ACTION SHOULD NOT HAVE BEEN STRUCK OUT: DENTON PRINCIPLES NOT ENGAGED IN FAILING TO SERVE PARTICULARS OF CLAIM AND MEDICAL REPORT

In the judgment today in  Mark v Universal Coatings & Services Ltd & Anor [2018] EWHC 3206 (QB) Mr Justice Martin Spencer allowed an appeal against an action being struck out.  The case has many procedural complexities.  Here we look at the  question of whether there is a “sanction” for failing to serve the particulars of claim and medical report timeously.  The judge, on appeal, held that there was no express sanction and that striking out this action for an abuse of process was disproportional.

 “I cannot refrain from remarking that it is utterly tragic that, for a Claimant with such a foreshortened life expectancy, it has taken just a few days short of two years for the appeal to come on for hearing before me from the time it was heard in the court below. I cast no blame for this, but I sincerely hope that the parties will be able to agree a timetable for the future conduct of this case which will enable it to be resolved as expeditiously as possible and, in any event, whilst the Claimant remains able to see the outcome of the litigation.”

THE CASE

The claimant issued a claim for personal injury damages against three defendants. After issue his solicitors obtained an extension of time.  Upon proceedings being served one of the defendants (the third defendant) was the only defendant to acknowledge service stating that it intended to contest jurisdiction.   The defendants applied to strike out the proceedings. The third defendant succeeded on the grounds that the extension of time for serving the claim form should never have been granted.   The first and second defendants had not ticked the relevant box and/or filed defences, they were unable to take the jurisdictional point.  However the circuit judge struck out the claim against the first and second defendants on the grounds that the claimant had not filed particulars and a medical report within the time allowed by the rules.

THE CLAIMANT’S SUCCESSFUL APPEAL

The claimant did not appeal against the decision in relation to the third defendant. However the claimant did appeal against the striking out of the action against the first and second defendants.

THE JUDGMENT ON APPEAL
    1. The first question that arises for decision is whether the learned Judge was correct in holding that where, in breach of the provisions of 16 PD.4, a claimant fails to serve a medical report and schedule of loss with the Particulars of Claim, they are thereby in breach such as to require relief against sanction so that the principles arising under Mitchell/Denton are engaged.
    2. At first blush, this is a surprising contention. Frequently, particularly in complicated personal injury or clinical negligence litigation, the focus is on difficult questions of causation which may or may not resolve the matter. Often, at a relatively early stage, a medical report and schedule of loss served with the Particulars of Claim are simply uninformative. Thus, the medical report, which the practice direction requires should be “about the personal injuries which he alleges in his claim” is no more than a relatively anodyne and brief recitation of the claimant’s condition and, so far as known, prognosis. So far as the schedule of past and future expenses and losses claimed is concerned, this frequently contains no more than outline heads of loss with “TBA” (to be advised) or “TBC” (to be confirmed or to be calculated) inserted. Although it may be possible to set out some of the special damages, such a schedule says nothing about the true value of the case when the heads of future loss cannot be determined until the case in relation to causation is fully explored and known. In such cases, the court, as part of its case management powers, will lay down a timetable for the service and exchange of properly drawn medical evidence and schedules of loss further on into the litigation. In such cases, an alternative to serving an anodyne and relatively uninformative schedule of loss and medical report with the Particulars of Claim is to do what was done in the present case and state in the covering letter when the Particulars of Claim are served that these will follow and then leave it to the court to case manage the claim and make provision for service of these documents in due course. In such cases, it is always open to the defendant to ask the court to require the claimant to serve a schedule and medical report if the defendant so desires but, in the more complicated cases, there is no point because the document which will be served, although strictly compliant with the rules, will often take the matter no further forward at that stage. By contrast, in a simple personal injury action such as a road traffic accident claim, there will usually be no difficulty at all in serving a medical report and schedule of loss with the Particulars of Claim and this is the norm in such cases. That then enables the defendant to take a view about the merits and value of the case at an early stage and make an offer of settlement, if so advised, with a consequent saving of costs. It seems to me that 16 PD.4 sets a benchmark because it is a practice direction which covers all personal injury claims from the most simple to the most complicated but which, in many of the more complicated cases, is honoured more in the breach than in the observance where the parties sensibly recognise the limitations of what can be achieved at the early stage of service of the Particulars of Claim. Thus, a defendant’s advisors will often agree that service of a medical report and schedule of loss at that stage is pointless. However, as I have stated, the defendant always has the option of recourse to the court. The point is that most practitioners would, I strongly suspect, be surprised at the suggestion that the Mitchell/Denton regime for relief from sanction applies to the obligation to serve a medical report and schedule of loss with the Particulars of Claim, with all the hurdles which need to be surmounted within those principles.
    3. Nevertheless, it is necessary to consider whether, in law, the Defendants’ submission in this case, and the ruling by the learned Judge, to the effect that a claimant who has failed to serve a medical report and/or schedule of loss with his Particulars of Claim, is in need of relief from sanction, is or is not correct.
    4. The starting point is CPR 3.9 which for convenience I set out again:
“1) On an application for relief from any sanction imposed for any failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application including the need –

a) For litigation to be conducted efficiently and at proportionate cost;

b) To enforce compliance with rules, practice directions and orders.

