Price v Price (t/a Poppyland Headware)

This is an appeal by the claimant Paul Terence Price against an order by Judge O’Brien at the Norwich County Court on 19^th October 2002 whereby he allowed the defendant’s appeal against an order of Deputy District Judge Pugh on 15^th August 2002. The deputy district judge had granted the claimant an extension of time for serving the particulars of claim in this personal injuries action. In allowing the defendant’s appeal, the judge struck out the action. Permission was granted for this second appeal on the grounds that it gave rise to an important point of practice.

The accident which gave rise to these proceedings is said to have taken place on 5^th May 1998. The claimant and the defendant are husband and wife, and at the material time the defendant was employing the claimant as a shop assistant in her hat shop in Cromer at a salary of £60 per week. The claim form was issued on 4^th April 2001, without any accompanying particulars of claim, medical report or schedule of loss. It was served on 14^th April 2001. The particulars of claim ought to have been served on the defendant on or before 28^th April 2001 pursuant to CPR 7.4(1)(b) which provides, so far as is material, that:

At that time there was an unresolved dispute as to whether a court had power in any circumstances to extend the time for serving particulars of claim pursuant to the general power to extend time which is contained in CPR 3.1. In Totty v Snowden [2001] EWCA Civ 1402; [2001] 4 All ER 577 it was held that this power did exist. However, CPR 7.4(1)(b) contains the mandatory word “must”, from which it can readily be inferred that the longer the period a claimant allows to elapse before he/she applies for an extension of time, the slower a court may be to exercise a favourable discretion. In the event no application for an extension of time was made until 16^th July 2002, over 14 months out of time.

By this time this court had made it clear in Sayers v Clarke Walker (a firm) [2002] EWCA 645; [2002] 3 All ER 490 that in a case of any complexity, when a court was considering an application for an extension of time made after the time prescribed for the taking of a step in proceedings had expired, the court should follow the checklist given in CPR 3.9. Although the present case is concerned with an extension of time for serving particulars of claim, and not with an extension of time for appealing, the underlying logic is the same. If the court is not willing to extend time, the action will be at an end because the claimant will not be able to proceed with it any further.

Although this judgment had been fully reported in the All England Law Reports on 17^th July 2002, the deputy district judge did not, as this court had adjured, approach his task within the structured framework set out in CPR 3.9. He seems to have thought that it was sufficient for him to consider whether there was an adequate explanation of the delay and whether the defendant had been significantly prejudiced by the delay. His approach was reminiscent of the approach forced on the courts in pre-CPR days when an application was made to strike out a claim for want of prosecution. He appears, among other things, to have been influenced by a dictum of Chadwick LJ in Totty v Snowden [2001] EWCA Civ 1402 at [46] to the effect that once a defendant had been served with a claim form he would be in a position to invoke the assistance of the court if particulars of claim were not forthcoming within due time.

On the defendant’s appeal Judge O’Brien, too, did not adopt the CPR 3.9 framework. He overruled the deputy district judge because he took the view that this was plainly a claim where there had been disgraceful, long delay all the way through it. He said that a great deal of the delay was unexplained, and insofar as it was explained it was in circumstances where the conduct of the claimant’s solicitors was reprehensible. He therefore found that the delay was deliberate, long and without explanation.

When he came to consider matters of prejudice, he considered what Sir Thomas Bingham MR had said in a pre-CPR context in Costellow v Somerset County Council [1993] 1 WLR 256, 264H:

The judge said that for the reasons he had given he did not regard what had been going on, on the claimant’s side of the action, as being capable of the description of “a procedural default”. Having regard to the degree, extent and gravity of the delay in this case and the real reason for that delay he thought it was right that justice did not require the defendant to prove an enormous amount of prejudice to her. It seemed to him that there was prejudice, and that the deputy district judge had somewhat underrated it. He also founded his decision on matters relating to the administration of justice. He said that to permit an extension of time in all the circumstances of this case would be an affront to civil justice and an affront to the administration of justice under the Civil Procedure Rules, which he was not going to permit. He therefore held that the deputy district judge was wrong.

The claimant is legally aided, and it is noteworthy that the deputy district judge and the judge in turn directed that the claimant’s solicitors should show cause why they should not pay the defendant’s costs of the original application for an extension and the defendant’s appeal.

