Atha & Co Solicitors v Liddle

Nearly a decade ago, the claimant fell off her chair at work. She claimed compensation from her employers alleging that they were to blame. She retained the defendant solicitors to act on her behalf. The employers denied liability saying that there was nothing wrong with the chair. Proceedings were commenced. An expert, Mr Garry, was jointly instructed to give his opinion on whether or not the chair was defective. He wrote a report concluding that there was nothing wrong with the chair and that the accident had probably occurred simply because the claimant had leant over too far and caused it to topple over. The defendant solicitors discontinued proceedings. Thus the trial on liability, which had been listed to be heard on 6 April 2010, never took place.

The claimant was not happy with how her solicitors had dealt with her case. She went to see other solicitors and told them that she had not agreed to the discontinuance of proceedings and contended that, as a result of her previous solicitors’ breach of duty, she had lost a potentially valuable claim against her employers.

Eventually, proceedings were brought against the defendant solicitors in professional negligence. The claim form was not, however, issued until after the expiration of the six year limitation period. The defendant applied to strike out the claim and/or for summary judgment on the ground that the claim was statute barred.

The application came before His Honour Judge Mark Gargan on 17 December 2017 and was unsuccessful. The defendant now appeals that decision to this Court.

The defendant sent formal notice of discontinuance of the claimant’s personal injury claim on 31 March 2010. Accordingly, the six year limitation period in respect of the professional negligence claim expired on 31 March 2016. The claim form relating to this claim was received by the Court on 29 March 2016 but not issued until 7 April 2016. If the claim is taken to have been brought on the earlier date then it is in time. If it was brought on the later date, it is not and the defendant has a complete defence.

The defendant concedes that, for the purposes of limitation and subject to the satisfaction of various pre-conditions, a claim is taken to have been brought when the claim form is received by the Court. However, in this case it alleges that the claimants’ solicitor, Ms Jenkins, paid the incorrect issue fee upon presentation of the claim form. It contends that this amounted to an abuse of process the automatic consequence of which is that the claim was not brought until the claim form was issued and it is thus out of time.

CPR 16.2 (1) provides that where the claimant is making a claim for money the claim form must contain a statement of value in accordance with rule 16.3.

CPR 16.3 provides in so far as is material:

“Statement of value to be included in the claim form

16.3

(1)

This rule applies where the claimant is making a claim for money.

(2)

The claimant must, in the claim form, state –

(a)

the amount of money claimed;

(b)

that the claimant expects to recover –

(i)

not more than £10,000;

(ii)

more than £10,000 but not more than £25,000; or

(iii)

more than £25,000; or

(c)

that the claimant cannot say how much is likely to be recovered.”

The statement of value on the claim form in this case indicated that the claimant expected “to receive more than £10,000 but not more than £25,000.” The correct court fee for a claim of this value was £1,250 which is what was paid.

Ms Jenkins wrote to the defendant on 6 May 2010 stating that proceedings had been issued although they had not yet been served. In her letter she dealt with the issue of quantum in the following way:

“Full details of the financial loss cannot yet be calculated as the medical evidence in relation to the claim was incomplete. Further medical evidence needs to be obtained. In addition, enquiries must be made in relation to special damages that the claimant would be entitled to claim.”

The claim form was eventually served on the defendant on 3 August 2016. The defendant immediately suspected that Ms Jenkins had deliberately misstated the value of the claim to avoid paying a much higher court fee. It made a formal offer to settle the claim in the sum of £25,000 plus costs. When this offer was refused, despite the fact that it represented the maximum value which had been placed on the claim in the claim form, the defendants concluded that their suspicions had been confirmed. They asserted that the conduct of Ms Jenkins amounted to an abuse of the process of the court the consequence of which was that the claim had not been brought on the date upon which the tainted claim form had been received by the court. Her actions, they contended, had the effect of postponing the date upon which the claim had been brought to the date of the issue of the claim form and the claimant thereby fell foul of the limitation period.

In response to the defendant’s application to strike out the claim and/or for summary judgment, Ms Jenkins sought to justify her valuation in a witness statement dated 18 May 2017. It cannot be said that her explanation was a model of clarity.

In essence, she stated that at the time of drafting the claim form the claim value was unknown. However, if that were indeed the case then the claim would have fallen within CPR 6.3 (2) (c) as one in respect which “the claimant cannot say how much is likely to be recovered.” The appropriate fee for such a claim is £10,000. Ms Jenkins sought to suggest that she would have been worried that the court might not have issued the claim form where the value could not be predicted and that she might have difficulty in recovering the higher fee in costs from the defendant if the claim were subsequently to turn out to be worth less than £25,000.

I can readily accept that the quantification of the value of the claim was difficult but it is clear that Ms Jenkins had not come to a genuine and concluded view at the time of drafting the claim form that it was worth less than £25,000. Not only did she refuse the defendant’s Part 36 offer but she also served a costs budget estimating the claimant’s costs to trial in the sum of £192,369.40 which is hardly proportionate expenditure on a case worth no more than £25,000. The Particulars of Claim pleaded that the claimant “remains wheelchair bound, her diagnosis of CRPS continues. The quantum claim is likely to be substantial.” Even taking into account that a professional negligence claim of this kind is for the loss of a chance and not for the full value of the antecedent personal injury claim, it would be wholly unrealistic to conclude that the predicted value of the claim could have been less than £25,000.

