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Courting Disaster

Woodward & Anor v Phoenix Healthcare Distribution Ltd [2019] EWCA Civ 985

In April 2018, we reported on the decision in Woodward and Another v Phoenix Healthcare, where the Court retrospectively validated service of a Claim Form after expiry of its validity despite it not having been served properly. In doing so, Master Bowles suggested that the defendant (and its solicitors) had not complied with their duty to further the Overriding Objective, but had instead played “technical games”.

We consider below the recent successful appeal to the Court of Appeal. This confirms that generally solicitors are under no duty to alert opponents to any problems regarding service and emphasises the importance of obtaining confirmation that a solicitor has authority to accept service of proceedings before they are served.

Background Facts

The Claimants’ solicitors, Collyer Bristow LLP (‘CB’), sent a Claim Form and Particulars of Claim to the solicitors for the defendant, Phoenix Healthcare, Mills & Reeve LLP (‘MR’). The documents were sent by way of service. However, MR were not authorised to accept service; CB did not check this. MR received the Claim Form before its expiry, but on instructions from Phoenix Healthcare did not notify CB of their error before the validity of the Claim Form expired.  MR subsequently told CB that they had served the Claim Form defectively because MR were not authorised to accept service. CB applied to retrospectively validate service under CPR 6.15(1) and (2).They could not issue a fresh Claim Form as limitation had expired.

First Decision

Master Bowles allowed the validation on the basis that:

(1)  The service attempts by CB fulfilled the objectives of good service, as the clear purpose (which was to make the defendant fully aware of the Claim Form and its contents) had been achieved; and

(2)  MR’s conduct in not informing CB of their mistake was not helping the Court further the Overriding Objective under CPR1.3.

Master Bowles highlighted the case of Abela v Baadarani [2013] UKSC 44 which had held that CPR6.15 was not only for “exceptional cases” but applied where there was "good reason". Master Bowles saw point (2) above as a good enough reason to validate service of the Claim Form retrospectively, suggesting that MR had been deliberately game playing by failing to tell CB that they were not authorised to accept service until after the Claim Form had expired. Master Bowles also cited Lord Briggs’ minority judgment in Barton v Wright Hassall LLP [2018] UKSC 12 ('Barton'), who had warned that defendants benefited from a “windfall” by acquiring a limitation defence if service was not validated in such cases.

Appeals

HHJ Hodge QC heard the first appeal and set aside service of the Claim Form, overturning Master Bowles' judgment on the basis that:

(1)  Master Bowles had erred in stating that MR’s conduct was contrary to CPR1.3;

(2)  Master Bowles had erred in calling MR's conduct “game playing”; and

(3)  The facts were not appropriate to show “good reason” to validate service, with CB “courting disaster” by delaying to serve the Claim Form.

The Claimant then appealed to the Court of Appeal, which agreed with HHJ Hodge QC and dismissed the appeal.

Asplin LJ agreed that Master Bowles had erred in finding that MR’s conduct was contrary to CPR1.3. HHJ Hodge QC was correct that CPR6.15 did not impose a duty on solicitors in the same way that duties were imposed regarding other CPR rules, since CPR6.15 was a decider as to whether the Court even has jurisdiction of a claim. MR therefore had no duty under CPR1.3 to advise the Claimant or CB that service was invalid. Asplin LJ reiterated that to do so would have been near on impossible, as it would have involved asking a client to allow a claim to be brought against them where it would otherwise have failed.

Finally, Asplin LJ stated that the facts of this case and Barton were actually “all but indistinguishable”. Consequently, she ruled that MR taking the service point on instructions from its client could not be seen as playing “technical games”. While Master Bowles had given great weight to Abela when looking at good reason to validate, in Abela the defendant had not only refused to co-operate regarding service, but had been obstructive, which was not the case here. Both Asplin LJ and HHJ Hodge QC followed Barton in finding that the Claimants’ solicitors had actually “courted disaster” by waiting until near expiry of the limitation period to attempt service.  Nevertheless, Asplin LJ observed that the position could differ if there is a “substantial period before the expiry of the limitation period” in which a solicitor failed to tell their opponent that they were not authorised to accept service; in this case there was only a couple of days, and in Barton none.

Comment

This case brings helpful clarity to a solicitor’s duties, upholding the long-standing principle that solicitors do not generally owe duties to their opponents in litigation; and clarifying that the general position is not altered by the Overriding Objective of the CPR in these circumstances. An application to validate service retrospectively will always involve the exercise of a court's discretion and a court will take into account all the circumstances. However, solicitors should remain aware that:

  1. The factual matrix of each matter is relevant to the exercise of the court's discretion. It cannot always be assumed that technical points about service can be successfully taken  in every case; and
  2. This decision suggests that the time left before expiry of limitation could be relevant  The longer defective service occurs before expiry, the more cautious a solicitor should be in assuming that no duty to correct the other side arises particularly that it does not have authority to accept service .

While the first instance decision suggested that a solicitors’ duty to warn the other side outweighed their client's ability to take advantage of another solicitor's mistake about service, this Court of Appeal decision reinforces the orthodox position that solicitors generally owe their opponents no duties in litigation. It is also a reminder of the long-standing principle that the Court will usually be very strict about service of Claim Forms being effected correctly, absent obfuscation by the proposed defendant or its representatives and of the need, if possible, to try to effect service of proceedings well in advance of the expiry of the validity of the Claim Form and to verify beforehand that a solicitor has authority to accept service of proceedings before service is attempted.

Contact

For more information please contact Jonathan Hyde, Director Jonathan.Hyde@dwf.law or Kirsty Poots Trainee Solicitor, Kirsty.Poots@dwf.law.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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