SERVICE ON A NOMINATED SOLICITOR: BE CLEAR WHO YOU REPRESENT: “A THOROUGHLY TECHNICAL POINT”, UNATTRACTIVE, MISCONCEIVED AND “REFLECTS NO CREDIT ON THE INSURERS OR THEIR ADVISERS”
Earlier this week Master McCloud commented upon “a dry and unlovely crop of procedural service issues” in the Masters’ Corridor. These issues may well follow the Masters around. Master Davison sits as a Recorder. In that capacity he decided an appeal upon service points in Batt -v- English [Winchester County Court 3rd March 2017 transcript available here Battappeal.].( I appeared for the claimant at the appeal stage. I have only recently received the transcript and the reasons for a second appeal being refused.)
The claimant was injured in a road traffic accident. Prior to issue there had been extensive correspondence with the defendant’s solicitors. The defendant’s solicitors referred to their client as “Mr English” throughout the correspondence. In a letter confirming instructions to accept service they referred to their client as Mr English and stated “We are instructed to accept service of proceedings on behalf of Aviva Insurance Limited”. Proceedings were issued against Mr English and served on the solicitors. The solicitors then asserted that they had no instructions to act on behalf of Mr English and were only instructed to accept service on behalf of Aviva. That argument succeeded before a Deputy District Judge and the claim was struck out. The claimant appealed. Recorder Davidson heard the appeal.
The Recorder reviewed the correspondence.
- On 30th October 2013 DAC wrote to the claimant’s then solicitors as follows, and it is important that I read out in full both the heading and the first paragraph of that letter:
Our Client Lee· English- Your Client Mr Nicholas James Batt Date a/Incident: 15 January 2013
We are instructed by Aviva Insurance Limited to act on behalf of the defendant.”
Throughout the correspondence which followed DAC consistently referred to their client as being Mr English.
- By letter dated 6th May 2015 they wrote in these terms, and, again, it is important that I read out the whole of the letter:
Out Client Lee English – Your Client Mr Nicholas James Batt Date Incident: 15 January 2013
We refer to the above matter. Liability for the accident is disputed and your client is put to proof as to how this accident occurred
We are instructed to accept service of proceedings on behalf of Aviva Insurance Limited Please quote the above reference.
THE DEFENDANT’S APPLICATION
The defendant made an application.
“The claimant’s claim be struck out because the claim form and particular of claim were not correctly served pursuant to CPR 6.7 in that the claimant was not in receipt of the written notification that DAC Beachcroft Claims Limited were instructed to accept service of proceedings on behalf of Mr Lee English”.
That application succeeded before the Deputy District Judge. The claim was struck out.
THE RECORDER’S JUDGMENT
“11. I will say that my first impression was that the outcome of the applications is a little surprising. The defence of the claim was, and is, because the claimant has since commenced separate proceedings in the High Court, being conducted by the insurers, they were served with it within the limitation period allowed, albeit just. There is no prejudice to them arising out of the events I have described, but the claim has been struck out. On the face of it, that seems odd.
12. Nevertheless, it was incumbent on the claimant to demonstrate that the decision of the deputy district judge was wrong, and, accordingly, my starting point is the relevant provisions of the Rules. Rule 6.7(1) is in these terms:
“6.7-(1) solicitor within the jurisdiction: subject to Rule 6.5(1), where
– (b) a solicitor acting for the defendant has notified the claimant in writing that the solicitor is instructed by the defendant to accept service of the claim form on behalf of the defendant at a business address within the jurisdiction the claim form must be served at the business address of that solicitor.”
I note that the wording of the Rule is mandatory.”
The Recorder did not accept the claimant’s arguments in relation to the application not being properly made under Part 11 or that there should be an order under CPR. The Recorder allowed the appeal in relation to the issue of whether service on the solicitor was good service.
THE FINDING THAT SERVICE ON THE NOMINATED SOLICITORS
“17. Was service on DAC good service? This is the main issue on the appeal. It is well established that a solicitor who is acting for a client has no general or implied authority to accept service of a claim form. That is clear from the decision of the Court of Appeal in Maggs  EWCA Civ 20, and also the decision in Smith v Probyn [20001 WL 191146.
18.The issue here is not whether DAC had implied authority but whether DAC’s statement in their letter of 61 May 2015 that they were instructed to accept service on behalf of Aviva meant that they were so instructed as regards the defendant. The issue was framed in this way in the skeleton argument of Mr Banks-Jones, who has appeared for the respondent on the appeal:
“Was it reasonable to infer that DAC were also instructed to accept service of proceedings on behalf of Mr English?”
19. The deputy district judge dealt with this in the following way, and I quote the material patis of paragraph 6 and 10 of her judgment:
“Insurance law is highly complex, and I do not pretend to understand its intricacies, but I do know that insurers and insured are different entities. I accept that there are often joint retainers in relation to instructions that are given to solicitors, and I accept that, ultimately, many claims are subrogated ones, but that does not depart from the fundamental rule that they are separate entities that have, at times,both different perspectives and can part company at any point during litigation. To that extent, they are never, and should never, be considered to be one and the “
20. The difficulty is that the context here is that DAC Beachcroft indicated that they did act for the defendant. They did not disguise that. They did not hide it. What they did clearly say was that that they had instructions ultimately to accept service on behalf of behalf of Aviva. On reading that, solicitors who were involved in litigation that involved insurers and insured should have been alerted to the fact that there might be an issue, therefore, between the insurers and the insured because it did not say that they had also instructions to accept service on behalf of Mr English.