I do not find, and the defendant does not allege, that Ms Jenkins was acting dishonestly when she purported to value the claim at between £10,000 and £25,000 and signed a statement of truth to this effect. At the very least, however, she had seriously misjudged the proper limits of the strategic leeway afforded to her by the rules. She had convinced herself that the tactical considerations referred to in her witness statement justified her choice of the statement of value. However, a statement of value is either a genuine reflection of the assessment of the author or it is not. A false valuation cannot be made true by the uncomfortable consequences of accuracy.

His Honour Judge Gargan concluded from all the materials before him that the statement of value did not amount to an abuse of process. He found that Ms Jenkins could and should have declared on the claim form that she was unable to say how much was likely to be recovered but, notwithstanding that, she believed that she was using the court process appropriately.

I do not agree with the conclusion of the court below. On any analysis, Ms Jenkins’ motives, however well intentioned, could never justify the deliberate misstatement of the value of the claim on the form. In Attorney-General v Barker [2000] 1 F.L.R. 759, Lord Bingham characterised an abuse of process as “a use of the court process for a purpose or in a way which is significantly different from the ordinary and proper use of the court process.”

The ordinary and proper use of the court process when providing the statement of value on a claim form involves the recording of the unvarnished truth. Deliberately departing from this ordinary and proper use for tactical reasons, such as removing the risk that the issue fee may subsequently be challenged when costs are being assessed, is significantly different from the ordinary and proper use of the court process.

That said, I am entirely satisfied that, but for the implications arising out of the context of the operation of the limitation period in this case, the abuse would not have been such as to justify striking out the claim. The usual position is accurately summarised in the notes in The White Book 2018 at paragraph 3.4.3:

“Of course, the court has power to strike out a prima facie valid claim where there is abuse of process. However there has to be an abuse, and striking out has to be supportive of the overriding objective. It does not follow from this that in all cases of abuse the correct response is to strike out the claim. In a strike-out application the proportionality of the sanction is very much in issue…The striking out of a valid claim should be the last option. If the abuse can be addressed by a less draconian course, it should be.”

When the application came before the lower court, the parties were agreed that if the court were to find that there had been an abuse of process then the defendant’s application would automatically succeed and the claim would be struck out. Accordingly, when the matter first came before me it was presented in the same way. However, I was not entirely satisfied that the law was as settled as the parties had assumed it to be. In particular, while keeping an open mind on the matter, I remained to be persuaded that a finding of an abuse of process concerning the payment of the court fee was either a necessary or sufficient consideration in the determination of whether or not a claim had been brought for limitation purposes. The hearing of the appeal was therefore adjourned to give the parties the opportunity to expand their arguments to accommodate my concerns.

Section 2 of the Limitation Act 1980 provides:

“Time limit for actions founded on tort.

An action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued.”

The central question on this appeal is whether the claim against the defendant was “brought” when the court received the claim form or when the claim form was issued.

The answer provided by the Practice Direction 7APD.5 is clear:

“Start of proceedings

5.1

Proceedings are started when the court issues a claim form at the request of the claimant (see rule 7.2) but where the claim form as issued was received in the court office on a date earlier than the date on which it was issued by the court, the claim is “brought” for the purposes of the Limitation Act 1980 and any other relevant statute on that earlier date.

5.2

The date on which the claim form was received by the court will be recorded by a date stamp either on the claim form held on the court file or on the letter that accompanied the claim form when it was received by the court.

5.3

An enquiry as to the date on which the claim form was received by the court should be directed to a court officer.

5.4

Parties proposing to start a claim which is approaching the expiry of the limitation period should recognise the potential importance of establishing the date the claim form was received by the court and should themselves make arrangements to record the date.”

The issue arises, however, as to whether the Practice Direction fully and accurately reflects the proper interpretation of section 2 of the 1980 Act.

In Barnes v St Helens Metropolitan Borough Council [2007] 1 W.L.R. 879, the claimant’s solicitor handed the claim form together with the appropriate fee to a clerk at the offices of the local county court within the relevant limitation period. However, as a result of industrial action, the form was not issued until after the expiration of that period. The defendant argued that 7APD.5 was wrong and that a proper interpretation of the 1980 Act was that a claim was only brought when it was issued and not before.

The Court rejected this argument. Tuckey LJ held at paragraph 16:

“I start simply by looking at the words used in the statute and the Rules. I approach them by expecting to find the expiry of a limitation period fixed by reference to something which the claimant has to do, rather than something which someone else such as the court has to do. The time at which a claimant “brings” his claim form to the court with a request that it be issued is something he has to do; the time at which his request is complied with is not because it is done by the court and is something over which he has no real control. Put another way one act is unilateral and the other is transactional. Looked at in this way I do not agree with the judge or Mr Norman that in this context the verb “to bring” has the same meaning as the verb “to start”. The 1980 Act can perfectly properly be construed so that in the context of the CPR a claim is brought when the claimant's request for the issue of a claim form (together with the court fee) is delivered to the court office. Paragraph 5 of the Practice Direction gives sensible guidance to ensure that the actual date of delivery is readily ascertainable by recording the date of receipt.”

The words in parentheses were to take on very particular significance in the cases to follow but it is worth pointing out that in Barnes there was no dispute that the proper court fee had been proffered at the time of the presentation of the claim form. Accordingly, the Court heard no argument as to whether or in what circumstances any shortfall in the fee paid would have the effect of postponing the date upon which the claim should be taken to have been brought for the purposes of the 1980 Act.

Furthermore, the Court was clearly working under the assumption that once a claim form was presented at the court offices there would be no circumstances in which the Court could reject it. Tuckey LJ held at paragraph 19:

“I do not see that receipt of the claim form by the court office involves any transactional act. The court staff who receive the documents are not performing any judicial function and have no power to reject them.”

