England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MANCHESTER DISTRICT REGISTRY

		Manchester Civil Justice Centre 1 Bridge Street West Manchester
		14/12/2015

Mr Justice Norris:

1. The question at issue on this application is whether the two principal defendants, Zurich Assurance Limited and Zurich Advice Network Limited ("Zurich"), have demonstrated that it is fanciful for the Claimant, Angela Lenderink-Woods ("Mrs Lenderink-Woods"), to assert that she lacked the relevant knowledge to bring her present claim until after 10 December 2011.
2. Mrs Lenderink-Woods is now aged 95. In 1944 she married Jan Lenderink, who was domiciled in the Netherlands. At no time since 1948 has Mrs Lenderink-Woods been resident in any part of the United Kingdom: since 1980 she has been resident in Costa Rica. These facts are not contested.
3. From 1996 onwards Mrs Lenderink-Woods maintained an inherited portfolio of investments in the United Kingdom, consisting of gilt edged securities, shares, unit trusts and bonds ("the Portfolio"), together with some cash held in a deposit account at a UK Bank. It is common ground that on her death Inheritance Tax would be payable on the Portfolio under section 267 (1) of the Inheritance Tax Act 1984 simply because it consisted of assets situated in the United Kingdom (and irrespective of the domicile or residence of Mrs Lenderink-Woods). The Portfolio had a value of about £567,700.00, and the potential Inheritance Tax burden was about £130,300.00.
4. It is common ground that in 2001 Mrs Lenderink-Woods sought advice from Huw David Lester Davies ("Mr Davies") concerning her financial arrangements: and that her principal requirement in seeking his advice was to mitigate her exposure to inheritance tax on her UK based assets (including the Portfolio). Zurich accepts that in giving advice, Mr Davies owed Mrs Lenderink-Woods both a contractual and a general duty to exercise the degree of skill and care to be expected of a reasonably competent financial advisor; and that Zurich is now liable for any actionable shortcomings in the advice which he gave. As Mr Davies himself explained in a memorandum dated the 6 February 2011 which he sent to Mrs Lenderink-Woods and her daughters:-

"The major objective though of our first year's meetings was to reduce (mitigate) inheritance tax via trusts so that [Mrs Lenderink-Woods'] daughters' inheritance would not be heavily taxed".

5. It is common ground that Mr Davies advised Mrs Lenderink-Woods to convert the Portfolio into insurance bonds issued by Allied Dunbar within what was called "a Loan Trust Scheme". This involved a loan of the proceeds of Portfolio (or of the Portfolio itself) by Mrs Lenderink-Woods to trustees and the investment of the value of the Portfolio by those trustees in investment bonds with Allied Dunbar which were notionally insurance policies upon the life of Mrs Lenderink-Woods. The investment bonds themselves were then to be held upon discretionary trusts (in practice for the benefit of Mrs Lenderink-Woods' daughters). If the trustees withdrew 5% per annum of the value of the investment bonds they could over repay the loan which they had taken from Mrs Lenderink-Woods. On the death of Mrs Lenderink-Woods the outstanding balance of the loan (together with any repayments which she had not spent) would form part of her estate for Inheritance Tax purposes but the anticipated increase in the value of the insurance bonds would not be subject to Inheritance Tax. So the scheme did not relieve Mrs Lenderink-Woods of liability to Inheritance Tax on the value of the Portfolio: but only on any increase in value over the initial premium.
6. It is common ground that after that advice was given Mrs Lenderink-Woods transferred the Portfolio or the proceeds of the Portfolio to Allied Dunbar, that in early May 2001 she executed two Declarations of Trust, that she loaned the value of the Portfolio (together with the cash in her deposit account) to the trustees of those Declarations of Trust, and that the trustees thereafter used the proceeds of the Portfolio to purchase an International Personal Portfolio Bond and the proceeds of the deposit account to purchase a International Investment Bond ("the Bonds"). There was an issue about the extent to which Mrs Lenderink-Woods relied on the advice of Mr Davies in implementing the Loan Trust Scheme in this way.
7. In a Claim Form issued on the 10 December 2014 (to which Particulars of Claim were annexed) Mrs Lenderink-Woods alleges that the advice of Mr Davies was negligent and that he made careless misstatements about the costs which she would incur in implementing the Loan Trust Scheme.
8. The heart of the case in negligence is that no reasonably competent adviser instructed as Mr Davies was instructed could have advised as he did advise, because a reasonably competent financial adviser would have seen that Mrs Lenderink-Woods' domicile was a relevant factor to take into account in the shaping of what advice should be given to her in relation to her UK based assets. In this connection Zurich admits that Mr Davies was actually aware that, whilst Mrs Lenderink-Woods had been born in the United Kingdom, in 2001 she was living in Costa Rica and had been living there for very many years.
9. The particular allegations of negligence or careless misstatement are as follows:-

