On 24 December 2000 the appellant’s husband, Mr Richardson, was killed in a motor accident when the Rover car that he was driving collided with a Vauxhall car, driven by Miss Leandra Watson. Miss Watson was uninsured. The appellant brought a claim against her, but failed to give a timely notice to the Motor Insurance Bureau (‘MIB’) that was a condition precedent to the liability of the MIB to meet any liability established against Miss Watson. The appellant then discontinued that claim and commenced a fresh action against Miss Watson, giving, on this occasion, timely notice to the MIB. The action was, however, commenced outside the 3 year limitation period.

On 16 January 2006 His Honour Judge Taylor, sitting in Middlesbrough County Court, struck out this action as an abuse of process. He also held that he would have had no power to have granted an extension of time for the commencement of that action pursuant to section 33 of the Limitation Act 1980 (‘section 33’) by reason of the decision of the House of Lords in Walkley v Precision Forgings Ltd [1979] 1 WLR 606 but that, had he had such power, he would not have exercised it.

On 14 June 2006 the House of Lords in Horton v Sadler [2006] UKHL 27 held that the reasoning in Walkley was unsound and that the House should depart from that decision.

In this appeal, brought with the permission of Waller and Gage LJJ, the appellant seeks to reverse all aspects of the decision of Judge Taylor.

The collision in which Mr Richardson was killed occurred when he was pulling out from a minor road into a major road in Middlesbrough. It is common ground that he was at least partially to blame for this collision. The substantive issue in the action is whether Miss Watson was also causatively at fault.

Mark Dismore, a 14 year old boy, was travelling with Miss Watson as a passenger in the Vauxhall. He sustained relatively minor injuries. On 27 November 2003 he commenced an action for personal injury against ‘The Estate of P. Richardson (Deceased)’ as first defendant and ‘Leandra Watson’ as second defendant. Probate had, however, been granted to the appellant on 11 May 2001. The effect of this was that the first defendant should have been named as ‘Mrs Richardson as personal representative of Mr Richardson’. No point on this was taken by Messrs. Irwin Mitchell, the solicitors instructed by the appellant. They notified the MIB of their interest in the action and indicated that they were going to enter a defence on behalf of the estate and initiate Part 20 proceedings.

On 18 December 2003 a Part 20 claim was issued against Leandra Watson by ‘Nicola Richardson (Widow and Administratrix of the Estate of Paul Anthony Richardson)’. The claim was brought on her own behalf as widow, on behalf of her two children and on behalf of her husband’s estate. Under the Agreement of 13 August 1999 between the MIB and the Secretary of State for the Environment, Transport and the Regions the MIB would have been obliged to meet any liability on the part of Miss Watson in respect of these claims provided that notice in writing was given to the MIB of the commencement of proceedings, together with, among other things, a copy of the originating process, within 14 days of the commencement of proceedings. Irwin Mitchell notified the MIB of the Part 20 Claim by letter received on 19 December 2003, but did not serve the Part 20 Claim until 7 January 2004, 6 days out of time.

On 13 April 2004 judgment in favour of Mark Dismore was entered by consent in the sum of £3,700. On 28 April 2004 the MIB was joined as a second defendant to the Part 20 claim. The MIB filed a defence that addressed the merits of the claim and alleged negligence on the part of Mr Richardson. It also pleaded that the MIB was not liable because it had not been given proper notice in accordance with the Agreement.

On 15 December 2004 District Judge Cuthbertson made an order discharging the MIB from the proceedings and giving judgment in default of defence against Miss Watson for damages to be assessed.

On 17 March 2005 the appellant commenced a second action in the name of ‘Nicola Richardson as the widow and Administratrix of the Estate of Paul Richardson deceased’ against ‘Leandra Watson’. On this occasion, proper and timely notice was given to the MIB.

On 25 April 2005 the appellant served on the Court a notice of discontinuance of the first action. Mr Dermod O’Brien QC for the MIB sought to persuade us that this notice did not take effect until after 26 April 2005 and that on 25 April 2005 the appellant permitted the first action to be struck out. We see no reason for not accepting that the discontinuance took effect by the date shown on the notice. We would add that, had Mr O’Brien been correct, we do not see that this would have affected the merits of this appeal.

On 20 June 2005 the MIB served a defence in the second action which (a) dealt with the merits (b) relied upon section 12 of the Limitation Act 1980, (c) contended that Walkley disentitled the appellant from invoking section 33; and (d) alleged that the action should be struck out as an abuse of process.