The reasons why the two judges took such a jaundiced view of the behaviour of the claimant’s solicitors are not difficult to seek. The first notification the defendant’s insurers received about the claimant’s accident was when they received a letter on 9^th April 1999, 11 months after the accident. A period of six months then elapsed before they agreed to provide indemnity in principle for this claim. On 5^th November 1999 they obtained a short statement from the defendant, and on the same day the claimant’s solicitors wrote to them for the first time. This letter did not comply with the Pre-Action Protocol for Personal Injury Cases in that it did not contain a clear summary of the facts on which the claim was based, nor any indication of the nature of any injuries suffered nor, most importantly, of any financial loss incurred (Protocol, para 3.2). In these circumstances there was nothing within the letter to enable the insurers to put a broad valuation on the “risk” (Protocol para 3.5). Instead, the solicitors merely said that they were acting for Mr Price, identified the date of his injury at work, and referred to their understanding that the insurers already had full details of the circumstances of the accident from Mr Price and that an identified firm of loss adjusters had been investigating the circumstances of the accident. At this stage the insurers had received no notice of any claim for loss of earnings. Their initial investigation had revealed that Mr Price had returned to work after the accident and had suffered no loss of earnings as a result of it.

On 17^th November 1999 a legal aid certificate was granted to Mr Price, limited to obtaining further evidence and counsel’s opinion thereafter.

On 4^th January 2000 the claimant’s solicitors particularised their allegations of negligence for the first time. They also told the insurers that they wished to instruct a local consultant rheumatologist, Dr Gaffney, to prepare a medical report. Their letter was phrased in such a way as to make it clear that they were familiar with the provisions of the Pre-Action Protocol relating to the instruction of experts (Protocol, paras 3.14 to 3.19). The defendant’s insurers agreed to Dr Gaffney being instructed, and on 2^nd February 2000 they wrote to the effect that negligence was accepted “subject to the sight of medical evidence which will confirm causation”. In the ordinary course of things it would have been expected that this admission of liability would have resulted in the disclosure of Dr Gaffney’s medical report, once it was ready (Protocol para 3.21). The defendant’s solicitor has said that at this stage up to £10,000 was being allowed by the insurers for the cost of a claim for a moderate back injury, and that their belief that there was no loss of earnings claim influenced their decision on the value of the claim and the extent of any investigations that were required.

The defendant’s insurers knew nothing more about the matter for over 14 months, when the claim form, issued on 4^th April 2001, was served by the court. This stated, unexpectedly, that the value of the claim was expected to exceed £50,000. As I have already said, the particulars of claim were not served with the claim form. Nor were they served 14 days afterwards, as required by CPR 7.4(1)(b). It now appears that the claimant’s legal aid certificate had not been extended to cover the issue of proceedings, and that his solicitors had no medical evidence to substantiate a claim by their client on the scale which he wished to present. On 8^th May 2001 the defendant’s insurers wrote to the claimant’s solicitors in the following terms:

It now appears that all the necessary notes and records had been made available to Dr Gaffney by 24^th May 2000. He then asked for further records, and in September 2000 he recommended a MRI scan, which was performed in November 2000. The claimant’s solicitor has said that he did not receive a copy of the scan until January 2001, and, without giving any details at all, he asserts that there followed a further lengthy delay because of the doctor’s failure to respond to a request for further comment. The procedure envisaged by the Pre-Action Protocol had completely broken down, presumably because Dr Gaffney was giving unwelcome advice. The claimant’s solicitors did not tell the defendant’s insurers (or their solicitors, who were first instructed when the claim was served) what was going on. Instead, they told them, by a letter dated 11^th July 2001, that counsel had now been instructed to advise the Legal Services Commission as a preliminary to receiving authority to settle particulars of claim. It appears that they had received this advice by 2^nd August, because they told the defendant’s solicitors by a letter of that date that they were now seeking authority for the extension of the legal aid certificate.

