Court Of Appeal Refuses Permission For New Defendant To Be Substituted After Expiry Of Limitation Period

The effect of the decision is that, because of the current state of the law, it is not possible to substitute a defendant sued by mistake unless the mistake is merely one of name rather than identity.

The Court of Appeal has held that the claimants in a professional negligence action could not amend their claims to add or substitute a defendant after the expiry of the limitation period. The new claims were not the same in substance as the original claims, meaning that the relevant gateway test was not met: Adcamp LLP v Office Properties PL Limited & Ors [2026] EWCA Civ 50.

The underlying claims arose from negligent advice alleged to have been given by a firm of solicitors. By the time the claims were brought, the firm had been acquired by another entity. The claimants issued claims against this entity in the mistaken belief that it had assumed responsibility for the original firm's liabilities. When they realised that this was not the case, they sought to substitute the new firm as a defendant. By this time, the limitation period had expired.

The rules on adding or substituting parties after the expiry of limitation are found in CPR 19.6, which carries into effect section 35 of the Limitation Act 1980. The court only has a discretion to grant an application if one of the conditions under s.35(5) is met:

• "the new party is substituted for a party whose name was given in a claim made in the original action in mistake for the new party's name" (the first gateway); or
• "any claim already made in the action cannot be maintained by or against an existing party unless the new party is joined or substituted" (the second gateway).

It was accepted that, under binding Court of Appeal authority, the first gateway only applied where the mistake was one of name rather than identity, and that was not the case here. The court held that the second gateway was also not met, because it required the original claim and the new claim to be the same in substance, and here substitution would involve a substantive change to the identity of the person against whom the claim was asserted.

The Court of Appeal accepted that its interpretation of the second gateway meant that it could not apply to the substitution of a defendant, where the wrong defendant had been sued by mistake. However, it considered that a broader interpretation was not justified and would create anomalies. The court also pointed out that the restrictions on substitution under s.35(5) do not apply where a claim is properly brought within the limitation period but it later becomes necessary to substitute a party because an interest in, or liability for, the claim has been transferred.

Background

The case concerned two appeals brought together. Both appeals arose from claims for negligent advice alleged to have been given by Pitmans LLP (Pitmans), a firm of solicitors. By the time the claims were brought, Pitmans had been acquired by Bircham Dyson Bell LLP, which then changed its name to BDB Pitmans LLP (BDB).

The claimants issued claims against BDB in the belief that it had assumed responsibility for Pitmans' liabilities. In fact there had been no novation of liabilities from Pitmans to BDB. In each case the claimants sought to substitute Pitmans as a party after the limitation period had expired. The High Court gave permission and the claimants appealed.

First gateway

It was common ground that it was not open to the claimants to contend that their case fell within the first gateway. This was because there is binding Court of Appeal authority to the effect that a distinction must be drawn between a mistake as to the name of a party and a mistake as to their identity. Only a mistake as to name will suffice for the purposes of the first gateway. This test was set out in The Sardinia Sulcis [1991] 1 Lloyd's Rep 201 in the context of the old Rules of the Supreme Court and held to apply to CPR Rule 19.6(3) in Adelson v Associated Newspapers Ltd [2007] EWCA Civ 701.

In the present case, it was the claimants' intention to sue BDB because they mistakenly believed that BDB had assumed responsibility for Pitmans' liabilities. That was a mistake of law as to the identity of the defendant, and not a mistake as to name. Such a mistake fell outside the ambit of the first gateway.

Second gateway

The appeal turned on whether the High Court had been right, in each case, to find that the condition set out in the second gateway had been met. The defendants' key argument was that the second gateway required the claims before and after the substitution to be the same in every material respect.

They submitted that this requirement was not met in the claims in question in the appeal.

Decision

The Court of Appeal allowed the appeal. Zacaroli LJ gave the lead judgment, with which Singh and Phillips LJJ agreed.

The only question for the court was whether, under the second gateway, the claim made in each of the actions could not properly be carried on by or against the original party unless Pitmans was added or substituted as defendant.

