LATE (BUT NOT VERY LATE) AMENDMENTS ALLOWED: LIMITATION DEFENCE WAS NOT “MUCKING AROUND AT THE LAST MOMENT”

August 11, 2017 · by · in Amendment, Civil Procedure, Limitation, Statements of Case

In Vilca & Ors v XSTRATA Ltd & Anor [2017] EWHC 2096 (QB) Mr Justice Stuart Smith allowed a late, but not “very late” application by the defendant to allow it to plead limitation.

“To my mind…  all of the modern authorities can best be seen as applications of the principles inherent in the Overriding Objective. Put another way, it is essential for the Court to bear in mind the principles inherent in the Overriding Objective when attempting to strike a fair balance as mandated by prior authority.”

THE CASE

The claimants were bringing actions against the defendants based on alleged assaults by public and private security forces in Peru in 2012.  Two of the claims were fatal claims. The proceedings were issued in 2013 and 2014.  In April 2015 the particulars of claim were amended to plead a case, in the alternative, based on Peruvian law. The trial is listed to start on 23 – 27 October 2017 and will last much of the rest of the year.

In July 2017 the defendants amended their defence to plead limitation – that the limitation period in Peruvian law is two years and a claim was not made under Peruvian law within the two year limitation period. There was no real explanation why the defendant had not considered this issue of limitation previously.

