DECISION REGULARISING SERVICE OF UNSEALED CLAIM FORM NOT SET ASIDE EVEN THOUGH UNAUTHORISED BODY HAD SERVED THE CLAIM FORM
In Heron Bros Ltd -v- Central Bedfordshire Council (No 2)  EWHC 1009 (TCC) Mr Justice Edwards-Stuart declined an application to vary his original order that service of an unsealed claim form, served under the Public Service Regulations, was an irregularity that could be cured. The application was made on the grounds that the entity that had served the claim form was not authorised to conduct litigation.
The claimant had instructed a body known as Quigg Golden to issue proceedings in an action relating to a public procurement dispute. The claim form had been issued by Quigg Golden but not properly served. The judge held that the service of the copy claim form was, under the specific provisions of the Public Procurement (Miscellaneous Amendments )Regulations 2011 an irregularity that could be cured. Shortly after judgment was given the defendant made an application on further grounds relating to the inability of Quigg Legal to issue and serve the claim form in any event.
- At 10:30 am on 20 March 2015 I handed down judgment following an application by the Defendant to strike out this claim. That judgment had been circulated in draft on 9 March 2015 and each of the parties submitted two further notes in relation to costs and consequential matters prior to the handing down.
- Shortly before 2 pm on 20 March 2015, that is to say about three hours after the judgment had been handed down, the court received submissions from the Defendant raising a further point which it said was relevant to the exercise of the court’s discretion to cure the irregularity in relation to the service of the claim form. Since, as the Defendant assumed (correctly), no order giving effect to the judgment had been sealed, it invited the court to revisit the judgment and consider afresh the exercise of its discretion in the light of the new point.
- The point raised is that the consultants advising the Claimant, Quigg Golden, were not authorised to conduct litigation, which the Defendant submits is exactly what they were doing when issuing and serving the claim form. The Defendant says that, although it had suspected that this was the case, it did not know this for certain until it saw a note by the Claimant’s leading counsel dated 18 March 2015.
- In a Note dated 24 March 2015 the Claimant responded to the Defendant’s application for the judgment to be revisited.
- As before, the Claimant was represented by Ms. Sarah Hannaford QC and the Defendant by Mr. Jason Coppel QC.
Whether the court should accede to this application in principle
- The Claimant’s note of 18 March 2015 was sent to the court by an e-mail timed at 15:45. It must have reached the Defendant’s counsel at about the same time, or perhaps a little earlier, because his note in response, also dated 18 March 2015, was received by the court at 16:30 on that day.
- The Defendant’s note of 18 March 2015 submitted that the Claimant had now acknowledged, for the first time, that Quigg Golden was not authorised to conduct litigation, but was licensed only to instruct the Bar for advice and advocacy services.
- The Defendant relied on this to mount a submission in relation to costs to the effect that the Claimant should not be entitled to recover the costs of work which is work that only a solicitor could do. Alternatively, the Defendant contended that since any claim by Quigg Golden against the Claimant in respect of such fees would not be enforceable, the Claimant would not be liable to pay them and so should not be able to recover them from the Defendant.
- In this note there was no suggestion that these activities of Quigg Golden were relevant to the issue of discretion in relation to the irregularity in the service of the claim form.
- In its post-judgment note of 20 March 2015 the Defendant commented that the Claimant’s Supplemental Note of 20 March 2015 refrained from commenting on the “serious matter” of Quigg Golden’s unlawful activities in these proceedings, although (said the Defendant) it had implicitly acknowledged the force of the Defendant’s allegations by abandoning its claim for Quigg Golden’s fees. Thus the Defendant submitted that the Claimant had no answer to the charge laid by the Defendant in relation to Quigg Golden’s role. The Defendant concluded its submissions in this note by saying:
“It is the Claimant’s Note of today’s date which has finally crystallised the matter.”
- Although that Supplemental Note was in fact dated 19 March 2015, it was received by the court at 09:48 on 20 March 2015. Since counsel for the Defendant referred to it on 20 March as a note “of today’s date” I assume that he saw it at about the same time. But even if that was the case, I do not consider that the Defendant was right to submit that the Claimant’s Note of 19 March 2015 “crystallised the matter”.
- As I have already mentioned, the Claimant’s Note of 18 March 2015 said in terms that Quigg Golden was not authorised to conduct litigation and that it was not on the record in this case. The first part of this statement was effectively an admission that Quigg Golden was not authorised to issue proceedings, which was substantially the point that the Defendant had been making.
- It is plain, therefore, that when the Defendant served its note of 18 March 2015 it was in possession of all the facts on which it now relies. Indeed, it had suspected the true position from the outset. This is not a case where the Defendant has come into possession of new material following the handing down of the judgment.
