SERVICE OF THE CLAIM FORM: MITCHELL: RELIEF FROM SANCTIONS AND A “GOOD” REASON: AND SO TO BED: A LOOK AT THE CASE LAW
In Mitchell the Court of Appeal stated that a court should normally consider relief from sanctions in a “non-trivial” case if there were good reasons and referred to the case law relating to extending time for service of the claim form. This case law is examined in the recent case of Malcolm Green –v- And so to Bed Ltd [2013] EWHC 4016 (IPEC). This is relevant to both procedural issues relating to the claim form and applications for relief from sanctions.
AND SO TO BED … THE FACTS
This was a case involving breach of copyright. Proceedings were issued on the 29th April 2013. Prior to expiry of the four month period the claimant obtained an extension of time for service of the claim form. The District Judge allowed the application, without giving reasons, the Defendant applied to set aside the extension.
THE LEGAL PRINCIPLES
HH Judge Hacon reviewed the legal principles in detail:
The Law – general principles
- In Hashtroodi v Hancock [2004] 1 WLR 3206 CA the Court of Appeal considered the principles that govern an extension of time for service of a claim form under CPR 7.6. Dyson LJ, who delivered the judgment of the court, said this at paragraph 20:
“One of the important aims of the Woolf reforms was to introduce more discipline into the conduct of civil litigation. One of the ways of achieving this is to insist that time limits be adhered to unless there is good reason for a departure. In the Biguzzi case [1999] 1 WLR 1926 Lord Woolf MR said, at p 1933: “If the court were to ignore delays which occur, then undoubtedly there will be a return to the previous culture of regarding time limits as being unimportant.” ”
The strict approach to the time limit for serving a claim form was also emphasised by Rix LJ in Aktas v Adepta [2010] EWCA Civ 1170; [2011] QB 894:
“[91] The reason why failure to serve in time has always been dealt with strictly (even if CPR r 7.6(3) represents a still further tightening of the rules where a retrospective request for an extension is made out of time) is in my judgment bound up with the fact that in England, unlike (all or most) civil law jurisdictions, proceedings are commenced when issued and not when served. However, it is not until service that a defendant has been given proper notice of the proceedings in question. Therefore, the additional time between issue and service is, in a way, an extension of the limitation period. A claimant can issue proceedings on the last day of the limitation period and can still, whatever risks he takes in doing so, enjoy a further four-month period until service, and his proceedings will still be in time. In such a system, it is important therefore that the courts strictly regulate the period granted for service. If it were otherwise, the statutory limitation period could be made elastic at the whim or sloppiness of the claimant or his solicitors. For the same reason, the argument that if late service were not permitted, the claimant would lose his claim, because it would become time-barred, becomes a barren excuse. But even where the claimant is well within the limitation period despite his delay in serving, there is a clear public interest in the rules and the courts curtailing the efficacy of a claim form which, because it has not been served, is not very different from an unposted letter. Therefore, the strictness with which the time for service is supervised has entirely valid public interest underpinnings which are quite separate from the doctrine of abuse of process. It is sufficient for the rules to provide for service within a specified time and for the courts to require claimants to adhere strictly to that time limit or else timeously provide a good reason for some dispensation.”
Notwithstanding the general need for strict compliance with the four month deadline, under CPR 7.6 the court clearly has a discretion to allow an extension of time. The reasons for the failure by the claimant to serve the claim form in good time are highly material to the exercise of that discretion but not determinative. In Hashtroodi the Court of Appeal declined to give any hard and fast guidelines:
“[22] In view of the importance of this appeal, we have considered whether we should try to give some guidance as to how the discretion should be exercised beyond merely saying that it should be exercised in accordance with the overriding objective, and that the reason for the failure to serve within the specified period is a highly material factor. We do not, however, think that it would be right to go further than this…”
In Euro-Asian Oil SA v Abilo (UK) Ltd & ors [2013] EWHC 485 (Comm) Burton J reviewed the cases in relation to CPR 7.6 and whether the claimant had provided good reason for his failure to serve in time:
“[15] It is clear from the authorities that good reason is not required as a threshold: see Dyson LJ in Hashtroodi at paragraph 17:
“Against the background of the case law on [RSC] O 6 r 8, and in view of the introduction of new and stringent conditions in rule 7.6(3), it cannot have been intended that rule 7.6(2) should be construed as being subject to a condition that a “good reason” must be shown for failure to serve within the specified period, or indeed subject to any implied condition.”
But the approach has been dealt with in a number of differing, although analogous ways:
i) Per Dyson LJ in Hashtroodi at paragraph 19:
“Whereas under the previous law, a plaintiff who was unable to show a good reason for not serving in time failed at the threshold, under the CPR a more calibrated approach is to be adopted. If there is a very good reason for the failure to serve the claim form within the specified period, then an extension of time will usually be granted … The weaker the reason, the more likely the court will be to refuse to grant the extension.”