a) The reasonably competent financial adviser would have appreciated that all liability to Inheritance Tax (rather than simply Inheritance Tax on any increase in value) could have been removed by investing the Portfolio and the cash deposit in exempt gilts or off-shore unit trusts:

b) A reasonably competent financial adviser would not have advised the Loan Trust Scheme because of its inflexibility (in particular in relation to the limits upon the amounts that could be withdrawn each year):

c) A reasonably competent financial adviser would have warned that the Bonds carried high charges when compared with direct investments:

d) A reasonably competent financial adviser would not have stated (as it is alleged Mr Davies did state) that the costs of the Loan Trust Scheme were "just 2%", but would have drawn attention to the initial charges incurred when the Bonds were taken out, to the fact that the charges for the first year were about 4.5% or more, and that there were ongoing annual charges of at least 2.3% on the value of the Bonds (not simply on the growth).

10. For completeness (thought it is not necessary to detail the matter for the purposes of adjudicating on this application) Mrs Lenderink-Woods claims that she has suffered loss by reference to the difference between the actual value of the Bonds at the date of assessment and the total return from an offshore portfolio of equity and fixed interest funds (assessed by reference to a representative cross section of such funds) ("the reconstruction basis"): or alternatively repayment of the charges and compensation for loss of income and loss of capital growth on unnecessary charges ("the reimbursement basis").
11. In paragraph 47 of its Defence Zurich pleads limitation. In her Reply Mrs Lenderink-Woods pleads:-

"37(a) Insofar as necessary the Claimant will rely on section 14A of the Limitation Act 1980

(b) Any complaints, if any, by the Claimant made to the Second Defendant's appointed agent in 2009, or subsequently, were in relation to investment performance of the Bonds, not in relation to the decision to embark upon the Loan Trust Scheme

(c) The Claimant first had knowledge that the advice to enter into the Loan Trust Scheme was the cause of the losses where Mr Joe Willows… sent an email to the Claimant… on 20 February 2012 following a conversation on 16 February 2012…

(d) The Claimant continued to seek, receive and rely upon advice from Huw Davies up to and beyond 10 December 2011".

12. By application dated 18 June 2015 Zurich seeks an order that the claim be struck out pursuant to CPR 3.4 or alternatively that there be summary judgment for Zurich under CPR Part 24 "because the Claimant's claim is time barred and has no real prospect of success". Wisely the application was argued as one for summary judgment (the claim for striking out not being pursued). The prime focus of the argument was the limitation point: but there was a subsidiary argument that Mrs Lenderink-Woods had no real prospect of overcoming the Bolam test.
13. It may be taken as read that I have well in mind the principles upon which the jurisdiction conferred by CPR Part 24 is to be exercised (and in particular the summary of the applicable principles made by Lewison J in EasyAir Limited v Opal Telecom Limited [2009] EWHC 339 (Ch)). It is unnecessary to lengthen this judgment by setting the principles out. It is for Zurich to persuade me that it is entitled to the relief which it seeks on this application. At trial the burden would lie on Mrs Lenderink-Woods to establish on the balance of probabilities that she first had relevant knowledge (for the purposes of bringing her action) after 10 December 2011: but in resisting a summary judgment application she has only to put before the court sufficient material to show that there is a real prospect of her doing so at trial, so preventing Zurich from discharging the burden that lies upon it in pursuing its summary judgment application.
14. Mrs Lenderink-Woods' case is that she has commenced her proceedings within three years from "the starting date" identified in section 14A of the Limitation Act 1980. The "starting date" is "the earliest date on which [she] first had both the knowledge required for bringing an action for damages in respect of the relevant damage and a right to bring such an action". By virtue of section 14A(6),(7) and (8) the requisite knowledge is:-

a) Knowledge of the material facts about the damage in respect of which damages are claimed (being such facts as would lead a reasonable person who had suffered such damage to consider it sufficiently serious to justify instituting proceedings for damages against someone who did not dispute liability and could satisfy judgment);

b) Knowledge that the damage was attributable in whole or in part to the acts or omissions of which Mrs Lenderink-Woods now complains as being negligent:

c) In each case "knowledge" in the sense of knowledge she actually had or knowledge which she might have reasonably been expected to acquire from facts observable or ascertainable by her (or ascertainable with the help of appropriate expert advice which it was reasonable to seek).