The 1999 Agreement is the latest in a series of agreements dating back to 1946 under which the MIB agrees, in effect, to indemnify victims of negligent uninsured drivers who do not satisfy judgments entered against them. The MIB has always treated these agreements as giving rise to direct liability to claimants despite the absence of privity of contract. Liability is, however, subject to conditions precedent, which include exacting notice provisions. As we understand the position (although this was not conceded by MIB), the object of those notice provisions is not, as with statutory limitation provisions, to prevent stale claims but to ensure that the MIB is enabled to intervene to defend a claim and to prevent the entry of a default judgment.

Judge Taylor acceded to the MIB’s submission that the action should be struck out as an abuse of process. The relevant part of his judgment reads as follows:

Judge Taylor went on to hold that the claim was out of time by reason of section 12 of the Limitation Act 1980. He held that the decision in Walkley precluded any claim to an extension of time pursuant to section 33. Finally he held that, had section 33 been applicable, he would not have granted an extension of time. The reasons for this were as follows. The appellant’s case was essentially that Miss Watson had contributed to the accident by fault that consisted of excessive speed. The evidence as to her speed depended in part on estimates from witnesses and in part from calculations based on damage to the vehicles. Such evidence was less than ideal. The Police Accident Officer, who would normally have been expected to provide more reliable evidence was seriously ill. After 5 ½ years the matter was ‘getting stale’. The difficulties with the evidence would

In Walkley the House of Lords considered a provision in relation to limitation that was substantially reproduced in section 33 of the 1980 Act. This gave power to the court to extend the 3 year limitation period for bringing an action for personal injury having regard, among other things, to the degree to which the three year limit prejudiced the claimant. The House of Lords held that, where an action was commenced within the three year limit, but then discontinued and a second action started outside the limit, the claimant could not invoke the extension provision in relation to the second action. This was because the three year limit had manifestly resulted in no prejudice at all so far as the first action was concerned. In Horton v Sadler the House of Lords departed from Walkley both because the reasoning summarised above was unsound and because the consequences of the decision were generally recognised as unsatisfactory.

The facts in Horton v Sadler closely resembled those of the present case. The appellant was injured in a road accident for which the first defendant, Mr Sadler, was responsible. Mr Sadler was uninsured and impecunious. Two days before the expiry of the 3 year limitation period the appellant’s solicitors commenced proceedings. They failed to give the MIB proper and timely notice. They then commenced duplicate proceedings after the three year time limit had expired and gave the MIB proper and timely notice of these. The MIB invoked the three year time bar. The judge held that the MIB was entitled to do so and that he was precluded by Walkley from extending time under section 33 of the 1980 Act. He added that, had he had the power to extend time, he would have done so. There was an appeal to the House of Lords.

The House dismissed the MIB’s contention that it was an abuse of process for the appellant to commence a second action seeking the same relief. Lord Bingham of Cornhill held at paragraph 37:

Departing from Walkley, the House held that the fact that the first action had been commenced within the three year time limit was no bar to the application of section 33 to the second action. The House further held that the judge had been correct to hold that it was an appropriate case for exercising the discretion conferred by section 33 in favour of the appellant.

Judge Taylor plainly formed the view that it was objectionable and an abuse of process for a claimant who had failed to comply with the notice requirement of the MIB Agreement in one action to seek to escape the consequences by commencing a second action. We do not agree.

In Silverton v Goodall and MIB [1997] PIQR 451 solicitors acting for the plaintiff had failed to give a timely notice to the MIB. The MIB took the point that they were under no liability. In giving judgment in favour of the MIB the judge observed that the plaintiff’s solicitors

In giving the judgment of the Court of Appeal, Sir Ralph Gibson observed:

This suggested to us that in the past it has been quite common for a claimant, who has failed to comply with the MIB’s notice requirements, to discontinue an action and start again, that the MIB has taken no objection to this, when the second action has been within the limitation period and, indeed, has on occasion, decided not to take any point on the lateness of notice so as to avoid putting the claimant to the trouble of commencing fresh proceedings. We asked Mr O’Brien, who for many years has acted for the MIB, if this was the position and he confirmed that it was. He also stated that he did not submit that it was, of itself, an abuse of process to discontinue an action and commence a new one in such circumstances.

It seems clear from the passage that we have quoted from the speech of Lord Bingham in Horton v Sadler that the House of Lords did not consider that there was anything objectionable in the claimant in that case commencing a second action in order to cure the failure to give due notice to the MIB.

Where a claimant has not given a timely notice to the MIB and the MIB is not prepared to overlook this, we can see no objection in principle to the claimant discontinuing proceedings and commencing a fresh action, in which a timely notice is given to the MIB. Such conduct will normally remove any prejudice the MIB might otherwise be under as a result of late notice. For this reason, whatever the merits of his decision in respect of limitation, we hold that the judge was wrong to strike out this action on the ground of abuse of process.