This was expressly recited by Rix LJ in Cecil v Bayat [2011] 1 WLR 3086 at paragraph 90.
ii) In Collier [v Williams [2006] 1 WLR 1945] Dyson LJ said at paragraph 131:
“If, as in the present case, there is no reason to justify the failure to serve the claim form in time, it should normally not be necessary to go further.”
And at paragraph 133:
“…where there is no reason, or only a very weak reason, for not serving the claim form in time, the court is most unlikely to grant an extension of time.”
Dyson LJ again gave the judgment of the court in Hoddinott v Persimmon Homes (Wessex) Ltd [2008] 1 WLR 806, when he said:
“The court is unlikely to grant an extension of time … if no good reason has been shown for the failure to serve.” ”
Thus, the poorer the reasons for the failure to serve the claim form in time, the less likely it will be that the court will grant an extension of time. The sort of reasons that are relevant will seldom if ever extend beyond reasons why the claimant had real difficulty in serving the claim form. In Hoddinott v Persimmon Homes (Wessex) Ltd [2008] 1 WLR 806 Dyson LJ (giving the judgment of the court) said
“[59] Nothing that we have said in this judgment should be interpreted as undermining the approach articulated in Hashtroodi’s case [2004] 1 WLR 3206 and the later cases. In his judgment, the district judge said:
“In my experience, there are very few applications [without notice for an extension of time for service of the claim form] being made since the 2006 cases unless there are real difficulties in actual physical service. Even fewer are being granted.” ”
- Among the reasons that will not qualify as good in this context, is the ground that a lack of substantive response by the defendant to the claimant’s complaint made it difficult or wasteful in costs to draft Particulars of Claim. In such circumstances the claimant should serve the claim form within the 4 months and seek an extension of time to serve the Particulars of Claim – see Hoddinott at [38] and [41].
- Immediately following the passage from paragraph 59 of Hoddinott quoted above, Dyson LJ said this in the same paragraph:
“But even where there is no good reason for failing to serve within the four months’ period, the court will exceptionally exercise its discretion to grant an extension where CPR r 7.6(2) applies.”
- It follows that the grant of an extension of time may be appropriate, even in the complete absence of any good reason for failure to serve in time, provided there are exceptional circumstances.
- What sort of circumstances qualify as relevant and exceptional? Significant among them are those which relate to the purposes for service of a claim form. Dyson LJ said this:
“[54] It is tempting to ask: what is the point in refusing to extend the time for service if the claimant can issue fresh proceedings? But service of the claim form serves three purposes. The first is to notify the defendant that the claimant has embarked on the formal process of litigation and to inform him of the nature of the claim. The second is to enable the defendant to participate in the process and have some say in the way in which the claim is prosecuted: until he has been served, the defendant may know that proceedings are likely to be issued, but he does not know for certain and he can do nothing to move things along. The third is to enable the court to control the litigation process. If extensions of time for serving pleadings or taking other steps are justified, they will be granted by the court. But until the claim form is served, the court has no part to play in the proceedings. A key element of the Woolf reforms was to entrust the court with far more control over proceedings than it had exercised under the previous regime. The rules must be applied so as to give effect to the overriding objective: this includes dealing with a case so as to ensure so far as is practicable that cases are dealt with expeditiously and fairly: CPR r 1.1(2)(d) . That is why the court is unlikely to grant an extension of time for service of the claim form under CPR r 7.6(2) if no good reason has been shown for the failure to serve within the four months’ period.”
In addition, a highly relevant factor (in a negative sense) is whether the claim would be time-barred if the claimant were to issue fresh proceedings. The court should not generally deprive the defendant of his expectation that the claim is no longer available to the claimant. It goes further: in Hoddinott Dyson LJ ruled (at [52]) that even if the matter is open to doubt, on an application to extend time for service of the claim form the court should not resolve the issue but make an assumption in the defendant’s favour:
“Where there is doubt as to whether a claim has become time-barred since the date on which the claim form was issued, it is not appropriate to seek to resolve the issue on an application to extend the time for service or an application to set aside an extension of time for service. In such a case, the approach of the court should be to regard the fact that an extension of time might “disturb a defendant who is by now entitled to assume that his rights can no longer be disputed” as a matter of “considerable importance” when deciding whether or not to grant an extension of time for service: see Hashtroodi’s case, para 18.”
“GOOD REASONS” ON THE FACTS OF THE CASE
The Judge found that there were not good reasons for the granting of an extension in the current case.
37. The first point to consider is whether there were good reasons for the Claimant’s failure to serve the claim form within the 4 month period. In my view there were none advanced before District Judge Lambert or before this court. The slowness by the Defendant in responding to the claim and the Claimant’s counsel being away on holiday did not qualify.
38. Therefore in order to overcome the usual strict rule on compliance with the four month deadline for serving its claim form, the Claimant must point to exceptional circumstances. He points to two at the time of the application to District Judge Lambert, namely that the Defendant had been told the claim form had been issued and that most of the infringing acts complained of were not time-barred.