This is a further indication that it was not the intention of the Court of Appeal to lay down any rule concerning the consequences which might follow in the event that the Court were, rightly or wrongly, to return the claim form on the ground that the fee tendered was in its view wrong, thereby recasting the relationship between the claimant and the Court as a transactional one. This possibility was simply not entertained.

Finally, the Court in Barnes held unreservedly that the Practice Direction was right. The Practice Direction makes no reference to the adequacy of the statement of value or fee.

In my view, therefore, the reference to the court fee in Barnes was no more than a passing narrative allusion to the usual process which, as it happened, had been followed uncontroversially in that case. It was not intended to create a free standing exception to the application of the Practice Direction. The point was simply not considered.

In Page v Hewetts Solicitors (Footnote: ¹) [2012] EWCA Civ 805 an issue arose as to when, as a matter of fact, the claim form had arrived at the court office. The defendant had succeeded in obtaining summary judgment, before the Master at first instance and upheld on the first tier appeal, on the ground that the form had arrived after the expiry of the limitation period. The Court of Appeal, however, found that the courts below had applied the wrong test. They had made a finding of fact, on the balance of probabilities, as to whether the documents had arrived in time rather than addressing the right question which was whether the claimant had no real future prospect of showing that the documents had arrived in time.

The matter was complicated by the suggestion that the court had lost the documents, including the claim form, which the claimant’s solicitors asserted they had delivered. As a result, the claimant’s solicitors had sent further copies which arrived after the expiration of the limitation period. The defendant argued successfully before both the Master and the judge that, on a proper interpretation of 7APD.5, the piece of paper issued by the court must be the same piece of paper which had been delivered. This argument was roundly rejected by the Court of Appeal. Lewison LJ observed at paragraph 29:

“29 In my judgment this was the wrong subject matter to debate. When an action is “brought” for the purpose of the Limitation Act 1980 is, in my judgment, a question of construction of the Act. It is not a question of construction of the CPR, let alone a question of construction of a Practice Direction. The CPR (and perhaps the Practice Direction) may inform the construction, but the question remains: what does the Act mean?”

He went on to consider Barnes and earlier cases in the following analysis:

“32 Taken literally, the ratio of Barnes v St Helens Metropolitan Borough Council is that once the claimant has delivered his request for the issue of a claim form to the court office, he has “brought” his action…

33 However, literalism is not fashionable, so it is also necessary to consider the policy that underpins the decision. Tuckey LJ dealt with this too. He pointed out that this meant that a claimant had the full period of limitation within which to “bring” his claim; and that it would be unjust if he had to take the risk that the court would fail to process it in time. It does not seem to me that the reason why the court fails to process the request in time alters the justice of the case. If it is unjust for the claimant to take the risk that the court staff are on strike, it seems to me to be equally unjust for him to have to take the risk that a member of the court staff might erroneously put his request in the shredder or the confidential waste, or that his request is destroyed by flood or fire in the court office, or is taken in a burglary. Each of these might be reasons why the court failed to process the request in time. Essentially the construction of the Act that this court favoured in Barnes v St Helens Metropolitan Borough Council is based on risk allocation. The claimant's risk stops once he has delivered his request (accompanied by the claim form and fee) to the court office. PD 7 cannot, in my judgment, alter the correct construction of the Act.

34 This is not a new approach. In Aly v Aly (1 January 1984), which also concerned time limits in the context of limitation periods, Eveleigh LJ said:

“It would be indeed surprising and harsh if a party who had done all that was required of him, should find himself unable to obtain the assistance of the court because the court itself had failed in some matter of procedure. Furthermore, when the rules lay down a time limit which has to be observed by a party to the litigation, their aim is to achieve whatever particular purpose is in mind by controlling the action of the party, and where on the reading of the appropriate rule that seems to be its intention it would be quite ridiculous, as I see it, to make the party responsible for anything that has subsequently to be done by the court.”

35 Thus the Court of Appeal held that:

“… one can only treat the words “apply to the Court” as meaning doing all that is in your power to do to set the wheels of justice in motion according to the procedure that is laid down for the pursuit of the relief which you are asking.”

36 Likewise in Riniker v University College London (31 March 1999) the Court of Appeal held that when a draft writ was in the custody of a proper court officer and in proper form the court had an inherent jurisdiction to treat it as issued on the day on which it was received. The underlying theme is, in my judgment, that a would-be litigant is not responsible for any shortcomings of the court…

38 If, therefore, the claimants establish that the claim form was delivered in due time to the court office, accompanied by a request to issue and the appropriate fee, the action would not, in my judgment, be statute barred. In my judgment both the Master and the judge were wrong to hold the contrary.”

This case has been subsequently interpreted as laying down as a matter of principle that a claim has not been brought at the time of the delivery of the claim form at the court offices unless the appropriate fee has also been tendered. However, such an interpretation overlooks the fact that, as in Barnes, the issue of the consequences of tendering the wrong fee were never considered by the Court. The Court had simply assumed that the correct fee had been proffered.

Furthermore, the Court identified the delivery of the form, the request to issue and the payment of the appropriate fee as sufficient conditions to pass the risk to the court. The Court did not have to rule, and did not in fact rule, upon whether the payment of the appropriate fee was a necessary condition in any or all circumstances.