THE JUDGE’S CONSIDERATION OF THE PRINCIPLES TO BE APPLIED IN RELATION TO AMENDMENT

    1. There is considerable agreement about the applicable principles, with each side pressing nuances that are to be found in the authorities and may be favourable to that side’s position. Both sides acknowledge that the Court’s approach to allowing amendments has changed since the introduction of the CPR. That is not in doubt and should barely need to be stated. Equally, both sides recognise that the circumstances in which amendments may be put forward are infinitely variable and that each contested application for permission to amend will require an exercise of the Court’s discretion that takes into account the particular facts of the case in hand. There are many authorities directly on the issue of amending before or during trial. To the extent that they provide statements of principle, they are useful for those who come after; and I shall refer to those that were cited to me that appear most useful for that reason. Otherwise, previous decisions are essentially illustrations of exercises of the Court’s discretion in different circumstances that may be illustrative but are otherwise seldom compelling. In addition to citation of authorities relating to amendment before or during trial, I was referred to authorities concerning the principles to be applied when considering relief from sanctions under CPR 3.9 (Denton and others v TH White Ltd [2014] EWCA Civ 906; Mitchell v News Group Newspapers Ltd (Practice Note) [2013] EWCA Civ 1537) and when seeking to amend to plead a new case on appeal (Crane v Sky In-home Limited and another [2008] EWCA Civ 978). Apart from general observations to the effect that the procedural landscape has changed with the introduction of the CPR, I do not find it helpful to add these decisions, which address significantly different circumstances, to an already over-crowded field of more directly relevant authority.
    2. Both sides referred to Swain-Mason and others v Mills & Reeve LLP [2011] EWCA Civ 14, [2011] 1 WLR 2735 as an authoritative starting point. I agree. The issue arose in Swain-Mason when the Claimant applied to amend to introduce what the trial judge described as “a completely new case” on the first day of a trial that had already been adjourned once: see [18]-[23], [28]. In reversing the trial judge’s decision to allow the amendment, Lloyd LJ (with whom Elias and Patten LJJ agreed) said at [72]:
“… it is always a question of striking a balance. I would not accept that the court in that case sought to lay down an inflexible rule that a very late amendment to plead a new case, not resulting from some late disclosure or new evidence, can only be justified on the basis that the existing case cannot succeed and the new case is the only arguable way of putting forward the claim. That would be too dogmatic an approach to a question which is always one of balancing the relevant factors. However, I do accept that the court is and should be less ready to allow a very late amendment than it used to be in former times, and that a heavy onus lies on a party seeking to make a very late amendment to justify it, as regards his own position, that of the other parties to the litigation, and that of other litigants in other cases before the court.”
    1. The reference to “that case” and pleading a new case being justified on the basis that the existing case cannot succeed and that the new case is the only arguable way of putting forward the claim was a reference back to Worldwide Corpn Ltd v GPT Ltd [1998] EWCA Civ 1894, a case in which the Court of Appeal upheld Moore-Bick J’s refusal to allow amendments to the claim in the first week or so of trial. It is implicit in the passages I set out below that the effect of granting the amendments would have been to cause the trial to be delayed. In giving the decision of the Court in Worldwide Corpn, Waller LJ said:
“In the modern era it is more readily recognised that in truth the payment of the costs of an adjournment may well not adequately compensate someone who is desirous of being rid of a piece of litigation which has been hanging over his head for some time, and may not adequately compensate him for being totally (and we are afraid there are no better words for it) “mucked around” at the last moment. Furthermore, the courts are now much more conscious that in assessing the justice of a particular case the disruption caused to other litigants by last minute adjournments and last minute applications have also to be brought into the scales.”
And, later on:
“Where a party has had many months to consider how he wants to put his case and where it is not by virtue of some new factor appearing from some disclosure only recently made, why, one asks rhetorically, should he be entitled to cause the trial to be delayed so far as his opponent is concerned and why should he be entitled to cause inconvenience to other litigants? The only answer which can be given and which, Mr Brodie has suggested, applies in the instant case is that without the amendment a serious injustice may be done because the new case is the only way the case can be argued, and it raises the true issue between the parties which justice requires should be decided. We accept that at the end of the day a balance has to be struck. The court is concerned with doing justice, but justice to all litigants, and thus where a last minute amendment is sought with the consequences indicated, the onus will be a heavy one on the amending party to show the strength of the new case and why justice both to him, his opponent and other litigants requires him to be able to pursue it.”
    1. The consistent strands to emerge from both Worldwide Corpn and Swain-Mason include that:
i) Orders for costs may not adequately compensate the other party, particularly where that other party is “totally ‘mucked around'”;
ii) The Court is now much more conscious that in assessing the justice of a particular case the disruption caused to other litigants by last minute adjournments and last minute applications have to be brought into the scales;
iii) Accordingly, a heavy onus lies on a party seeking to make a very late amendment to justify it, as regards his own position, that of the other parties to the litigation, and that of other litigants in other cases before the Court;
iv) The significance of the amendment to a party’s position is capable of being brought into the scales, but is not of itself determinative; and
v) It is always a question of striking a balance after weighing all relevant factors.
    1. As will be seen below, the term “very late amendment” has subsequently become almost a term of art, meaning an application made when the trial date has been fixed and where permitting the amendments would cause the trial date to be lost. I shall adopt that meaning. Elsewhere it has been said that “lateness” is a relative concept. I agree, and would add that the natural elasticity of language and its use in the authorities shows that an amendment may be regarded as “late” either because it could have been brought forward earlier or because it is brought forward at a time that is liable to disrupt the efficient conduct of the proceedings or both. The infinite variety of circumstances in which amendments may be brought forward means that there is a broad spectrum of potential impacts if an amendment is allowed, which is not dependent solely on chronological timing, and which may fall anywhere between the negligible and the devastating. In this broader post-CPR approach to amendments, the Court is not limited to considering the effect on the parties and whether any potential prejudice may be satisfactorily compensated in costs, though there is no reason why those may not be relevant considerations in appropriate cases. The Court will also have regard to the impact on the administration of justice in terms of potential disruption to the case in which the amendment is brought forward and in terms of the wider interests of the Court, other litigation and other litigants.