- Mr. Coppel referred me to a decision of the Supreme Court, In Re L and Another  1 WLR 634. In that case the court gave a single judgment, by Lady Hale, with which all members of the court agreed. The case concerned a preliminary judgment in care proceedings in which the judge concluded that the father was the perpetrator of injuries sustained by the child. About two months later, before the order giving effect to the judgment had been sealed, the judge issued a “perfected judgment” in which she said that on further consideration of the evidence she was unable to find to the requisite standard which of the parents had injured the child.
- The Supreme Court, reversing the Court of Appeal, after noting that it had long been the law that a judge is entitled to reverse his decision at any time before the order giving effect to that judgment is drawn up and perfected, held that the judge was entitled to change her mind since no order had been sealed. Lady Hale said, at :
“I would agree with Clarke LJ in Stewart v Engel  1 WLR 2268, 2282, that [the judge’s] overriding objective must be to deal with the case justly. A relevant factor must be whether any party has acted upon the decision to his detriment, especially in the case where it is expected that they may do so before the order is formally drawn up. On the other hand, in In Re Blenheim Leisure (Restaurants) Ltd, Neuberger J gave some examples of cases where it might be just to revisit the earlier decision. But these are only examples. A carefully considered change of mind can be sufficient. Every case is going to depend upon its particular circumstances.”
A little later, at , Lady Hale made it clear that the application of an exceptionality test was not the correct approach.
- The examples given by Neuberger J (as he then was) in In Re Blenheim (Restaurants) Ltd, The Times, 9 November 1999, were:
“… a plain mistake by the court, the parties’ failure to draw to the court’s attention a plainly relevant fact or point of law and the discovery of new facts after judgment was given.”
- Whilst I accept that this is not to be treated as a closed list of categories, I consider that they are all examples of situations where either something has obviously gone wrong or relevant material was overlooked through no fault of the parties. In my view they do not sit easily with the situation where a party knows the relevant facts (or, where appropriate, the relevant law) but simply fails to appreciate a potential legal consequence of the matters of which it is aware.
- It therefore seems to me that in principle there has to be something more than a post-judgment second thought based on material that was already in play. If it were otherwise, any fresh point that occurred to a party following the handing down of a judgment would entitle the party to require the court to hear further submissions with a view to revisiting the judgment. That would then become the rule rather than the exception. It seems to me that this would accord neither with the interests of finality of judgments nor with the overriding objective to deal with cases justly and at proportionate cost, particularly in the sense of ensuring that parties are on an equal footing, avoiding unnecessary expense and dealing with cases expeditiously. However, at the end of the day the court has a discretion which must be exercised judicially and not capriciously.
Whether the discretion should be exercised in this case
- This, of course, is not a case where the court has changed its mind since handing down the judgment or is considering doing so. It is an application by one party that the court should revisit its judgment on the issue of exercise of discretion to remedy the defective service of the claim form.
- It seems to me that the court should approach this application in three stages. First, the court should decide whether the application should be entertained at all. Second, if it is appropriate to consider the application, the court should consider whether the point raised by the application is reasonably arguable. If it is not, the application should be dismissed. If it is, then the third stage is for the court to give directions for a short oral hearing to enable the point to be argued fully (unless the parties have agreed that it can be dealt with on paper).
- For the reasons that I have already given, I do not consider that this is a case in which the circumstances are such as to justify the court entertaining an application to revisit the judgment. No fresh material has come to light that was not known before the judgment was handed down. Although, as I have already mentioned, the Claimant did not reveal until its Note of 18 March 2015 that Quigg Golden was not authorised to conduct litigation, this was already strongly suspected to be the case by the Defendant. In its original submissions in support of the application the Defendant submitted that it appeared that the Claimant had instructed consultants who are not authorised to conduct litigation. This point was made in support of the submission that the court should not exercise its discretion to grant an extension of time for service of the claim form.
- However, in fairness to the Defendant, it is right to point out, as the Defendant did in its post hearing submissions, that the suggestion that service of a copy of the unissued claim form might amount to service, albeit irregular, under the Regulations arose for the first time in the course of argument and was then adopted by counsel for the Claimant. So when the Defendant was preparing its initial submissions for the hearing this was not a point that had been raised. Nevertheless, the Defendant had the opportunity, which it took, to make submissions about it following the hearing on 27 February 2015 and, in addition, there was a significant interval (ten days) between the handing down of the judgment in draft and the date on which it was formally handed down in open court. In these circumstances, I consider that the Defendant had a proper opportunity to consider the point that sending a copy of the unissued claim form might amount to valid service and its potential ramifications.