15. The words of the statute which I have summarised above (but which I will seek to apply according to their enacted terms) are illuminated by authority in the following respects:-

a) For the purposes of section 14A(5) and (6)(a) "knowledge" of the material facts means knowing facts with sufficient confidence to justify embarking upon the preliminaries to the issue of a writ: Haward v Fawcetts [2006] UKHL 9 at [9].

b) For the purposes of section 14A(6)(b) and (8)(a) establishing "knowledge" that the damage was "attributable" to the acts of which complaint is made requires one to look at the way Mrs Lenderink-Woods puts her case, to distil what she is complaining about and then to ask (i) whether in broad terms she had knowledge in the relevant period of the facts on which her present complaint is based: and (ii) whether she knew that there was a real possibility that the matters of complaint were causally relevant to the damage of which she now complains: see Hawards v Fawcetts at paragraphs [10] and [11] and Hallam-Eames v Merrett Syndicates [2001] Lloyd Rep PN 178 at 181 column 1.

c) For time to start running on a claim for defective advice there has to be something which would reasonably cause the recipient to start asking questions about the advice received: Haward v Fawcetts at paragraph [21].

d) Where one is looking not at actual knowledge but at constructive knowledge the Court must have regard to the characteristics of the person in the position of Mrs Lenderink-Woods (but not to any characteristics that are peculiar to her): Gravgaard v Alderidge & Brownlee [2004] EWCA Civ 1529 at [20]-[22].

Although nearly a dozen other cases were cited both at first instance and in the Court of Appeal, these were either applications of the words of the statute to particular facts or illustrations of the principles which I have identified in the authorities. I shall therefore not refer to them further.

16. In paragraph 48 of the Zurich Defence notice is given that if Mrs Lenderink-Woods relied on section 14A of the 1980 Act then Zurich would say that she "had the requisite knowledge within section 14A prior to 10 December 2011". In its skeleton argument in support of this application it was made clear that Zurich did not say that Mrs Lenderink-Woods had actual knowledge: rather that it is beyond realistic argument that she "had the requisite constructive knowledge for the purposes of section 14A prior to 10 December 2011" i.e. that she might reasonably have been expected to acquire knowledge of the matters and to the degree which I have outlined above from facts observable or ascertainable by her (if necessary with the help of the appropriate expert advice which she ought reasonably to have sought), and that it is fanciful to suggest otherwise. In the oral argument there were times when the case was presented as one asserting actual knowledge on the part of Mrs Lenderink-Woods: but in this case this did not in fact alter the issues to be addressed.
17. The distillation of Mrs Lenderink-Woods' complaint is that to someone who understood that the Inheritance Tax burden borne by the Portfolio derived solely from its location in the UK (and did not derive at all from the personal status of Mrs Lenderink-Woods) there was a far more effective, simpler, cheaper and more flexible alternative than the Loan Trust Scheme and the purchase of the Bonds. Her claim will be statute barred if someone with the characteristics of a person in her position (in 2001 an 80 year old widow who had lived in Costa Rica for many years and who wanted to leave the Portfolio to her daughters, but herself had no business acumen) might reasonably have been expected to acquire (prior to December 2011):-

a) Knowledge of the material facts about the damage in respect of which damages are claimed (i.e. that there was a better alternative):

b) Knowledge that Mr Davies could have considered alternatives to the Loan Trust Scheme but had not made enquiries or recommended things that other competent financial advisors would have considered or recommended:

c) Knowledge that what Mr Davies had or had not done was causally relevant to the predicament in which she found herself, locked into the Loan Trust Scheme and Bonds with her capital eroding:

d) Knowledge of those matters with such a degree of confidence as would justify embarking upon the preliminaries to the issue of a writ.

In conducting this examination the Court is not concerned with the question whether Mrs Lenderink-Woods might reasonably have been expected to know that what Mr Davies did or did not do involved "negligence" as a matter of law: that is not a relevant consideration.