    2. Two first instance summaries of principle are frequently referred to and were referred to by the parties on this application. In Quah Sy-Ling v Goldman Sachs International [2015] EWHC 759 (Comm), the Claimant applied three weeks before trial to amend her Particulars of Claim. The lateness of the application led to the vacation of the trial date. The Claimant’s lawyers described the proposed amendments as “very substantial” and said that they “wholly change the nature of the case.” It was conceded that the claim as currently formulated was unsustainable. The implication of allowing the amendment was that the trial date would go back by at least 9 months: see [85]. Before “striking the balance” at [94]-[95], Carr J considered the facts in detail and, at [36]-[39], referred to a number of authorities and summarised the relevant principles. At [38] she summarised them as follows:
“Drawing these authorities together, the relevant principles can be stated simply as follows:
a) whether to allow an amendment is a matter for the discretion of the court. In exercising that discretion, the overriding objective is of the greatest importance. Applications always involve the court striking a balance between injustice to the applicant if the amendment is refused, and injustice to the opposing party and other litigants in general, if the amendment is permitted;
b) where a very late application to amend is made the correct approach is not that the amendments ought, in general, to be allowed so that the real dispute between the parties can be adjudicated upon. Rather, a heavy burden lies on a party seeking a very late amendment to show the strength of the new case and why justice to him, his opponent and other court users requires him to be able to pursue it. The risk to a trial date may mean that the lateness of the application to amend will of itself cause the balance to be loaded heavily against the grant of permission;
c) a very late amendment is one made when the trial date has been fixed and where permitting the amendments would cause the trial date to be lost. Parties and the court have a legitimate expectation that trial fixtures will be kept;
d) lateness is not an absolute, but a relative concept. It depends on a review of the nature of the proposed amendment, the quality of the explanation for its timing, and a fair appreciation of the consequences in terms of work wasted and consequential work to be done;
e) gone are the days when it was sufficient for the amending party to argue that no prejudice had been suffered, save as to costs. In the modern era it is more readily recognised that the payment of costs may not be adequate compensation;
f) it is incumbent on a party seeking the indulgence of the court to be allowed to raise a late claim to provide a good explanation for the delay;
g) a much stricter view is taken nowadays of non-compliance with the Civil Procedure Rules and directions of the Court. The achievement of justice means something different now. Parties can no longer expect indulgence if they fail to comply with their procedural obligations because those obligations not only serve the purpose of ensuring that they conduct the litigation proportionately in order to ensure their own costs are kept within proportionate bounds but also the wider public interest of ensuring that other litigants can obtain justice efficiently and proportionately, and that the courts enable them to do so.“
    1. Two months later, in CIP Properties (AIPT) v Galliford Try Infrastructure Limited and others [2015] EWHC 1345 (TCC), Coulson J was confronted by extensive amendments to the Claimant’s case that left “absolutely no room for manoeuvre” in the timetable to trial when, as Coulson J concluded, it was imperative for the trial date in January 2016 to be maintained. At [14]-[18] Coulson J reviewed the many authorities that had been cited to him, and at [19] provided his summary of the relevant principles, as follows:
“In summary, therefore, I consider that the right approach to amendments is as follows:
(a) The lateness by which an amendment is produced is a relative concept (Hague Plant). An amendment is late if it could have been advanced earlier, or involves the duplication of cost and effort, or if it requires the resisting party to revisit any of the significant steps in the litigation (such as disclosure or the provision of witness statements and expert’s reports) which have been completed by the time of the amendment.
(b) An amendment can be regarded as ‘very late’ if permission to amend threatens the trial date (Swain-Mason), even if the application is made some months before the trial is due to start. Parties have a legitimate expectation that trial dates will be met and not adjourned without good reason (Brown).
(c) The history of the amendment, together with an explanation for its lateness, is a matter for the amending party and is an important factor in the necessary balancing exercise (Brown; Wani). In essence, there must be a good reason for the delay (Brown).
(d) The particularity and/or clarity of the proposed amendment then has to be considered, because different considerations may well apply to amendments which are not tightly-drawn or focused (Swain Mason; Hague Plant; Wani).
(e) The prejudice to the resisting parties if the amendments are allowed will incorporate, at one end of the spectrum, the simple fact of being ‘mucked around’ (Worldwide), to the disruption of and additional pressure on their lawyers in the run-up to trial (Bourke), and the duplication of cost and effort (Hague Plant) at the other. If allowing the amendments would necessitate the adjournment of the trial, that may be an overwhelming reason to refuse the amendments (Swain Mason).
(f) Prejudice to the amending party if the amendments are not allowed will, obviously, include its inability to advance its amended case, but that is just one factor to be considered (Swain-Mason). Moreover, if that prejudice has come about by the amending party’s own conduct, then it is a much less important element of the balancing exercise (Archlane).
  1. I respectfully agree with and endorse these summaries of principle, which are similar. Where differences of emphasis or inclusion exist they may be seen to be referable to the facts of the particular case as set out elsewhere in the respective judgments. The only possible note of discord is that I would not agree that there must be a good explanation for delay, as stated by Coulson J at [19(c)]. Coulson J cited Brown v Innovatorone PLC [2011] EWHC 3221 (Comm) in support of the proposition. In Brown Hamblen J referred to the explanation for why an amendment is made late as being likely to be one of the factors that is relevant to be taken into account in striking a fair balance; he did not suggest that the presence of an explanation was an essential prerequisite to the allowing of an amendment. Henderson J in Wani v RBS [2015] EWHC 1181 (Ch) adopted and endorsed the approach of Hamblen J in Brown. I do not read his judgment (or any other authority to which I have been referred) as laying down a more draconian rule that the absence of good explanation is fatal to the granting of an amendment. I adopt the approach that the presence or absence of an explanation which justifies the delay is one of the factors to be considered in deciding where to strike a fair balance.
  2. To my mind, and in full agreement with Carr J, all of the modern authorities can best be seen as applications of the principles inherent in the Overriding Objective. Put another way, it is essential for the Court to bear in mind the principles inherent in the Overriding Objective when attempting to strike a fair balance as mandated by prior authority.