Section 33 (3) of the 1980 Act requires the court to have regard to all the circumstances of the case and, in particular, to the following factors when considering whether to allow an action to proceed out of time:

Before the judge, the case was approached on the basis that all claims contained in the new proceedings were out of time and so stood or fell together. Mr David Phillips QC for the appellant frankly conceded that he had overlooked the fact that the appellant claims both on her own behalf and on behalf of her infant children whose claim is not out of time and will thus proceed in any event. This is undeniably a material difference and it is plainly necessary for us to exercise our discretion afresh. We turn first to consider the conduct of the appellant and of the MIB.

The fact that the appellant’s solicitors had not given a proper and timely notice to the MIB of the commencement of the first proceedings caused the MIB no prejudice. The MIB filed a defence on the merits and judgment in default was not given against Miss Watson until the MIB had been discharged as a party to the proceedings. It seems to us likely that the MIB stood on its rights in respect of the failure to give timely notice because it seemed to be in a position thereby to defeat the appellant’s claim. She was too late to start a fresh action in time and, while Walkley was good law, any fresh action would be met by a cast iron limitation defence. The MIB was perfectly entitled to act in this way but it was seeking thereby to get a benefit that was not one of the objects of its notice requirement.

Not surprisingly, the MIB’s action threw those acting for the appellant into some disarray. They sought unsuccessfully to contend that a timely notice had been given to the MIB in the first action. They then started the second action. They contended that, because of the misnomer to which we have referred in paragraph 6 above, the appellant had never been impleaded in the first action and that, accordingly, her Part 20 claim was a nullity. Thus she was not precluded by Walkley from claiming an extension of time under section 12 of the 1980 Act in the second action. The judge gave this unattractive argument short shrift. As Walkley is no longer good law we have not had to hear argument as to whether he was right to do so. We are strongly inclined to think that he was. Certainly Mr O’Brien is in no position to suggest that he was not.

The situation thus appears to be as follows. In January 2004 the MIB dealt an apparent death blow to the appellant’s claim by taking the point that she had not given timely notice of her claim. It was not until the decision of the House of Lords in Horton v Sadler was delivered on 14 June 2006 that her claim received a potential kiss of life. It is fortuitous that 18 months elapsed before this kiss of life was delivered. It is also fortuitous that the appellant had already commenced a second action, which seemed doomed to failure. It does not seem to us that the appellant should be blamed for the delay that has occurred between January 2004 and June 2006. It might even be said that the MIB brought this on its own head, by taking a somewhat technical point with the intention of killing the action.

Mr O’Brien has argued that the appellant is at fault for delaying until the 3 year limitation period was nearly exhausted before bringing her claim. There is some force in this, but the fact remains that she was within the limitation period when she brought her claim.

Mr O’Brien’s principal argument in favour of the judge’s decision that it was not an appropriate case for extending time was that the overall passage of time had imperilled a fair trial. He spent some time taking us to the evidence in an attempt to persuade us of this. That evidence falls essentially into two parts: (i) evidence of calculations based on the damage to the vehicles which suggests that, at the time of the collision, the Vauxhall car driven by Miss Watson was proceeding slightly in excess of the speed limit of 40mph; (ii) eye-witness evidence that suggests that the Vauxhall overtook two other cars at significantly greater speed than this before the collision. The latter evidence is presently in the form of a transcript of evidence given at the inquest into Mr Richardson’s death, which resulted in an open verdict.

We have formed the following conclusions about this evidence.

There is an arguable case that the collision, and Mr Richardson’s death, was attributable in part to negligence on the part of Miss Watson.

While the evidence is not ideal, it is possible for there to be a fair trial on the available evidence;

In so far as the passage of time may have made evidence less reliable, this is likely to be true of the evidence of the eye witnesses rather than of the calculations based on the impact. This situation is likely, if anything, to benefit the defence.

We return to the fact that the claim brought on behalf of the infant children will proceed in any event. Their claim turns on precisely the same issues as the appellant’s. We agree with Mr Phillips that the fact that, in the absence of a settlement, the MIB will have to defend a trial on the merits in any event weighs in favour of the appellant being able to join her claim to that of her children.

Taking all these factors into account, we have reached a different view from that of the judge as to the balance that has to be struck when applying section 33 of the 1980 Act. In all the circumstances of this case, we consider that it would be equitable not to apply the limitation provision of section 12 of the 1980 Act but to allow the appellant’s action to proceed.

For these reasons this appeal is allowed.