Developing jurisprudence

Equitable Life Assurance Society v Ernst & Young (a firm) (CA TLR 10 September)

It is not appropriate to strike out a claim in an area of developing jurisprudence, since decisions as to novel points of law should be based on actual findings of fact. A court should be cautious, particularly in a complex case, about claiming to foresee, especially at the outset of proceedings, a clear path to the summary dismissal of a case on the ground that, even though the issue of liability needed to go to trial, all issues of quantum ought to go against the claimant. This was particularly so when one considers that there are other mechanisms available, such as the ordering of preliminary issues, for judging whether a case, or part of a case, should fail so far as matters of quantum were concerned. There were cases whose structure might make it sensible to reverse the normal order of things and to take an issue or issues of quantum first. That might either be because the argument on quantum was relatively brief and, if decided against the claimant, determinative of the case, or it might be because such an issue or issues would determine whether the case was worth a great deal or comparatively little, and that might assist the parties to know whether it required litigation at all, or could be mediated or settled. Accordingly, it was not appropriate to strike out a claim by an insurance company against its auditors for the loss of chance of sale of its business suffered by the negligence of the auditors in the preparation of the company’s statutory accounts. It was not as though a cause of action for negligence arising in contract was unknown, or even unclear; and for the present purposes, the defendant’s negligence was assumed. The debate was rather about the concepts used to limit the scope of legal consequences of negligence or legal responsibility for negligence, where the law was at present in a state of development and flux, and sensitive to the facts.