitation. On the contrary I considered that there were reasonably good arguments for defeating the limitation defence." As to SFS's drop hands offer, he said that he could not recall whether he had suggested a counter offer but "I certainly felt no good reason to recommend the offer and did not do so… I would not have hesitated to do so if I thought that Mr Shore ought to accept. I am by nature a relatively cautious litigator; and particularly so when my client is an individual litigant with so much to lose."
85. It is said that Irwin Mitchell effectively watered down the advice of counsel as to the risks involved in the litigation, first by telling him that the written advice of 27 June 2005 was 'more positive than it appeared'. I do not accept that that remark either shows any negligence, or had any effect on Mr Shore's decision to proceed to issue. It was no doubt an interpretation of counsel's advice, but in my judgment a reasonable interpretation by way of explanation and amplification for the lay client who might have thought that in pointing out an area of risk, counsel was advising that the claim would inevitably fail. That was not counsel's view, as he made clear. In any event, it was followed by the telephone conference with Mr Elkington on 29 June in which limitation risk was fully discussed, Mr Shore was clearly warned by counsel that there could be no promise a court would be in his favour but counsel said in response to Mr Shore's question that he was "still positive". Realistically, it must have been that advice, rather than any prior comment by Mr Owens, that Mr Shore would have relied on in giving his instructions to issue.
86. One of the offers it is said should have been accepted was made at the mediation, which was not attended by counsel. Mr Khangure submitted that Mr Shore had been misled by the litigation assessment showing that his prospects of success against one or other defendant were rated at 85%. Mr Flenley rightly says that there is no pleaded case that Mr Shore relied specifically on this in rejecting the offer, nor does Mr Shore say that in his evidence. In the circumstances it is not open to the claimant to base a case solely on that assessment. The same applies to the assertion that Mr Shore was misled by the assessment of the settlement value of his claim at £231,000. Even if the figures given in that assessment could be criticised, the position in relation to the offer at mediation is in my judgment the same as above, and there is no basis for any finding that Irwin Mitchell ought to have assessed the prospects as so weak that they should have advised acceptance of a costs inclusive figure of £15,000.
87. There are other points in the history at which criticism is made of isolated remarks made by Mr Owens or Ms Griffin in relation to limitation, but none of these, it seems to me, have any significance on their own. Again, there is no pleaded case that Mr Shore relied on any such remarks in taking, or not taking, any relevant decision. Furthermore, at all material stages (other than at the mediation itself) Mr Shore had advice from counsel by way of explanation and elaboration of the risks he was considering. This advice was put in various ways, but all in my judgment quite sufficient to set out to Mr Shore that the risk was considerable and that although counsel considered there were reasonable arguments that may well be accepted, there could be no guarantee that the court would agree. Mr Owens and Ms Griffin said the same in terms to Mr Shore at different points. They were in my judgment careful to make sure that Mr Shore at all points appreciated that there were serious risks in his case and that counsel was not saying either that they were bound to be overcome or that the case was bound to fail.
88. Mr Shore has not made any case, and in my view it would not be realistic to do so, that he was dissuaded from taking a decision that he would have taken based on counsel's advice either by something said by Irwin Mitchell at a conference with counsel or after it had concluded which in either case caused him to disregard or misunderstand what counsel had said. Nor could it be said that, at the points at which settlement was open to Mr Shore, it was negligent of Irwin Mitchell not to advise him to do so by reason of the risks counsel had advised upon. That was not counsel's view, and for the reasons given above it was at the very least not obviously and glaringly wrong. It cannot therefore be said either that Mr Shore would have taken any different course if Irwin Mitchell had said nothing at all in relation to the limitation issues (so that Mr Shore had in his mind only what was said by counsel) or that Irwin Mitchell were negligent not to advise him that counsel's view was wrong.
89. I have said above that I do not accept Mr Shore's evidence that he would have abandoned the claim if told of any significant risk in it. On the contrary in my judgment the contemporary documents show that although his mood fluctuated, particularly when the proceedings had been on foot for some time and the strain was beginning to tell on him and his wife, overall he was a determined litigant, convinced that he had been wronged and that the merits of the case were with him and would be accepted by the court. He knew what his financial exposure was, knew there were risks in his case, explored them in conferences with counsel and outside, and took his own decisions at all stages based on his own assessment of the balance of risk and reward. I do not believe these decisions were marginal, in the sense that any slight variation in the way the risks were explained to him would have caused a change in his decision at any critical point such as whether to accept an offer made. On the contrary, the offers were very low, either to drop hands or pay a minimal amount inclusive of costs which would have left Mr Shore greatly out of pocket, and I am satisfied from the documents that there was no real likelihood that he would have accepted such an offer unless advised he had no real prospect of success. For the reasons given above, Irwin Mitchell were not negligent in not advising him in those terms.
90. There was also criticism of the alleged failure to advise on funding arrangements, by way of ATE insurance, until a late stage in the claim. But this can have had no effect on Mr Shore's decisions; he was aware from the beginning that he was liable for his own costs and exposed to adverse costs risk, and when the question of ATE was briefly looked at the advice was that it would be difficult to persuade an underwriter to accept a case turning on a conflict of evidence. That was borne out by the enquiries made, and there is no evidence the position would have been different at any other stage.
91. It follows that in my judgment Irwin Mitchell were not negligent in any of the ways pleaded. The claim must fail, and I do not need to address matters of quantum.