There followed a short exchange of correspondence in which the defendant’s solicitors were contending, wrongly as it turned out, that it was not possible to obtain an extension of time for service of particulars of claim. This dispute had been cleared up by mid-October, however, and they certainly did not at any time agree expressly or impliedly to any extension. The judge was extremely critical, moreover, of the contents of a letter from the claimant’s solicitors dated 4^th September 2001 in which they said:

The judge said:

In my judgment, the judge’s comments were justified. His thinking coincided with the approach of this court in Carlson v Townsend [2001] EWCA Civ 511; [2001] 3 All ER 663, another case in which a claimant’s solicitor did not like the advice given by a medical expert whose identity had been agreed with the other side and then sought to instruct a different expert without obtaining the other side’s agreement first.

On 12^th October 2001 the claimant’s solicitors told the defendant’s solicitors that as soon as they received the necessary authority from the Legal Services Commission they would issue an application for an extension of time to serve the particulars of claim. After further correspondence the defendant’s solicitors inquired on 13^th November 2001 why particulars of claim had not been served with the claim form and whether the claimant’s solicitors were still attempting to obtain legal aid to cover their application. They received no reply, and had to send a chasing letter five weeks later. This chasing letter appears, at long last, to have prompted the claimant’s solicitors to make the requisite application to the Legal Services Commission on 20^th December 2001, and the necessary extension of the certificate was granted eight days later. The certificate was formally amended to cover all steps up to trial on 21^st January 2002.

At some unspecified date counsel advised in consultation that “it was deemed essential to commission an up to date medical report”. On 24^th January 2002 the claimant’s solicitors wrote:

The judge commented in these terms:

The letter dated 24^th January provoked an understandable response on 30^th January 2002:

The letter received no response. A chasing letter ten weeks later received the following terse reply on 16^th April:

On 22^nd March 2002, nearly three months after receiving the extension to the legal aid certificate and without notifying the defendant’s solicitors, the claimant’s solicitors had instructed a different consultant rheumatologist (Dr Hazleman) in place of Dr Gaffney. Against this background the judge made the following comment on their letter dated 16^th April:

On 29^th April Dr Hazleman issued his report, in which he attributed the claimant’s continuing back problem, which he described as chronic and disabling, to the accident four years earlier. The claimant’s solicitors did not serve his report on the defendant’s solicitors when they received it. Instead the latter had to write a further chasing letter on 28^th May. This received a stalling reply on 6^th June 2002. Eventually on 29^th July 2002 the defendant’s solicitors accepted service of an application for an extension of time to serve the particulars of claim, accompanied by a witness statement, Dr Hazleman’s medical report and a schedule of special damages, which revealed a claim for £548,170.

The service of these documents, four years and three months after the relevant accident, constituted the first notification that the defendant’s solicitors had received:

This, then, was the material round which the claimant’s application for an extension of time was centred. In my judgment Judge O’Brien was correct to take the view that the order of the deputy district judge should not stand, even if not for the reasons he gave. It is not sufficient for an appeal court in a case of this kind simply to say that the order made in a lower court was wrong, if the case turned on the exercise of a discretion. I explained the governing principles in my judgment in Tanfern Ltd v Cameron-MacDonald [2000] 1 WLR 1311 at paras 32-33. Another helpful way of describing the appellate function in relation to judicial discretion is to be found in the judgment of Lord Woolf MR in AEI Ltd v PPL [1999] 1 WLR 1507, 1523C-D:

The defect in the approach of the deputy district judge was that he did not address his mind to a number of the most important considerations set out in the check-list in CPR 3.9, so that he exercised his discretion without taking very material matters into account.

Mr Heathcote Williams, who appeared for the defendant, sought to show us that Judge O’Brien did take a lot of the matters set out in CPR 3.9 into account, although he did not structure his judgment, which was given immediately the hearing ended, around that framework. In my judgment, however, there was considerable force in the submission made by Miss Studd, who appeared for the claimant, that his approach to items (h) and (i) on the checklist was either superficial or plainly wrong. These items read:

It is unnecessary to examine too rigorously the question whether “the effect of the failure to comply” refers narrowly to the immediate effect of failing to serve particulars of claim within 14 days. The main point which Miss Studd made was that the effect of granting relief would be to allow her client to have access to the court for the trial of his very large claim, which would otherwise be denied to him, whereas the effect on the defendant’s side would merely be that her insurers would have the inconvenience of mounting a defence to the claim on issues which were still susceptible of a fair trial, notwithstanding the huge delay. She also argued that any prejudice which might face the defendant’s advisers in having to defend this claim once they knew its details would not be significantly greater than those that would have faced them if they had received these details 15 months earlier.