- In fact, I concluded for different reasons that the application to extend time in this case simply did not cross the threshold of the court’s jurisdiction, so the question of whether or not Quigg Golden had been acting in a manner that was unauthorised or, if it did, the consequences of it having done so, did not arise in that context. However, there was nothing to prevent the Defendant from deploying the same point in support of a submission that service of a copy of the claim form was an unlawful act which the court should not condone by exercising its discretion to cure the irregularity in its service.
- For these reasons I do not consider that this is an application that the court should entertain. However, in case I am wrong about this, I will consider the question of whether the point is reasonably arguable.
- What is described in the Legal Services Act 2007 as a “reserved legal activity” (at section 12) can only be carried out by a person authorised to do so, which Quigg Golden was not. The conduct of litigation is a reserved legal activity. By Schedule 2 of the Act the conduct of litigation is defined to mean:
“(a) the issuing of proceedings before any court in England and Wales,
(b) the commencement, prosecution and defence of such proceedings, and
(c) the performance of any ancillary functions in relation to such proceedings (such as entering appearances to actions).”
- In André Agassi v Robinson  EWCA Civ 1507, a decision under the Solicitors Act 1974, in which the definition of the conduct of litigation was the same as it is under the Legal Services Act 2007, Dyson LJ, giving the judgment of the court, said, at :
“The word ‘ancillary’ indicates that it is not all functions in relation to proceedings that are comprised in the ‘right to conduct litigation’. The usual meaning of ‘ancillary’ is ‘subordinate’. A clue to what was intended lies in the words in brackets ‘(such as entering appearances to actions)’. These words show that it must been intended that the ancillary functions would be formal steps required in the conduct of litigation. These would include drawing or preparing instruments within the meaning of section 22 of the 1974 Act and other formal steps. It is not necessary for the purposes of this case to decide the precise parameters of the definition of ‘the right to conduct litigation’. It is unfortunate that this important definition is so unclear. But because there are potential penal implications, its very obscurity means that the words should be construed narrowly. Suffice it to say that we do not see how the giving of legal advice in connection with court proceedings can come within the definition. In our view, even if, as the law society submits, correspondence with the opposing party is in a general sense ‘an integral part of the conduct of litigation’, that does not make it an ‘ancillary function’ for the purposes of section 28.”
In the light of these observations I see no reason to construe the definition of the conduct of litigation as extending to any activities that take place prior to the issue of proceedings and which do not involve any contact with the court. For example, advising on the merits of starting proceedings or drafting Particulars of Claim.
- It is to my mind reasonably clear that Quigg Golden’s letter to the court of 31 October 2014 enclosing three copies of the claim form and Particulars of Claim for sealing and issue was an act involving the conduct of litigation. However, in the light of the observations by Dyson LJ in the passage quoted above I can see nothing unlawful about Quigg Golden’s letter to the Defendant of 31 October 2014 in which it enclosed copies of the claim form and Particulars of Claim which had been sent to the court.
- I think that the matter can be tested in this way. Suppose that an employer and contractor who are parties to a construction contract had been involved in an adjudication. Suppose further that the contractor was represented by a firm of claims consultants who were not authorised to conduct litigation. Following an award in favour of the contractor which is not satisfied, the contractor is advised to start legal proceedings and to seek summary judgment to enforce the adjudicator’s decision. Solicitors are then instructed to draft and issue proceedings. Simultaneously with the solicitors sending the claim form and Particulars of Claim to the court for issue the consultants send a copy of the same documents to the employer for information. It seems to me that there would be nothing unlawful about that.
- In this case Quigg Golden, having eventually received the issued claim form from the court, served it on the Defendant. I am prepared to assume that that constituted an act that it was not authorised to do and which was therefore unlawful. However, it is not the service of the issued claim form that was regularised by my judgment. I held that the service of the draft claim form – that is to say a copy of the claim form that had been sent to the court – on the Defendant under cover of Quigg Golden’s letter of 31 October 2014 constituted service under the Regulations, albeit service that was irregular because the claim form enclosed with the letter had not been issued.
- In the Defendant’s further submissions on the status of Quigg Golden, the following submission was made:
“If it were to order that defective service be remedied, the Court would be granting an indulgence in respect of an unlawful act (since the ‘service’ of the unissued claim form was part and parcel of the unauthorised conduct of litigation by Mr. Parker, which is a criminal offence under s 14 of the Legal Services Act 2007). This must be an important factor which militates against the exercise of discretion in favour of the Claimant. Indeed, the Defendant submits that it would be quite wrong for the Court to intervene to remedy Mr. Parker’s conduct in this manner.”
- If I considered that it was reasonably arguable that sending the unissued claim form to the Defendant was part and parcel of the conduct of litigation by Quigg Golden, I could see the force of this submission. However, for the reasons that I have given I do not consider that Quigg Golden did act unlawfully, or even improperly, in sending the Defendant a copy of the claim form that it had sent to the court for issue.