A principal reason for the decisions of the judges below was the reasoning of Leggatt J (as he then was) in Insight Group Ltd v Kingston Smith [2012] EWHC 3644, which had considered (obiter) the scenario now before the court. In that case, the claimants had sued an LLP, seeking damages for its negligent advice. In fact, most of the alleged negligence had been committed by the predecessor firm, before the LLP came into existence. The claimants applied to substitute the LLP for the firm after expiry of the limitation period. Finding that the case fell within the first gateway, Leggatt J nevertheless considered, obiter, the application of the second gateway. He concluded that the requirements of the second gateway were not met because the original claims asserted that the LLP had itself been negligent, whereas the proposed new claims asserted that the firm had been negligent.

Importantly, however, Leggatt J went on to consider what his conclusion would have been if the claimants' mistake had been that the LLP had taken over the liabilities of the firm (ie the same mistake made in this case). In that event, he concluded that the requirements of the second gateway would have been met because, if the original claims had asserted negligence in the provision of services by the firm, they would have been the same claims as those pursued against the LLP.

In the present case, the Court of Appeal noted that the Limitation Act was intended to strike a balance between hardship to a claimant being prevented from pursuing a good cause of action and hardship to a defendant in having a cause of action hang over them indefinitely. Section 35 of the Act provided for amendment outside the limitation period in specified circumstances only. The question for the court was whether or not the case fell within those circumstances. It did not have a general discretion to act in the interests of justice.

The parties agreed that, in order to comply with the second gateway, the original and new claim must be the same. The question was what "same" meant in this context.

The claimants contended that it referred to the facts which gave rise to a claim for damages against Pitmans, excluding the additional facts necessary to demonstrate that BDB had assumed liability for the claim. What mattered was what the original case was really about. This position reflected the obiter conclusion of Leggatt J in Insight Group. The defendants contended, in contrast, that it referred to all the facts which gave rise to a claim against BDB, including the facts establishing BDB's liability for Pitmans' negligence. This included the identity of the specific claimant and defendant.

The court rejected the claimants' submission. In other cases where substitution had been allowed, the identity of the person in whom the claim was vested had been the same before and after the substitution. This was not the case here, where substitution would involve a substantive change to the identity of the person against whom the claim was asserted. In this respect, the court considered Leggatt J's obiter reasoning in Insight Group to be wrong.

The Court of Appeal rejected the claimants' suggestion that, to allow the appeal, it would be necessary to accept that an alteration to any of the pleaded facts would prevent the claims being the same. The question was whether the two claims were in substance the same, or whether the essential facts which had to be averred were the same. It was not the case that every pleaded fact need be the same.

The court noted that, where A sued C for B's wrongdoing in circumstances where, at the outset of proceedings, B's liability had not been transferred to C, this was necessarily the result of a mistake. Mistake was catered for by the first gateway although, according to binding authority, that gateway was restricted to mistakes as to name and not as to identity. It was difficult to construe the second gateway in such a way that it then covered the type of mistake which had been deliberately excluded from the first gateway.

As noted by the claimants, this created an apparent anomaly, with a different outcome between: (1) a claimant suing C because they mistakenly believed that B's liability for negligence had been transferred to C; and (2) a claimant suing C because they mistakenly believed that it was C, not B, whose negligence had caused them loss, with substitution possible in the second case but not the first. However, to address that anomaly by allowing a broader interpretation of the second gateway would create further anomalies. The argument that a broader interpretation would still be subject to the court's discretion to disallow an amendment even if it fell within either of the gateways was not convincing. The exceptions to the general rules on additions and substitutions were narrow. It was unlikely that Parliament had envisaged an expansive interpretation, which would then be narrowed by the courts on a case by case basis.

The incoherence in approach complained of by the claimants was ultimately directed at the distinction between a mistake of fact and a mistake of law in the first gateway. It was agreed, however, that the court was precluded by Adelson from interfering with the interpretation of the first gateway. It was for the Supreme Court to correct this interpretation (if such correction was required).

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