One is also entitled to consider the precise nature of the “risk” which is said to be transferred upon delivery of the form. According to Page No.1 the relevant risk was identified to be one “that the court will fail to process [the claim] on time.” However, not every error in the process of putting a value on the claim and calculating the fee generates a risk of delay. For example, in the circumstances of the instant appeal, the fee was always going to be accepted by the court because it corresponded with the statement of value on the claim form. Thus there was never any risk that the procedural default of Ms Jenkins, serious as it was, would cause the court to “fail to process the claim on time”. Putting it another way, upon the receipt of the claim form the process ceased to be transactional.

Were I therefore to have decided this case simply by the application of the principles laid down in Barnes and Page No.1, I would have come to the clear conclusion that the Court of Appeal had simply not addressed the consequences of a failure to proffer the correct fee. However, there have thereafter followed a series of not entirely consistent first instance decisions which are founded upon the assumption, contrary to my own, that the Court of Appeal was intending to give guidance on the issue which they, in turn, felt obliged to follow.

In Page No. 1, the Court of Appeal remitted the limitation point to be determined as a preliminary issue. The question to be resolved was whether or not the claim had been brought in time and this was determined by Hildyard J in Page v Hewetts [2013] EWCH 2845 (Ch) “(Page No.2)”.

By the time the matter came to be argued in Page No.2, a new issue had arisen as to whether the claim form had been accompanied by the correct fee. The relevant history is set out in paragraph 27:

“27…5. Mr Lomax had retrieved the paper file for this matter from the Chancery records department. The file revealed that the first time the Registry received a claim form in this matter was 6th February 2009. There was a shortfall of £400 on the accompanying fee. On the 10th February 2009 someone from the Issue Department phoned Cavershams Solicitors and informed them of the shortfall. This shortfall was then received on 17th February 2009, and it was on that date that they sealed and issued the claim.

6.

The Court's current computer file contains less information, it merely states that the appropriate fee was received on 17th February 2009, and the claim issued on that date.

7.

I was told that if the Registry receives a faulty claim (i.e. the claim form is incorrect, the particulars are incorrect, or the appropriate fee is not enclosed) then normally the entire application is returned to the potential claimant with a letter explaining the nature of the defect. In this instance — and Mr Lomax was not able to discern the reason why from the file — the Registry instead had elected simply to call Cavershams Solicitors to inform them of the problem.

8.

Mr Lomax confirmed to me that the first date on which the claim was capable of being issued was the 17lh February 2009.”

The issue as to whether the claim would be statute barred, in any event, if the action had been found to have been brought on 6 February rather than 17 February remained unresolved. However, the Court concluded that, because the correct fee had not been tendered, the risk of delay remained with the defendant. Hildyard J concluded:

“56 It is, in a way, concerning that the fate of a claim should depend upon the miscalculation by such a relatively small amount of a court fee. I have considered whether it is so de minimis that the Court should not take it into account, or make some exception or allowance.

57 However, as I read Lewison LJs judgment in the Court of Appeal, the rationale of treating the receipt by the court of the required documents as sufficient and as transferring to the court the risk of loss or delay thereafter (see paragraph 31 of Lewison LJ's judgment) is that it is unfair to visit such risk on a claimant after he has done all that he reasonably could do to bring the matter before the court for its process to follow. Lewison LJ expressly described what had to be established by the Claimants: that the claim form was (a) delivered in due time to the court office, accompanied by (b) a request to issue and (c) the appropriate fee. In my judgment, the failure to offer the appropriate fee meant that the Claimants had not done all that was required of them; and they had left it too late to correct the error, which was a risk they unilaterally undertook.”

It is to be noted that Hildyard J was careful to identify the relevant risk, as I have done, as being that of “loss or delay thereafter”. In Page No.2 the entirety of the delay was caused by the claimant’s solicitor’s miscalculation of the appropriate fee and the subsequent justified refusal of the court to issue the claim form until the shortfall had been made up. As soon as the proper fee had been paid, the claim form was issued and thus no delay could be laid at the door of the Court.

There is, therefore, nothing in the decision in Page No.2 which is inconsistent with Barnes and Page No.1. The respondent contends that it is necessary for this court to depart from the decision in Page No.2 in order to sustain the chain of reasoning upon which it has embarked. I do not agree. In Page No.2 there were two very important factors which do not apply to the circumstances of the instant case: (i) the fee tendered was unequivocally inaccurate on the face of the claim form; and (ii) this demonstrable discrepancy was the cause of the subsequent delay in the issuing of the claim form. I interpret Hildyard J as limiting his analysis in paragraph 57 of his judgment to circumstances in which the tendering of the wrong fee causes a delay in issuing the claim form. Alternatively, he simply did not apply his mind (because he did not have to) to the situation where any inaccuracy in the fee paid was unrelated to subsequent delay. If my interpretation is wrong and Hildyard J intended to lay down an approach which is inconsistent with my analysis of the correct application of the law on this appeal then I must, with respect, depart from it.

In Lewis v Ward Hadaway [2016] 4 WLR 6, the claimants brought negligence claims against the defendant firm of solicitors. In each case the pre-action letter of claim sought substantial sums but the value of the claim stated in the claim form was considerably lower and the court fee paid by the claimant was that payable for a lower value claim. In some of the cases, the claim form was delivered to the court before, but was not issued until after, the expiry of the limitation claim. In every case the claim form was subsequently amended to claim the larger amount referred to in the pre-action letter of claim and the balance of the appropriate court fee was paid. The defendant sought an order striking out all of the claims on the basis that the claimants had deliberately understated the value of their claims in order to defer payment of the correct fee which, it contended, amounted to an abuse of process. Alternatively, the defendant applied for summary judgment on those claims where the claim form had not been issued until after the expiry of the limitation period, on the ground that they had not been “brought” within the limitation periods.