18. It is therefore necessary to examine the material on which the Zurich Defendants rely as demonstrating Mrs Lenderink-Woods' constructive "knowledge" and the absence of any real prospect of her being able to establish otherwise at trial. In undertaking this analysis it was accepted for the purposes of this application that what was known by Mrs Lenderink-Woods' daughters Birgit and Annabelle was to be treated as known by the Claimant herself.
19. On 8 January 2011 Birgit emailed Mr Davies to express concern about securing enough income for Mrs Lenderink-Woods whilst avoiding capital erosion. Shortly thereafter she queried the correctness of total withdrawals by Mrs Lenderink-Woods of £176,600.00 since the commencement of the Loan Trust Scheme. A few days later saying:-

"I still seek to understand the mechanism of premiums being paid out and withdrawals coming directly out of capital. This confuses me. I can understand a Portfolio loosing (sic) due to various changes in the stock market. I cannot understand taking money directly out of capital except in extreme emergency situations… I would like to know how we have gotten to this place since, for the moment at least, I am having to manage the money over here".

To this her sister Annabelle added:-

"I must say I am more confused and I was hoping it would be possible for you to give us an overview of this account and when and from (principal or income) of the account the withdrawals came. Birgit is very concerned as it appears that it seems to have come from the principal. I too find that disturbing".

20. These enquiries do demonstrate a degree of concern as to how the Loan Trust Scheme is funding the needs of Mrs Lenderink-Woods and a complete reliance upon Mr Davies to explain in simple terms what is going on. They are questions about the operation of the scheme, not about the suitability of the scheme or the possibilities of more effective tax mitigation alternatives.
21. Mrs Lenderink-Woods' four daughters were divided amongst themselves. Whilst Birgit and Annabelle were unhappy with the working arrangements, Mandy was not. With the help of Mr Davies, Mandy prepared some notes. One of the notes (which internal evidence suggests was approved by Mr Davies) explained that:-

"All [monies] …..in [Costa Rica] come under UK inheritance tax rules even though she is an expat; bank balance, savings, cash… the only thing that will not come under UK inheritance tax law is her property in CR which she has made over to us to make probate simpler…".

Inherent in that analysis is the assumption (approved by Mr Davies) that although resident in Costa Rica Mrs Lenderick-Woods was domiciled in the United Kingdom. In fact an examination of the position (by a financial adviser if it fell within the skills of a reasonably competent adviser, or by an appropriately qualified solicitor on the recommendation of a financial adviser if it did not) would have shown that in 2011 (as in 2001) Mrs Lenderink-Woods had acquired a domicile of dependency in the Netherlands when she married her husband in 1945, which domicile she retained notwithstanding the passing of the Domicile and Matrimonial Proceedings Act 1973 (unless she had subsequently acquired a domicile of choice in Costa Rica).

22. The e-mail exchanges between Birgit and Annabelle and between each of them and Mr Davies disclose a level of disquiet about the fees that Mr Davies was charging (but no consciousness of the level of charges on capital and income involved in the holding of the Bonds and the withdrawals made). These enquiries do not suggest any awareness of any alternatives to the original Loan Trust Scheme and the holding of the Bonds: they are directed at how the existing scheme was in fact operating and whether it could then be improved (perhaps by a change of linked funds).
23. On 6 February 2011 Mr Davies wrote to Mrs Lenderink-Woods and to Birgit and Annabelle "to… explain what [Mrs Lenderink-Woods] and I did… to enhance [her] life and eventual maximisation of passing on [her] estate to you…", explaining that Mrs Lenderink-Woods was his client "and so I advise on what she wants on a continuous basis". He explained that the major objective of the early meetings was to reduce Inheritance Tax via trusts so that Mrs Lenderink-Woods' daughters' inheritance would not be heavily taxed. He explained that he took into account that any encashment of the Portfolio "would then have gone through the process of gains tax": the assumption inherent in that is that Mrs Lenderink-Woods was domiciled in the United Kingdom. Having explained how the 5% withdrawal element worked he concluded by saying that if the addressees felt unhappy with his care he would send details of where to complain. This generated a list of questions from Birgit and Annabelle. These focussed on how the 5% withdrawal mechanism worked and how it related to gifts that Mrs Lenderink-Woods had made. Clearly Birgit and Annabelle found it hard to understand why the value of the Bonds appeared to have diminished so greatly. In the course of his answers Mr Davies said:-

"You can hand over [Mrs Lenderink-Woods'] investments… to solicitors for the UK and solicitors in CR. If you feel my advice is no longer required then all I would say is, do you want the expense of seeing solicitors, passing on the requirements etc etc? Where will the money come from to pay them; the solicitors?"

