Posted: 23rd December 2012
In circumstances where a professional negligence claim was erroneously instituted against a limited liability partnership (LLP) in respect of alleged torts committed prior to its formation, the High Court has stepped in to correct the error and allow the case to proceed to trial.
The original defendants in the action had, like very many other professional firms in recent times, transformed itself from a traditional accountancy partnership (the firm) into an LLP which had its own legal personality and the partners of which did not carry the burden of personal liability.
The claimant had issued proceedings against the LLP, only subsequently realising that the majority of its claims related to a period before it came into existence and that the correct defendant would therefore have been the firm. By the time that the mistake was uncovered, the six-year limitation period that applies to professional negligence claims had expired.
A Master of the Queen’s Bench Division had refused the claimant’s application to substitute the firm as defendant in the action and, as it was acknowledged that no viable claim could be made against the LLP, the proceedings were struck out.
Allowing the claimant’s appeal against that decision, Mr Justice Leggatt said that the court had jurisdiction to make the substitution because the wrong defendant had been sued due to a mistake within the meaning of Civil Procedure Rules rule 19.5(3)(a) and section 35(6)(a) of the Limitation Act 1980. There were no factors that could reasonably justify the court in refusing to exercise its discretion to make a substitution which was necessary to enable a viable claim to proceed to trial and which caused no prejudice to the new party, the firm.