John Male QC, sitting as a deputy High Court Judge was, understandably, severely critical of the conduct of the claimants’ solicitors and reached the clear conclusion that they had perpetrated an abuse of the process of the court. He was not, however, persuaded that the nature and scale of the abuse was such as to warrant striking out all of the claims. However, twelve of the claim forms, although delivered to the court, had not been issued until after the expiry of the limitation period. The deputy Judge held:

“99 For the purposes of this application, it is common ground between the parties that the claim form was delivered in due time to the court office, accompanied by a request to issue. The only question which I have to determine on this application is whether the claim form and the request were accompanied by the “appropriate fee”. In determining that question, bearing in mind what the Court of Appeal said in Page v Hewetts was the policy underpinning Barnes v St Helens Metropolitan Borough Council, and also bearing in mind what the Court of Appeal said in Aly v Aly, I have to consider whether, in this case, the claimants did all that was in their power to do to set the wheels of justice in motion according to the procedure that was laid down for the pursuit of the relief which they were seeking. And, as per Hildyard J in Page v Hewetts, I must also have in mind the underlying rationale, which is whether the claimants had done all that they reasonably could do to bring the matter before the court for its process to follow, in order for the claimants' risk to cease.

100 Earlier in this judgment, I found that the conduct of the claimants in the manner in which they paid the fees was an abuse of process. In these circumstances, looking at the underlying policy just mentioned, I consider that the claimants did not do all that was in their power to do to set the wheels of justice in motion. It was within the power of the claimants to conduct themselves in a manner which was not an abuse of process. They could have done so by paying at the outset the fees properly due for the claims which they always intended to make. Equally, looking at the underlying rationale just mentioned, I consider that the claimants did not do all that they could reasonably have done to bring the matter before the court for its process to follow. Again, the claimants could have acted in a manner which was not an abuse of process. So, at the outset they could have paid the fees properly due for the claims which they always intended to make. Furthermore, they, or more accurately their Solicitors, could have heeded the words of the district judges in Modhvadia and Partridge.

101 It is correct, as argued by Mr Evans in his oral submissions that the claimants paid the fees which were technically due. By this, I mean that, in the case of Mr Lewis and Others, the claim was limited to £15,000 and Robinson Murphy paid the fee shown in the CPFO as payable for this claim, ie £245. So, as a strictly technical matter, Robinson Murphy paid the fee technically due. However, in doing so, they engaged in conduct which, I have concluded, was an abuse of process. In my judgment, paying “the appropriate fee” does not cover the payment of a fee in circumstances where the act of payment was an abuse of process.

102 In reaching this conclusion and in addressing Mr Evans' oral arguments, I consider that I am supported by comparing the result reached by Hildyard J in Page v Hewetts with the result urged on me by Mr Evans on behalf of the claimant in this case. In Page, the limitation defence succeeded because the solicitors had innocently miscalculated the court fee by a relatively small amount. Hildyard J found that to be, in a way, concerning. In this case Mr Evans says that, notwithstanding the abuse of process, the claimants paid the technically correct fee. So, he says, the limitation defence must fail. To my mind it would be inconsistent and wrong if, in Page, the limitation defence succeeded due to an innocent miscalculation by the claimant, whereas in this case the limitation defence failed due to a deliberate abuse of process by the claimants. This comparison supports me in my conclusion that the claimants here failed to pay the appropriate fee.

103 In his skeleton argument on behalf of the claimants, Mr Evans relied upon an example of it being discovered at trial that the wrong issue fee had been paid in a trivial amount. Mr Evans said that it would be quite absurd if the claim would then fail on the grounds that the limitation period had expired because proceedings had still not been brought. So, he argued, the same should apply here. In my judgment, that example does not assist him as the failure to pay a trivial amount might be held to be de minimis. Furthermore, the court might not allow an amendment at the late stage of a trial to plead the limitation defence, particularly where it related to non-payment of a trivial amount.

104 Also in his skeleton argument, Mr Evans argued that the defendant's construction allowed no room for the case where the claim form and the correct fee has been paid on date X, rather than an earlier date, and the claim form has been issued on date X as well. Mr Evans argued that, on the defendant's construction, such a claim is never “brought”. He said that the way round this absurdity is to recognise that it is plainly implicit in para 5.1 of the Practice Direction that the date of issue is the long-stop date on which the claim is “brought” for these purposes. I am not sure if there is actually anything between the parties on this particular point raised by Mr Evans. However, in so far as there is anything between the parties, I consider that I must base my decision on what the 1980 Act means rather than what the Practice Direction says: see Lewison LJ in Page at para 29. Accordingly, I cannot accept Mr Evans' argument based, as it is, on what is said in the Practice Direction, rather than being based on what is said in the 1980 Act.

105 In summary therefore, I conclude that, applying what was said in Aly v Aly , the eleven claimants did not do all that was in their power to do to set the wheels of justice in motion according to the process laid down. Nor, applying what Hildyard J said in Page, did the eleven claimants do all that they reasonably could do to bring the matter before the court for its process to follow. The claimants could have conducted themselves in a way which was not an abuse of process. They could also have heeded the words of the district judges in the cases I mentioned earlier. In Page, Hildyard J said of the claims in that case, that the claimants did not do all that was required of them in time; and they left it too late to correct the error, which was a risk they unilaterally undertook. In my judgment, in this case, these eleven claimants did the same in that they undertook the risk and that risk did not cease due to their conduct in acting in abuse of process. I therefore conclude that the appropriate fee was not paid in time.

