Commentary - Courts overturning influence of the Chester case

The case of Beary v Pall Mall Investments (2005) reaffirms the Court of Appeal's decision in White v...

The case of Beary v Pall Mall Investments (2005) reaffirms the Court of Appeal's decision in White v Paul Davidson and Taylor (2004), which was reported in Post Magazine, (13 January 2005).

The failure of a solicitor in White to give proper advice did not cause any loss because the claimant would not have acted any differently if he had even given the correct advice.

The facts in Beary related to negligent financial advice given to the claimant by Pall Mall Investments. In terms of the claimant's pension, the defendants recommended a drawdown contract. It was alleged that the defendants failed to advise the claimant that there were a number of ways in which he could have dealt with his pension fund. The claimant's evidence was that, if he had been properly advised, he would have purchased an annuity contract.

The court held that the advice given was negligent but it was the issue of causation that is of most interest. The judge found that if the defendant had advised the claimant of the possibility of an annuity contract but had advised against it then the claimant would have followed that advice.

Consequently, causation was not established.

On appeal, the Court of Appeal considered an argument put forward by the claimant relying in particular upon the decision in the medical negligence case of Chester v Afshar (2004) that as the advice had been deficient there was no need to prove causation.

This was rejected and the court said that the Chester case should not be applied generally in claims for negligent financial advice.

The courts are, at every opportunity, limiting the scope of the exceptional decision on causation in Chester. The fact that the Court of Appeal specifically said the case would not apply generally in claims for negligent financial advice suggests that while it was thought by some to be very significant at the time, the scope of the Chester case is being steadily eroded. Jason Nash, BLM Manchester

These law reports are contributed by insurance law firm Berrymans Lace Mawer (

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