39. I will return below to the notification that the claim form had been issued. The fact that a limitation defence open to the Defendant was lost because the Claimant was allowed to extend the period of service of the claim form was by itself sufficient to exclude the Claimant from being entitled, exceptionally, to an extension of time. It seems to me that whether the limitation defence was in relation to large or small proportion of the total infringements alleged is not to the point. The discretion to give the Claimant further time to serve the claim form should not be exercised where there is any such loss to the Defendant which cannot be characterised as de minimis.
40. This brings me to the third way in which Claimant puts his case. There would be no loss to the Defendant because of time-barred claims if the Claimant were to be excluded from claiming damages in relation to alleged infringements which occurred more than 6 years before the date on which this judgment is handed down – taken to be the date on which the Claimant would re-issue the claim.
41. That is true, but I do not accept that this would put the present case on all fours with Hoddinott. First, there is a difference between receiving correspondence setting out allegations and seeing the content of a claim form. Allegations in correspondence may or may not coincide in nature and scope with what a claimant sets out in his claim form. Only the latter expresses the precise nature of the claim that is being raised in the litigation.
42. Secondly, in relation to the second and third purposes of the service of a claim form referred to by Dyson LJ in Hoddinott, I do not think it is an answer to say that the burden rests on the defendant to move things along, by means of CPR 7.7, if he wishes to have a say in the progress of the claim and thereby also giving some control to the court. Even where, as here, the defendant knows that the claim form has been issued he may be entitled to take the view that the claimant is unlikely to pursue the claim and therefore the simplest and cheapest approach is to let sleeping dogs lie. I was told by Ms Jones that in the present case the defendant thought that the claim had been abandoned. If that is so, I can see why no application under CPR 7.7 was made.
43. The approach that the Claimant could and should have taken was to serve the claim form within the four months and then to apply for an extension of time to serve the Particulars of Claim. The requirements for such an extension are necessarily less stringent and that extension of time, if appropriate, would have achieved what the Claimant wanted.
44. I will therefore set aside paragraph 1 of the Order of District Judge Lambert dated 15 August 2013. Counsel for the Claimant did not suggest that the claim should not be struck out if that Order was set aside and so I will also strike out the claim.
MATTERS OF IMPORTANCE
These principles extend further than service of the claim form. In Mitchell Dyson M.R. stated:
- A similar approach to that which we have just described has been adopted in relation to applications for an extension to the period of validity of a claim form under CPR 7.6. In Hashtroodi v Hancock [2004] EWCA Civ 652, [2004] 1 WLR 3206, this court said that (i) the discretion to extend time should be exercised in accordance with the overriding objective and (ii) the reason for the failure to serve the claim form in time is highly material. At para 19, the court said:
“If there is a very good reason for the failure to serve the claim form within the specified period, then an extension of time will usually be granted….The weaker the reason, the more likely the court will be to refuse to grant the extension.”
- This approach should also be adopted in relation to CPR 3.9.
So the examination of the case law is relevant to the question of relief from sanctions under CPR 3.9.
EXTENDING TIME TO SERVE THE CLAIM FORM
The case highlights the risks in applying to extend time for service. In the Hoddinott case referred to in the judgment the Court of Appeal rejected a claimant was entitled to rely upon the application being granted as giving it a “false sense of security”.
- “In our judgment, the time has come to put the “false sense of security” point firmly to rest. We do not understand Robert Walker LJ to have been saying that the fact that a claimant is lulled into a sense of security by an order made without notice granting an extension of time is a factor to be take into account in deciding whether or not to set aside the order. He was merely stating as a fact that the solicitors may have been lulled into a false sense of security and suggesting that a word of warning from the district judge who extended time for service would have led the solicitors to take a different course. This was no doubt a helpful suggestion, but it was no more than that. Further, Robert Walker LJ emphasised that the decision should not be regarded as a precedent. We would add that Lord Woolf said nothing about the false sense of security point.
It follows that, if (as appears to be the case) Tugendhat J considered that Jones was authority for the proposition that the false sense of security point is a relevant factor to be taken into account by a judge who is deciding whether or not to set aside an order obtained without notice extending the time for service, we respectfully think that he was wrong to do so. ”
FINDING THE CASE
The Malcolm Green case is at http://www.bailii.org/ew/cases/EWHC/IPEC/2013/4016.html
RELATED POSTS: RELIEF FROM SANCTIONS
- The Mitchell criteria for relief is considered in detail at http://civillitigationbrief.wordpress.com/2013/11/28/the-mitchell-criteria-for-relief-from-sanctions-a-detailed-examination/
RELATED POSTS: SERVICE OF THE CLAIM FORM
- Service problems are considered at
http://civillitigationbrief.wordpress.com/2013/07/01/service-faults-and-the-match-is-over/
- In relation to Part 20 claims