24. By 28 November 2011 Annabelle had contacted Pat Beresh of PMB Advisors (an American stockbroker) who "was able to help [her] understand" some of the issues. As a result of that she asked Mr Davies, who was still acting as financial adviser, and in the context of considering changing the Bonds:-

"Does she fall under UK or CR estate tax laws, or both? What are the alternatives to Life Assurance Bonds to increase income?... when we tried to do the math on the inheritance tax advantage gained by her arrangement it seemed to us that there wasn't really going to be any, given her current circumstances, is this right?"

25. It was the absence of an adequate response to that inquiry that led to the instruction, on behalf of Mrs Lenderink-Woods, of Mr Willows of Integer Financial Management Limited on 8 February 2012. In her letter of instruction Birgit said:-

"I have become somewhat uncomfortable with this arrangement and my mother and I agree that it is time to take a long hard look at where she stands financially and what, if anything, would be the best thing to do. It is time for a fresh, unbiased assessment from a sector other than the one that is currently benefiting from their arrangement with her. Since 2009 I have been trying to get information about the fees that she is being charged and it was like pulling teeth. I finally know somewhat now and it has shocked my mother".

26. This instruction led to a review of Mrs Lenderink-Woods' financial affairs and to immediate advice from Mr Willows that the Loan Trust Scheme was the type of arrangement usually sold to UK tax payers to mitigate UK Inheritance Tax, but that Mrs Lenderink-Woods was not in need of that since she was not UK domiciled. This led to the pursuit of a complaint by him on behalf of Mrs Lenderink-Woods, and to Zurich's initial acceptance of the validity of that complaint and the making of an offer (subsequently withdrawn) to pay £459,567.00 as compensation.
27. Counsel for the Zurich Defendants drew on this material to make three principal submissions. First, that all that was required was "broad knowledge" by Mrs Lenderink-Woods of the matters of complaint and for an appreciation "in general terms" that her problems were attributable to something that Mr Davies had or had not done: and that the chain of email correspondence demonstrated that she (or those concerned on her behalf) knew that something was up. Second, that Mrs Lenderink-Woods did not have to be certain that she had a claim against Mr Davies: all that was required was that she should know just enough for it to be reasonable to investigate further: and the chain of correspondence showed that she (and those concerned on her behalf) were investigating further in November 2011, and that their problem was that they did not start proceedings within 3 years. Third, it is clear that Mrs Lenderink-Woods (or those concerned on her behalf) took advice from PMB: and once she had determined that the third party should look at the arrangements then Mrs Lenderink-Woods is fixed with knowledge of what the competent investment advisor should have advised her (but did not).
28. In my judgment Mrs Lenderink-Woods has a real prospect of being able to answer each of these points at trial.
29. First whilst "broad knowledge" may suffice it is necessary to distil what Mrs Lenderink-Woods' complaint is and then ask whether she had broad knowledge of the facts on which that complaint is based. It seems to me that the essence of her complaint is that the Loan Trust Scheme was suitable for those with a UK domicile, but for those who did not have a UK domicile there were better and simpler alternatives that ought to have been considered. It seems to me that she might argue that whilst she did not think that what was happening to her money was very satisfactory, she had no idea that there was from the outset a more satisfactory alternative. In short, she could argue that she did not know that she had suffered damage of the type she now claims.
30. Second, whilst it is true that Mrs Lenderink-Woods did not need to know for certain and beyond the possibility of contradiction the matters required to bring an action for damages, but only to know those matters with sufficient confidence to justify embarking on the preliminaries to the issue of the writ, Mrs Lenderink-Woods may well establish at trial that she did not pick up (and no one placed as she was placed would have picked up) the assumption about her domicile that underpinned Mr Davies' advice, so nobody would have began preliminary investigations into that matter.
31. Third, whilst it is true that Mrs Lenderink-Woods is to be fixed with knowledge which she might reasonably have been expected to acquire from facts ascertainable by her or with the help of appropriate expert advice, she is not to be treated as having received expert advice which she did not in fact receive. If she took reasonable steps to obtain and to act on the advice of an expert she is to be treated as knowing only what that expert in fact told her. As it is put in Jackson & Powell on Professional Liability 7^th edition paragraph 5-087:-

"… a Claimant who instructs an appropriate expert is not penalised for shortcomings in that expert's work. If the expert fails to discover or advise of something which he should have discovered or advised of, the Claimant is not fixed with constructive knowledge by reason of the expert's failing. It follows that if the Claimant continues to rely upon the Defendant for advice and the Defendant does not inform him that there is a problem, the Claimant will not be fixed with constructive knowledge".