106 It is common ground between counsel, and I agree, that if the appropriate fee was not paid in time the application for summary judgment in these eleven cases must succeed. I will therefore grant summary judgment in those cases.”

With all appropriate reticence and respect, I do not agree with this analysis. The risk referred to in Page No.1 is the risk that the court would fail to process the form in time. Where there is no delay in the issuing of the claim form attributable to any default on the part of the claimant then there can be no consequences in respect of which the claimant must bear the risk.

The case of Aly v Aly 1984 WL 281660, upon which the learned deputy relied, concerned an application to discharge an order extending the validity of a writ. The defendant applied for a summons well within time but the court delayed issuing the summons until nearly a week later. At first instance and on first tier appeal, the Court reluctantly concluded that the relevant application was made only when the summons was issued and not when it was received in the court office. The Court of Appeal overturned the decision of the lower courts. Eveleigh LJ held:

“Now the word “application”, as one sees it in the rules, has different shades of meaning, and there is no established technical meaning to the words “apply to the Court” which are the words which appear in Order 12, rule 8(1). So one has to interpret those words, as I see it, in a way that makes sense of the whole procedure that is being laid down, and it does not make sense to penalise a party who has done all that is in his power to do on the basis that a further act is required by the court which has not been done in time to allow the party to qualify for the relief for which he is asking. Consequently, one can only treat the words “apply to the Court” as meaning doing all that is in your power to do to set the wheels of justice in motion according to the procedure that is laid down for the pursuit of the relief which you are asking. That procedure in this case is by way of summons. All that the party could do, the defendant in this case, was to apply for it in the manner laid down by the court; that he did, and he therefore in my judgment applied to the court for the relief which he was asking within the period of 14 days from the notice of intention to defend the proceedings. I therefore have come to the conclusion that the learned judge did have jurisdiction to deal with that matter.”

The court in Aly was not applying a threshold of procedural perfection for the defendant to surmount. The issue was as to whether the procedural consequences of the delay caused by the court should redound to the prejudice of the defendant. The proposition that some defect in the form of the summons which was causative of no delay should otherwise postpone the date upon which the application to the court should be ascertained was simply not ventilated. In this context, it is dangerous to treat the observations of the court in Aly as if they were words to be given statutory force. Indeed, if the Court of Appeal in Barnes had intended to apply the “doing all that is in your power to do” test it is difficult to reconcile this with the observations of Tuckey LJ at paragraph 19:

“What I have said however is confined to the situation contemplated by the Practice Direction, that is to say receipt by the court office of the claim form. This necessarily involves actual delivery by whatever means permitted by the Rules to the correct court office during the hours in which that office is open (paragraphs 2 and 3 of the Practice Direction-Court Offices supplementing CPR Pt 2). That is what happened in this case. Different considerations might apply if delivery was made to the wrong place or outside office hours. They will have to be considered if they arise.”

A party who goes to the wrong place or who turns up outside office hours could hardly be said to have “done all that was in his power to do” and if that were the right test to apply then Tuckey LJ’s uncertainty as to the potential consequences of such defaults would be inexplicable.

Furthermore, if taken literally, the words “done all that was in his power to do” would cover not just cases of abuse of process but every instance of a procedural peccadillo perpetrated by a claimant regardless of how trivial it may be and regardless of the consequences, if any.

Accordingly, and notwithstanding the legitimate considerations of judicial comity, I decline to follow the reasoning in Lewis to the effect that a party must have done all in its power to do get the court fee correct as a prerequisite to the brining of a claim even where such discrepancy has had no impact whatsoever upon the timing of the issue of the claim form.

In Bhatti v Ashgar [2016] EWHC 1049, however, Warby J agreed with the approach of the court in Lewis in the following terms at paragraph 34:

“34 These authorities appear to identify a clear principle by which the court is to determine whether a claim has been “brought” for the purposes of stopping the limitation from running, the principle being that a claim is only brought for those purposes when the party concerned has done all that is in his power or to set the wheels of justice in motion. If he has done that, then the risk of any failing on the part of the court is cast upon the court and the opposite party. Doing all that is in one's power often, and perhaps ordinarily, involves proffering the correct fee to the court office at the same time as presenting the claim form and the applicable particulars of claim. In Page and in Lewis, a failure to do that led to the failure of the claim. It is however possible in principle that a failing on the part of the court at that stage of the process might lead to the claim being brought for limitation purposes, even though the correct fee was not paid. If, for instance, the court assumed the burden of calculating the appropriate fee and made an error, for which the claimant was in no way to blame it might, in appropriate circumstances, be said that the claimant had done all that was in his power or, to adopt the words of Mr Male QC, all that he reasonably could do to bring the matter before the court in the appropriate way.”

For the same reasons I gave in respect of the approach of the court in Lewis, I am constrained to conclude, respectfully, that I do not recognise the “clear principle” identified by Warby J.

I am not, however, alone, in entertaining misgivings over the course upon which the courts have embarked since the decision in Page No.1. In Glenluce Fishing v Watermota [2016] 5 Costs LR 1021, Roger ter Haar QC, sitting as a deputy High Court Judge, ruefully observed:

“46 In my view, the three first instance decisions to which I have referred, Page, Lewis and Bhatti, significantly extend the practical ambit of the Court of Appeal decisions upon which they are based. What the Court of Appeal cases were primarily concerned with was the question whether a party (in Aly v Aly a defendant, in the other two cases a claimant) could lose his rights to bring a claim or to make an application because of an error in the court office. It is unsurprising that the Court of Appeal repeatedly set its face against that proposition. In none of those cases did the Court of Appeal specify precisely what a party had to do in order to transfer the risk, as it is put, to the Court.

