Litigation followed in which the names sued the people running the underwriting agents for negligent management of the investment fund.

[1] It was accepted that the underwriting agents had a duty to exercise due care and skill (see for instance, s 13 Supply of Goods and Services Act 1982).

It was held that Merrett Syndicates was liable to both types of shareholders, as there was enough foreseeability to extend pure economic loss liability to "un-proximate" third parties.

Some of the first party Names claimed in tort to overcome the less favorable rules regarding the limitation period applicable to contract.

In allowing such an action, the House of Lords expressly overruled Lord Scarman's ruling in Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986], in which it was held that: "there is nothing advantageous to the law's development in searching for a liability in tort where the parties are in a contractual relationship."

This indeed is the view expressed by my noble and learned friend Lord Keith of Kinkel in Murphy v Brentwood District Council [1991] 1 AC 398, 466, in a speech with which all the other members or the Appellate Committee agreed.