Capita (Banstead 2011) Ltd & Anor v RFIB Group Ltd
2014
COMMERCIAL COURT
United Kingdom
CORAM
- THE HON. MR JUSTICE POPPLEWELL
Areas of Law
- Contract Law
- Employment Law
- Insurance Law
2014
COMMERCIAL COURT
United Kingdom
CORAM
AI Generated Summary
Capita Banstead and CHBC sought indemnity from RFIB for settled professional negligence claims involving a pension scheme. The court had to determine whether the indemnity clause covered wrongful acts before the Transfer Date and evaluate apportionment of losses. RFIB was found liable for 50% of the claimed losses and legal costs, totaling £1,958,415.73.
Judgment
The Hon. Mr Justice Popplewell :
Introduction
The First Claimant (“Capita Banstead”) is a private company previously named FPS Group Limited. The Second Claimant (“CHBC”) is a private company previously named Robert Fleming Benefit Consultants Limited. They bring a claim against the Defendant (“RFIB”) under an indemnity in a share purchase agreement dated 28 April 2004 (“the SPA”) by which RFIB sold the entire issued share capital in CHBC to Capita Banstead. At the relevant times CHBC carried on business as a specialist benefits consultancy, whose services included in particular providing pension scheme advice, and pension scheme management and administration services. One of its clients was the Queen Elizabeth’s Foundation for Disabled People (“QEF”). CHBC gave advice and provided services to the trustees of QEF’s occupational pension scheme, a defined benefits scheme known as the Queen Elizabeth’s Foundation for Disabled People Pension and Assurance Scheme (“the Scheme”). QEF and the trustees of the Scheme brought a claim against CHBC for negligence and other wrongdoing in relation to the Scheme between 2000 and 2008. The QEF Claim was settled at a mediation and the settlement embodied in a written agreement dated 11 October 2011 by which CHBC agreed to pay QEF and the Scheme trustees the total sum of £3,850,000 in settlement of their claim against CHBC. Capita Banstead paid the sum due from CHBC under the settlement agreement. The Claimants also claim to have incurred £66,831.46 in legal costs in dealing with QEF’s claim. Capita Banstead and CHBC seek to recover those sums from RFIB under clause 5.8.5 of the SPA which provides:
5.8 The Seller [RFIB] undertakes to indemnify and keep indemnified the Buyer [Capita Banstead] on behalf of itself and the Company [CHBC] and the Subsidiaries from any liabilities costs claims demands or expenses which any of them may suffer or incur arising directly or indirectly from ...
5.8.5 any services or products supplied by the Company [CHBC] or any of its Subsidiaries or any advice provided by the Company [CHBC] or any of its Subsidiaries (or any of their employees or agents) prior to the Transfer Date [close of business on 30 April 2004.”
RFIB resists the claim on two grounds. First, it contends that the indemnity only bites on losses caused by wrongdoing prior to the Transfer Date, 30 April 2004, and that no more than 45% of the settlement sum is attributable to wrongdoing by CHBC prior to tha