EXERCISE OF THE AMENDMENT IN THE CURRENT CASE

    1. I start by considering whether the Defendants should be allowed to plead [109] in answer to the 2017 Amendments. I can see no reason why not. On this limited basis the pleading is not “late” in any sense of the word, as the Claimants have only just pleaded the 2017 Amendments to which [109] would be responding. As the Claimants accepted during oral submissions, the arguments they advance on the basis of delay, expense and the other forms of prejudice to which I have referred, fall away when considering the 2017 Amendments in isolation. The issue can and will readily be accommodated in the trial process as currently listed. Both experts have already addressed the issue in exchanged reports; and, subject to some refinement or alterations in position when they meet to discuss matters in issue, the issue to be decided appears to be narrow and clearly identified. In my judgment, the balance falls firmly on the side of allowing the amendment to plead Peruvian law limitation as a defence to the 2017 Amendments.
  2. In my judgment, the admission of the Peruvian law limitation amendment as a response to the 2017 Amendments affects the balance in relation to the wider question. For the reasons I have given, this is not a “very late” amendment. It is, however, a late amendment: there is no explanation and no apparent reason why the Peruvian law limitation issue could not have been raised in 2015 or at any time thereafter. That said, for the reasons I have given, it does not at present appear that the wider interests of the Court have been adversely affected; or that the need for the trial that will happen can be attributed to the failure to bring forward the limitation defence earlier. It follows that on one side of the balance is the fact of lateness and the absence of explanation, combined with the possibility (but not more) that the Court might have been persuaded (contrary to my view) that Peruvian law limitation and the applicability of English law should be tried as preliminary issues and the possibility (but not more) that, if the Court so ordered, the Claimants might lose on their primary case against the First Defendant and on Peruvian law limitation. If that double contingency were to have come to fruition then the continuation to trial since the determination of those preliminary issues (with the possibility of appeals not being forgotten) would have been wasteful and unnecessary, with some or all of the adverse consequences identified by the Claimants.
    1. On the other side of the scales, however, is the fact that the Peruvian law limitation is a real and important issue. Its importance lies in the fact that, if it is well-founded and is admitted, the Court will reach the right and just outcome that no claims under Peruvian law should have been advanced or entertained because they were barred by limitation. Conversely, if it is well-founded but the amendment is excluded (other than in relation to the 2017 Amendments) the Court will knowingly run the risk of permitting the Claimants to achieve a windfall to which they should not be entitled, which is inherently unjust. What is more, it will be seen to be a windfall to which they should not be entitled because the issue will be determined, though only by reference to the 2017 Amendments. The artificiality of such an outcome should be avoided if reasonably possible. If the limitation defence is ill-founded but the amendment is allowed, it will be rejected without adversely affecting the effectiveness or duration of the trial to any material extent. To my mind, excluding the amendment when it is not shown to have had or that it will have any adverse impact on the wider interests of the Court or that it will cause significant prejudice to the Claimants runs the risk of causing serious injustice by excluding an issue which should be before the Court and can readily be accommodated despite that lateness of the amendment. The weight to be attributed to this factor is reduced because, in the absence of any explanation, it has come about as a result of the Defendants’ own inaction, for which there is no apparent justification. It remains, however, significant.
Conclusions
  1. The application to amend by introducing [109] in response to the 2017 Amendments should be allowed.
  2. The application to amend by introducing [109] in response to the Peruvian law claims more generally is “late” but not “very late”. The lateness is unexplained. However, it raises an important issue which is conceded (for the purposes of the application) to have real prospects of success. I am satisfied (the burden being on the Defendants) that the amendment can be accommodated in the trial process without adverse effects for the efficiency of this litigation or for the wider interests of justice. I am also satisfied (the burden again being on the Defendants) that the prospect of prejudice to the Claimants if the amendment is allowed is outweighed by the prospect of injustice to the Defendants if it is excluded, even though they would have brought the injustice upon themselves for no given or apparent reason. No point has been taken on the clarity of the proposed amendment. Allowing the amendment is in the circumstances proportionate and in accordance with the Overriding Objective.
  3. The Defendants’ application to amend to plead [109] generally is therefore allowed.

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