Causation in Professional Indemnity: is "but for" ever enough?

In an important judgment for professionals in all fields and their Insurers, the Court of Appeal yesterday applied Saamco principles to losses caused by the downturn in fortunes of Equitable Life and reached some very clear conclusions.

Mr Andrews had been company secretary at Ladbrokes Plc for many years. He amassed a pension pot of nearly £2m and, in 1994, approached Barnett Waddingham for assistance before deciding what to do on his retirement. In the event he split his fund between two products from Equitable Life:

• an annuity linked to the retail prices index

• a with profits annuity

It was the with profits annuity about which Mr Andrews complained; he alleged that he was negligently advised by Barnett Waddingham in relation to the application of the Policyholders Protection Act 1975 ("PPA 1975") to with profits policies; he said that, if he had been properly advised, he would not have touched the with profits annuity "with a barge pole" and would, instead,