47 From those appellate cases has developed a somewhat hard edged principle as those cases have been applied at first instance whereby a claimant whose lawyers miscalculate the fee due, or absentmindedly pay the wrong amount, may cause a claimant to lose his or her right to bring an otherwise meritorious claim to court. At present it seems that the fact that the Defendant has suffered no prejudice and indeed may receive an unexpected benefit finds no place in the principle, and there appears to be no relief from sanction available from the court. It may be that as this principle is discussed and developed in future cases, those hard edges will be softened.”

It was not necessary, on the facts of the case before him, for the deputy Judge in Glenluce Fishing to break ranks with the first instance judges who had introduced the hard edges to which he refers. I am, however, in sympathy with his perception that the first instance decisions of Lewis and Bhatti (but not necessarily Page No.2) have strayed beyond the parameters of the ratios in the Court of Appeal authorities upon which they are founded. Although, at paragraph 44, the deputy judge considered that the decision in Lewis was “understandable” I find that he was not, in the light of his later observations, intending to imply that he had endorsed that reasoning in that case after a full consideration of the competing arguments.

The judicial retreat from the more mechanistic approach taken in the earlier first instance decisions was accelerated by Stuart-Smith J in Dixon v Radley House Partnership [2016] EWHC 2511 (TCC). In that case, the claimant brought negligence proceedings against the defendant architects. Proceedings were sent to the court, together with the correct fee for the amount of damages then claimed. Due to a backlog, proceedings were not issued by the court until approximately two weeks after receipt. When the proceedings were subsequently served, the amount claimed in damages was significantly more than the figure in the claim form as originally sent to the court and issued, such that the fee paid was incorrect. Having not initially pleaded limitation, the defendant subsequently applied to amend its defence on the basis that the claimant’s failure to proffer the correct fee meant that time had not stopped running for the purposes of ss.2 and 5 of the Limitation Act 1980 at the point that the court issued the proceedings and that the proceedings were now therefore statute-barred. There was no allegation of abusive procedural conduct.

In that case, Stuart-Smith J was also disinclined to follow the reasoning in Bhatti. He observed of Warby J’s distillation of principle at paragraph 44-46:

“44 This summary, to my mind, does not draw the necessary distinction between (a) the possible effect of the claimants' actions before the wheels of justice are set in motion by the issuing of the claim form and (b) the actual effect when the wheels of justice are set in motion by the issuing of the claim form (even if an inadequate fee has been paid). The authorities to which the learned judge was referred in Bhatti v Ashgar (which included additionally the decision of the Court of Appeal in Barnes v St Helens MBC [2006] EWCA Civ 1372; [2007] 1 W.L.R. 879) seem to me to provide no support for the proposition that, at least in the absence of abusive conduct, a claim is not “brought” for the purposes of the Limitation Act 1980 if the appropriate fee for issue is not paid when the court issues proceedings.

45 In rather different circumstances, the authorities to which I have referred were cited to Mr ter Haar QC, sitting as a deputy judge of the Queen's Bench Division in Glenluce Fishing Company Ltd v Watermota Ltd [2016] EWHC 1807 (TCC) on a claimant's application to amend to increase the value of its claim outside the limitation period. With suitable restraint and courtesy he made clear his concern at the significant extension of principle and the apparent introduction of a new “hard-edged” principle in the first instance decisions culminating with Bhatti. I respectfully agree with his concerns.

46 In a case where (a) abusive conduct is not present and (b) the court sets the wheels of justice in motion by issuing proceedings but (c) the claimant has not paid and the court has not required the correct fee, I reject the submission that an action is not brought for the purposes of the Limitation Act 1980 at the moment of issue. There is no support for the submission either in statute or in authority other than in Bhatti. For the reasons set out above I am not able to follow the path taken by Bhatti.”

In Dixon the defendant realistically conceded that the claimant had not, at any stage, perpetrated an abuse of the process of the court. Stuart-Smith J, however, made some, in part, obiter observations at paragraphs 52 and 55-56:

“52 These authorities leave open two possibilities for what should be regarded as “the appropriate fee” for the purposes of the principle laid down by the Court of Appeal in Page v Hewetts when applied to a case where the court has issued proceedings on payment of a fee which is subsequently said to have been inadequate and therefore inappropriate. The more favourable to claimants would be to hold that the fee proffered, even if it could be shown to be less than that required by the relevant order, was appropriate because it has proved to be all that the claimant was required to do to set the wheels of justice in motion. The advantage of this approach would be to discourage satellite litigation such as the present, which could (as Page shows) involve not merely enquiry into the actions of the claimant but also into the actions of the court, including investigation into why the court had issued proceedings as and when it did. It could also be said to meet the justice of the case as articulated by the Court of Appeal: see [47] above. The more rigorous approach is to say that the “appropriate fee” in this context is the fee dictated by the terms of the relevant order. In principle this seems to me to be preferable, because there is no obvious reason why a claimant should be said to have “brought” a claim for the purposes of the Limitation Act 1980 or any other act when it has failed to proffer the fee to which the court is entitled and which the court should normally have demanded as the price for issuing proceedings. Where the proffered fee is less than required by the relevant order, the fact that the court has subsequently issued proceedings should be seen as good fortune for the claimant rather than as validating the proffered fee: it does not prevent the court from requiring payment of the shortfall either on issue or later…

55 For these reasons, I hold that “the appropriate fee” for the purposes of the principle enunciated by the Court of Appeal in Page v Hewetts is the fee required by the relevant order which is to be determined by reference to the claim or claims articulated in the claim form (and, if issued simultaneously, the particulars of claim). In the absence of abusive behaviour, it is not to be determined by reference to claims which are articulated later, whether or not the later claims are ones which the claimant hoped or even intended to bring later at the time of issuing proceedings.