21. The deputy district judge was saying that the insurer and the insured are separate legal entities, and therefore to have instructions to accept service on behalf of the insurer meant, on behalf of that legal entity, and that legal entity alone. To my mind, this was a clear error. As the deputy district judge point out, an insurer is usually subrogated to the defence of a claim against the insured. Subrogation, of course, means the substitution of one party for another. This insurer was, indeed, exercising rights of subrogation.
I quote from paragraph 5 of the witness statement of Jasminka O’Hara, a partner at DAC, dated 2nd June 2016:
“This firm confirmed that we were instructed on behalf of Aviva to act on behalf of the defendant, Mr English. This is by virtue of the right of subrogation under the motor insurance policy, and is standard matters in insurance matters. It is correct that throughout correspondence Mr English has been named as our client.”
DAC were taking their instructions from Aviva, who were subrogated to the defence of the claim. It has not been suggested that there were any aspects of that defence that Aviva were not entitled to conduct. In particular, there is no evidence at all that Aviva required specific instructions from their insured to be able to accept service of proceedings for him, and why, I ask rhetorically, would they? Any such restriction would be highly
Thus, whilst there will be cases where insured and insurer are acting separately, this was not one of them, and taken in context the statement in the letter of 6th May 2015, that DAC had instructions to accept service on behalf of Aviva, plainly meant Aviva “standing in the shoes of” the defendant.
So as to be clear as to the context of the 6th May 2015 letter, I mention these four matters:
DAC’s letter of 30th October 2013 and all subsequent letters said that the defendant was their client, and that they were taking their instructions from Aviva on his behalf;
Aviva were never referred to as DAC’s client prior to service of the claim form;
Leicester Aldridge and Richard Griffiths & Co never threatened a claim against Aviva as opposed or in addition to the defendant, and so no question of having to serve Aviva in their own right ever arose;
Contrary to the statement in paragraph 5 of the skeleton deployed by Mr Banks-Jones before the deputy district judge, DAC never said that they had no instructions to accept service on behalf of the defendant.
I am quite sure that Mr Banks-Jones had no intention to mislead the deputy district judge; nevertheless, that incorrect statement was contained in his skeleton.
The correct construction of the 6th May 2015 letter is not that DAC were instructed to accept service on behalf of the defendant as well as Aviva. The correct instruction is that they were instructed to accept service on behalf of the defendant because it was exclusively in their capacity as subrogated to the defence of the claim that Aviva were ostensibly acting. I say ostensibly, because whatever may have been happening behind the scenes between Aviva and their insured is, so faT as CPR 6.7(1)(b) is concerned, simply irrelevant. It follows that that Rule was engaged, and service on DAC was both mandatory and good”
THE ATTEMPTED APPEAL
The Defendant sought permission to appeal. Lord Justice Underhill refused permission in a fairly robust manner.
This is a second appeal. Neither the grounds nor the skeleton argument address the question whether the criteria under CPR 52.7 (a) (ii) or (b) are satisfied. I have nevertheless considered the question and I do not believe that they are. If the Recorder’s decision was wrong, it was a one-off error arising out of the particular circumstances of this case.
If follows that strictly I need not consider whether the appeal has a real prospect of success. But in fact I do not believe that it does. I take the grounds in turn
As to (1), it seems to me quite clear that DAC’s statement that it had instructions to accept service “on behalf of Aviva” meant on behalf of Mr English. In its previous letter it had said that it was “instructed by Aviva … to act on behalf of the defendant” (Mr English being identified in the little of the letter as “our client”); and the later letter must be read in that context. That is in any event the only way in which it would make sense: the claimant had no claim against Aviva.
As to (2), this falls away in the light of the foregoing: DAC had, properly understood, confirmed that they had authority to accept service on behalf of Mr English.
As to (3), the Recorder’s reference in para. 21 of his judgment to subrogation was completely unexceptionable. He was simply saying that the fact that Aviva was exercising its subrogated rights to run Mr English’s defence explains why the language of DAC’s letter was not in any substantial sense inconsistent with the meaning as any reasonable person would understand it. All the learning displayed in paras. 18-27 of the skeleton argument, including the reference to Lowick v Swynson, is beside the point.
As to (4). this wholly misrepresents the Recorder’s reasoning, which was as I have summarised it at para. 3 and involves no issue of principle but simply the construction of a particular letter.
In short, the Recorder, who is very experienced in procedural matters, got it right, and the only surprise is that the DJ (who seems to have acknowledged that she was something of a tyro – see para. 6 of her judgment) allowed herself to be persuaded by a thoroughly technical point which was not only unattractive but misconceived. It reflects no credit on the insurers or their advisers.”