- For these reasons I do not consider that it is reasonably arguable that in sending a copy of the unissued claim form to the Defendant Quigg Golden acted in a manner that was unlawful. Even if it were to be suggested that this was in some way tainted by illegality (because the act of issuing the claim form was clearly unlawful) such as to affect the way in which the court should exercise its discretion, I would not accept that submission either.
- At the time when I prepared the judgment I was well aware of the suggestion that Quigg Golden was not authorised to conduct litigation. I was also aware of the fact that Quigg Golden had been evasive in that it had not replied to the questions raised in correspondence about its status, which tended to suggest that the Defendant’s assertion was correct. Of course, by the time the judgment came to be handed down I had been made aware that Quigg Golden was not authorised to conduct litigation. I have to confess that it did not occur to me that, on the facts of this case, this might be relevant to the exercise of the court’s discretion to cure the irregularity in relation to the service of the unissued claim form.
- For these reasons, therefore, I do not consider that it would be appropriate or in accordance with the guidance in the authorities for me to direct that there should be a further hearing to determine this application. In fact, I am not sure that the Defendant was even asking for this: as I read its Note dated 20 March 2015 the Defendant was asking the court to revisit the matter in the light of the submissions made in that note. Whilst I cannot exclude the possibility that the persuasive advocacy of Mr. Coppel might cause me to reconsider my decision, I do not consider that the possibility of this is sufficiently real for it to be justifiable for there to be any further hearing.
- At paragraph 75 of the Judgment I noted that, since Quigg Golden had not served the claim form in accordance with the rules of court, the Claimant would have had to make an application in any event in order to cure the irregularity. The costs of that application would be costs that in the ordinary course of events the Claimant would have to pay. In those circumstances I gave a provisional indication that the appropriate order for costs might be that there should be no order for costs. Whilst that was an approach that initially found favour with the Defendant, it was not a suggestion that appealed to the Claimant.
- Ms. Hannaford has submitted that since the Claimant was successful it should have its costs or, alternatively, a proportion of its costs to reflect the court’s view that the Claimant would have had to have made an application in any event in order to cure the irregularity. Failing that, her final position was that there should be no order for costs.
- However, as I have already mentioned, in its submissions of 19 March 2015 the Claimant changed tack and stated that, in the light of what Ms. Hannaford described as “… the potential complexity of the issues in relation to Quigg Golden’s fees”, it only intended to pursue a claim for costs in relation to counsel’s fees.
- The amount claimed in respect of the counsel’s fees was £12,200 for Ms. Hannaford and £1,181.25 for a junior who was originally instructed but subsequently replaced by Ms. Hannaford.
- In its note for the hearing the Claimant resisted the Defendant’s application to strike out the claim on two grounds. First, that the court should extend the time for service of the claim form in the exercise of its discretion. Second, that if the Regulations did not permit the exercise of such discretion, they were not compliant with the principles of equivalence and/or effectiveness. In a post-hearing exchange of submissions Ms. Hannaford quite properly abandoned the second ground in the light of an authority produced by Mr. Coppel. As I have indicated in paragraph 21 above, the ground on which the Claimant originally succeeded was one suggested in the course of argument and adopted by Ms. Hannaford.
- In my view, the appropriate order for costs is that the Claimant should have 50% of its costs of the application that it is claiming, namely counsel’s fees, less an amount to reflect the cost of making an application to cure the irregularity that it would have had to make in any event. In the circumstances, I consider that this should be limited to the fees of Ms. Hannaford. Insofar as the application to cure the irregularity is concerned, I consider that Quigg Golden would have charged at least £3,000 to prepare the application (for this purpose it is irrelevant that these fees would not have been lawfully charged, because there is no indication that the Claimant would not have paid them), which junior counsel would then have had to make. I would allow £1,250 in respect of the fees of the latter. Thus the Claimant would have incurred £4,250 by way of costs in order to make an application to cure the irregularity. This produces a balance of £1,850. That sum is to be paid within seven days of the formal handing down of this judgment.
Permission to appeal
- The Defendant relies on its new point in relation to the exercise of discretion as a ground of appeal. In its submissions following the issue of the judgment in draft, it sought permission to appeal on the ground that the court had not addressed its argument based on Cranfield v Bridgegrove. That is now been addressed in the judgment as handed down.
- Since I have rejected the Defendant’s new point as being not reasonably arguable, I consider that it must follow that an appeal on the same ground would have no real prospect of success. Accordingly, I refuse permission to appeal. However, I will extend the time for lodging a notice of appeal so that it does not begin to run until this judgment is formally handed down.