In my judgment the judge’s approach was indeed flawed in this respect. He does not appear to have taken into account the fact that the claimant would be barred from prosecuting what was represented as a valid claim for over £½ million if he denied him the relief he sought. Although he weighed in the balance the prejudice to the defendant, he did not clearly weigh in the balance the prejudice to the claimant. In these circumstances he left out of account an important feature of the case which he ought to have considered. In the circumstances this court will have to exercise its discretion afresh.

On most of the factors enumerated in the CPR 3.9 checklist, the argument tends strongly in favour of the defendant but not sufficiently to warrant the claimant being denied access to the court completely if this was his first default following the institution of proceedings. Thus:

No point arises about the trial date (g), and I have already explained why it is item (i) rather than item (h) on which our attention should really be focussed. So far as item (h) is concerned, the failure to comply meant that the claimant could no longer proceed with his claim without obtaining the defendant’s agreement or a ruling of the court granting him an extension of time, while the defendant was in the converse position that the claim could not proceed against her unless one or other of these events (in reality the second of them) occurred. This is why it is item (i) which is so much more important.

The real tension here, therefore, is between the interests of the administration of justice and the effect which the granting of relief would have on each party. Other relevant considerations tend strongly in favour of the defendant. Can the fact that the claimant is being denied access to the court (with all its ECHR Article 6(1) implications) drive the balance down the other way?

I summarised the effect of relevant Strasbourg jurisprudence in this area when delivering the judgment of the court in Woodhouse v Consignia plc [2002] EWCA Civ 275 at [43] – [44]; [2002] 1 WLR 2558, 2559. I said:

It follows that if this court considers that a refusal of an extension of time in this case would be a proportionate response to the claimant’s failure to state clearly what he is claiming and the reasons underlying his claim, despite so many requests by the defendant’s insurers, his Convention rights would not thereby be imperilled because the concept of a fair trial betokens fairness to both sides.

The interests of the administration of justice can best be identified in the present context by reference to CPR Part 1. CPR 1.1(2) carries within it the ideas that justice will best be achieved if:

By CPR 1.3 a claimant is required to help the court to further the overriding objective of being able to deal with his case justly. By CPR 1.4 the court is under a duty to further the overriding objective by managing the case actively.

In his seminal judgment in Biguzzi v Rank Leisure plc [1999] 1 WLR 1926 Lord Woolf MR made it clear that the new Civil Procedure Rules had ushered in a new regime, and that it was no longer useful to look back at decisions under the pre-CPR regime because that was a different regime. We no longer have to succumb feebly to the argument that a defendant was already so prejudiced that any further prejudice caused by a further long delay could not be regarded as significant. On an occasion like this we have to look objectively at the extent to which the defendant would be prejudiced if the case was allowed to continue, whether on the enlarged basis for which the claimant is now contending or at all, and then consider whether and the extent to which the claimant’s cumulative defaults have caused that prejudice. Our final duty is to decide whether it would be a disproportionate response to stop the case now by refusing the extension of time outright, or whether it may be possible to fashion a more proportionate response.

In her respondent’s notice the defendant (in reality her insurers) articulated clearly the ways in which they would be prejudiced if the claim would be allowed to proceed. They say that the claimant’s conduct has deprived them of the opportunity to investigate at an early stage matters where documents may well be incomplete, lost or inapplicable, and where the recollection of former employers, colleagues and administrators may be crucial. They split their arguments into two parts. In the first they identified not only the issue whether the claimant had complained of back trouble prior to the incident at work (bearing in mind that complaints are not always made to doctors) but also how successful he had been in his management consultancy type work, and why he had left it, allegedly to take a job as his wife’s shop assistant at £60 per week. In the second they identified questions relating to the conduct of the Poppyland Headwear business: who was its true proprietor (and the employer), why this business failed (if it did), and whether the claimant had ever expressed any intention or plan of returning to management consultancy type work in due course.

It is obvious that the parties are not on an equal footing now. All these matters are within the knowledge of the claimant. The defendant’s insurers have to start investigating them now, long after the claimant should have explained his claim to them. It is also obvious that the case cannot now be dealt with expeditiously. Nor will it be so easy to deal with it fairly in the light of the delay that has occurred.