32. What PMB told her is going to be shaped by the instructions she gave the expert: and those instructions are going to be shaped by the way the problem presented itself to Mrs Lenderink-Woods. She may have thought the Bonds to be poor-performing and entitling Mr Davies to charge high fees: but enquiries to address those problems would not necessarily lead to advice that she should not be in that sort of scheme at all. There seems to me to be a real prospect of Mrs Lenderink-Woods establishing at trial that PMB did not advise her about the relevance of domicile to UK Inheritance Tax planning, that the relevance of domicile to UK Inheritance Tax planning was not something that someone placed as Mrs Lenderink-Woods was placed would be expected to know, and that she did not actually know of it until Mr Willows gave his advice.
33. In short, none of the material to which reference was made on behalf of the Zurich Defendants persuades me that it is fanciful to suppose that Mrs Lenderink-Woods can establish at trial that she did not actually know and is not to be treated as if she knew the material facts that now found her complaint against Mr Davies: indeed there is a "real" prospect that she will.
34. This brings me to the second ground upon which summary judgment is sought: namely, that the Claimant's case requires nearly every other person who has considered its merits to be wrong. It is the case of the Zurich Defendants that the Loan Trust Scheme was within the range of appropriate solutions to Mrs Lenderink-Woods' Inheritance Tax problem in 2001, and she will inevitably fail to establish breach of duty at trial.
35. It must first be observed that I am being asked to dispose of Mrs Lenderink-Woods claim on that basis without the benefit of any expert evidence as to what a reasonably competent financial advisor instructed as Mr Davies was instructed would have done by way of advice or further enquiry or consideration. I must therefore bear in mind the possibility that an expert complying with his duties under CPR Part 35 might express the same view as Mr Willows of Integer and react in the same way as initially did Zurich's internal adjudicator.
36. Second, whilst at trial the burden of proof will lie upon Mrs Lenderink-Woods, it will be for Zurich to demonstrate by expert evidence that there are differing and well established professional schools of thought as to whether the domicile of the tax payer is a relevant factor to take into account in Inheritance Tax planning or as to whether a Loan Trust Scheme is suitable irrespective of questions of domicile. The Zurich Defendants say that there are two indications that such evidence will be available.
37. The first is a decision of the Adjudicator in the Financial Ombudsman Service dated 17 October 2013. The complaint made was that Mrs Lenderink-Woods had no need of a Loan Trust Scheme involving investment bonds because she was not at the time of the sale of the Bonds domiciled in the UK. The Adjudication was that there was insufficient evidence to demonstrate that her Inheritance Tax position had been adversely affected or that the business had been transacted incorrectly. The basis for that view was

a) that the Portfolio was originally liable to bear Inheritance Tax, the Portfolio is still liable to bear inheritance tax (though any increase in value is not) and so Mrs Lenderink-Woods' Inheritance Tax position had not been adversely affected; and

b) that although the use of the Loan Trust Scheme was not entirely necessary, it did not seem that Mrs Lenderink-Woods had suffered a financial loss by reason of the Portfolio having been placed in a gift and loan trust.

The Adjudication proceeds on the footing that the only alternative was to have placed the Portfolio into an offshore trust which would have involved a chargeable lifetime transfer and a periodic 10 year charge (together with an exit charge). Why an offshore trust is thought to be the only alternative is not clear. The Adjudication does not consider the option of investment in exempt gilts. The Adjudication does not address either the reconstruction claim or the reimbursement claim as advanced in the present proceedings.

38. Reliance is secondly placed on the determination of the Financial Service Ombudsman dated 24 January 2014. The Ombudsman accepted that Mr Davies was mistaken in recommending the use of the Loan Trust Scheme, but said that he had not seen evidence that this caused Mrs Lenderink-Woods any financial loss or other detriment. This is not promising material out of which to forge an argument that Mr Davies' recommendation of the Loan Trust Scheme was beyond any realistic challenge within a range of differing and well established professional schools of thought. The Adjudication does not consider the option of investment in exempt gilts. The Adjudication does not address either the reconstruction claim or the reimbursement claim as advanced in the present proceedings.
39. In my judgment it would be wholly wrong to dismiss Mrs Lenderink-Woods claim at this stage on the basis that she has no real prospect of establishing breach of duty at a trial. I do not accept the submission that it is going to be impossible for expert evidence to be garnered which undermines the Ombudsman's determinations.
40. I dismiss the application for summary judgment.
41. The question of costs and further directions will be addressed in written submissions (and after discussion between Counsel). If there is no agreed order I would like to receive the Claimant's submissions by noon on 11 January 2016 and those of the Zurich Defendants by noon on 15 January 2016.