56 Where a party engages in abusive behaviour a range of responses are open to the court, up to and including striking out a case altogether. Since there is no allegation that the claimants' conduct in this case has been abusive it is neither necessary nor desirable to attempt to define or calibrate what the likely response of the court would be if it decided that a claimant had been guilty of abusive conduct in relation to the under-payment of fees where proceedings had been issued. It is worth noting, however, that even where a claimant's failure to pay the correct fee on issue is not abusive conduct, a range of options would be available to the court. If identified before issue, the court may simply refuse to issue the proceedings until the proper fee is paid. If proceedings are issued, the court could direct the payment of the missing fee either at the time of issue or later. Non-compliance with that order could result in the proceedings being stayed or in a succession of peremptory orders of increasing severity that could, at least in theory, lead to a claim being struck out for non-compliance. The existence and potency of these procedural responses demonstrates that the nuclear option (i.e. holding that all proceedings that are issued without the correct fee being paid are ineffective to stop time running) is unnecessary as well as being unwarranted.”

The appellant relies upon two further passages in the judgment of Stuart–Smith J relating to the proper interpretation of Page No.1. The first relevant passage is to be found at paragraph 2:

“2 The summary answer to the dispute, in a case where it is not alleged that a claimant's failure to proffer the correct fee is abusive procedural conduct, may be split into two periods:

i)

In the period between (a) when the claimant submits the claim form and proffers the inadequate fee and (b) when the court issues proceedings, the failure to proffer the correct fee will prevent the conclusion that the action has been “brought” for the purposes of the Limitation Act 1980 before the moment that the court issues the proceedings; but

ii)

Once the court issues the proceedings, the mere fact that the fee proffered by the claimant and accepted by the court (a) is less than should have been proffered and accepted for the claim identified in the claim form or (b) becomes so because of a subsequent increase in the quantum of the claim advanced in the proceedings does not prevent the action from being “brought” for the purposes of the Limitation Act 1980 when it is issued by the court.”

The second is at paragraph 47:

“47 Where a claimant wishes to establish that time stopped running before the date on which the court issued proceedings, the principle established by Page v Hewetts applies: time will only stop running once the claim form is delivered to the court office, accompanied by a request to issue and the appropriate fee. The Court of Appeal did not define what it meant by “the appropriate fee”. It concentrated on the injustice of risk being left with the claimant where the claimant “had done all that was required of him” or had done “all that was in [his] power to set the wheels of justice in motion”: see [34] and [35]; and upon the injustice to the litigant in being “responsible for any shortcomings of the court” or responsible where “the court is itself responsible for delay in issuing or loss of the originating process”: see [36] and [37]. And, at [33] Lewison LJ said that: “It does not seem to me that the reason why the court fails to process the request in time alters the justice of the case.””

It is important to bear in mind that the issue which Stuart-Smith J had to determine in Dixon was limited to the question as to whether, in the absence of abusive conduct, the failure to pay the correct fee serves to prevent even the subsequent issuing of the claim form from amounting to the bringing of a claim. The defendant in that case was seeking to rely on the decision in Lewis in support of this brave argument. Stuart-Smith J distinguished Lewis albeit observing at paragraph 40 that:

“...paying the appropriate fee” (as discussed by the Court of Appeal in Page v Hewetts) “does not cover the payment of a fee in circumstances where the act of payment was an abuse of process”. On the facts with which Mr Male QC was dealing, I respectfully agree. However, he did not say or imply that a non-abusive under-payment of a fee means that the issuing of the claim form by the court is ineffective to stop time running. I do not consider that, properly understood, Lewis v Ward Hadaway provides any support for the defendants on the present application in relation to the period after proceedings had been issued.”

I note that neither side in Dixon needed to argue that the Court should depart from the analysis in Lewis. The defendant supported it and the claimant distinguished it. The observation of Stuart-Smith J on the status of Lewis was therefore obiter and made without the benefit of relevant argument. The defendant in the instant case has failed to persuade me that his remarks are such as to undermine my analysis.

In the circumstances of the instant appeal, I conclude that, despite the claimant’s solicitor’s abuse of the process of the court, the claim was brought for limitation purposes at the time the claim form was received by the court and not when it was later issued. The relationship between the claimant and the Court ceased to be transactional at the earlier date.

The central feature of this case which leads me to this conclusion is that such delay as there was in the issuing of the form was entirely unconnected with the abuse. Some might argue that a party guilty of abuse should not be entitled to take advantage of the relatively indulgent approach of the Court of Appeal in Barnes to the circumstances in which a claim can be said to have been brought under the provisions of the 1980 Act. As against this, however, the court retains the power in any given case to strike out a claim in the event that the abuse is sufficiently egregious. Where, as here, the abuse falls very short of such a level and has no impact on the timing of the issue of the claim then it may be thought that it would be wrong in principle to permit the provisions of the 1980 Act to be deployed as a tool of retrospective and disproportionately draconian discipline.

I repeat, and accept, that I am only able to reach this conclusion by declining to follow both Lewis and Bhatti. I do not need to comment on the correctness of the decision in Page No.2 for the purposes of adjudicating on the merits of this appeal.

It follows that this appeal falls to be dismissed. However, I would add by way of postscript that the proliferation of irreconcilable first instance decisions over the last few years is such that the time is now ripe for authoritative guidance from the Court of Appeal.