The claimant is in serious default in relation to his duty to help the court to deal with his case fairly. He has also made it impossible for it to manage the case actively because until he served his particulars of claim and the defendant responded to it, there was nothing for the court to manage. Although it would have been open to the defendant’s solicitors to incur the expense of seeking directions from the court, as suggested by Chadwick LJ in Totty, they were certainly not obliged to incur this expense, especially where the claimant’s solicitors were holding them at bay with statements which turned out to be some way distant from the whole truth.

In my judgment this is a case in which this court has to say “enough is enough”, and like the judge (though for different reasons) to refuse the extension of time sought, unless it were possible to impose conditions on any order for an extension. There are just too many considerations pointing in favour of the defendant to allow the claimant’s right of access to a court for the purpose of prosecuting his enlarged claim to trump those considerations on the facts of this case. It is not only that he (or his advisers) failed to comply with the pre-action protocol, and that he (or they) failed to serve the particulars of claim within the time prescribed by the rules or to answer the questions asked of them often more than once. It is also that the defendant’s insurers (and, in turn, their solicitors) acted impeccably throughout this history in seeking the information they needed to evaluate the claim properly with a view to resolving it, if possible, without the need for the expense of court proceedings at all. In other words, they complied with their CPR 1.3 duty: the claimant did not. The result was that the court was deprived of the opportunity of managing the case actively in pursuance of the overriding objective by reason of the claimant’s defaults, and it would not now be possible to deal with the case in a manner that is fair to both sides if the court simply extended time unconditionally.

There is, however, a route available by which the court could do effective justice to both sides. The operation of CPR 3.1(2)(a) and 3.1(3)(a) give the court power to extend time for compliance with a rule subject to conditions. In Walsh v Misseldine (CAT 29^th February 2000) this court made effective use of this power, which needs to be more widely used on appropriate occasions.

In that case the claimant was claiming damages for injuries suffered in 1989 in a very serious road traffic accident. His claim was pursued effectively, if very slowly, until 1994, but a four-year delay then ensued. The claimant then sought to enlarge his claim greatly by introducing a lot of new issues of which the defendant’s insurers had no notice when they calculated the value of the claim in the early 1990s for the purposes of a payment into court. Four paragraphs in my judgment (with which Stuart-Smith LJ agreed) are relevant in the present context:

It appears to me that it is possible to adopt a similar approach in the present case. It is very important that this court should not relax the disciplinary framework created by the Civil Procedure Rules in a case like this. On the other hand to bar the claimant from pursuing his claim as it stood in April 2001, when the particulars of claim should have been served, would be a disproportionate response and would give the defendant’s insurers an unjustified windfall.

I would therefore allow this appeal by extending the time for the service of the particulars of claim on condition that no claim is made for special or general damages other than what may be substantiated by any pre-April 2001 written report by Dr Gaffney which the claimant may care to disclose in support of his claim. The court will hear counsel as to the precise wording of the requisite condition. The order for costs made by the circuit judge should stand, and I would direct that the claimant pay the defendant the costs of this appeal (on the usual public funding terms), such costs to be available for set off against any damages the claimant may recover in this action. If the claimant wishes to proceed with his claim on this condition, the particulars of claim must be filed by 24^th July 2003 [28 days from the date this judgment is handed down].

That in this action the claimant may only claim such injury as is substantiated by the medical evidence received by the claimant’s solicitor from Dr Gasney prior to April 2001 and losses consequential on such injury; and

That the claimant files and serves the particulars of claim claiming such injury and loss together with the said medical evidence and a schedule of such loss by 22^nd July 2003.

The costs order made by Judge O’Brien in the court below do stand.

The claimant pay the defendant the costs of this appeal to be subject of detailed assessment if not agreed.

Save that the defendant may set-off the amount of such costs against any damages or interest which the claimant may recover, the determination of the claimant’s liability to pay such costs and any application by the defendants for an order for payment of such costs by the legal services commission under section 18 of the legal Aid Act 1988, alternatively under Regulation 5 of the Community Legal Services (Cost Protection) Regulations 2000 be referred to a costs judge in accordance with regulation 10 of the community legal services (Costs) regulation 2000.

The claimant’s cost of the appeal be the subject of detailed assessment in accordance with the community legal services (Costs) Regulations 2000.