2) An application for relief must be supported by evidence.”

It is to be noted that this provision refers to “any sanction imposed for a failure to comply …”. Often such a sanction is imposed by the order of the court. Thus, if the court orders something to be done within a certain period of time and lays down a sanction if that is not done, then a defaulting party needs to apply for relief from sanction. Alternatively, the rule or practice direction may itself contain a sanction. An example is CPR 3.7 A1, a rule which provides sanctions for non-payment of the trial fee by the claimant. Part of that rule states that if the claimant has had notice to pay the trial fee and has not applied to have the trial fee remitted in whole or in part and the trial fee has not been paid on or before the trial fee payment date, then the claim will automatically be struck-out without further order of the court and the claimant will be liable for the costs which the defendant has incurred.
    1. There are, however, some rules or practice directions which, without themselves expressly laying down a sanction for non-compliance, carry with them an implied sanction by reference to the consequences of the rule not having been observed. Two examples are those referred to in paragraph 45 above: the failure of a respondent who wishes to resist an appeal on grounds other than those relied on in the court below to serve a Respondent’s Notice (Altomart); and a litigant who wishes to appeal from a court order or judgment but fails to serve and file a notice of appeal in time (Sayers v Clarke Walker).
In my judgment, the principle behind the reason why those rules carry with them an implied need to apply for relief from sanction when breached can be discerned by reference to the default position if the application is refused. In the case of a litigant who fails to serve and file a notice of appeal in time, without an extension of time the litigant is unable to appeal as any notice of appeal would be invalid as having been served out of time and the judgment in the court below will stand. This is so significant for the purposes of the litigation that the need to apply for relief from sanction is implied. Similarly, as explained by Moore-Bick LJ in Altomart, the failure to serve a respondent’s notice means that, without permission to do so, the respondent is fixed with relying on the grounds relied on below and may not argue that the judgment below should be upheld for different reasons. This may so significantly confine the scope of the appeal as to be highly significant for the purposes of the litigation and has therefore also been held to require relief from sanction although, as it seems to me, this is much closer to the line than the failure to serve a notice of appeal in time considered in the Sayers’ case.
    1. However, in my judgment the failure to serve a medical report and/or a schedule of loss with the Particulars of Claim is not in the same category, for the reasons which I have endeavoured to set out in paragraph 49 above. Often, within the context of the particular litigation, this will be a trivial breach because compliance can be achieved with the service of documents which, in the end, are relatively uninformative and do not take the matter any further. This comes back to the wide range of personal injury litigation and the significant difference between, at one end of the scale, a simple running-down action and, at the other end of the scale, a complicated clinical negligence action or, as here, personal injury action. It seems to me that the provisions of 16 PD.4 are in reality intended to be directed towards the former, rather than the latter. The “one size fits all” approach of the CPR leads to documents being served with the Particulars of Claim in complex cases which, in reality, are unhelpful and uninformative. In my judgment, 16 PD.4 is not in the category of the kind of rule or practice direction to which the implied relief from sanction doctrine should be applied and, with the greatest respect to HHJ Gargan, I disagree with him in this regard.
    2. In his submissions, Mr Limb referred to the wording of 16 PD.4 and the use of the word “must” indicating that it is a mandatory provision. Whilst this is true, I would observe that this is a characteristic of the drafting of the CPR and the word “must” is used liberally. However, to imply the need to apply for relief from sanction in all cases where a rule or practice direction contains such wording would, as Mr Walker submitted, result in the courts being inundated with applications quite unnecessarily.
Abuse of process
    1. The application to strike out the claim for abuse of process is, as already observed, in a different category to the application in relation to relief from sanction because in relation to the latter, the proportionality of the sanction is not considered in the same way. To strike out for abuse of process has rightly been described as a draconian measure and it has been recognised over the years since the CPR came into force that there will often be alternative ways of dealing with a case justly without taking such a step. Thus, in Biguzzi v Rank Leisure plc [1999] 1 WLR 1926, Lord Woolf said (at page 1933):
“Under rule 3.4(c) a judge has an unqualified discretion to strike out a case such as this where there has been a failure to comply with a rule. The fact that a judge has that power does not mean that in applying the overriding objectives the initial approach will be to strike out the statement of case. The advantage of the CPR over the previous rules is that the court’s powers are much broader than they were. In many cases there will be alternatives which enable a case to be dealt with justly without taking the draconian step of striking the case out.”
Similarly, in Marstons plc v Charman [2009] EWCA Civ 719, Rix LJ said at para. 21:
“… the well-known case of Biguzzi v Rank Leisure plc, almost the first and perhaps, in its way, to this day the leading case in this court from the judgment of Lord Woolf, the Master of the Rolls himself, on the case management powers of the then new CPR. The essence of the decision in that case was that, while it had to be recognised that under the CPR delays in complying with court orders would not be tolerated in the leisurely way in which they had perhaps been tolerated under the Rules of the Supreme Court, nevertheless courts exercising their new case management powers were not to abuse those powers by going to the extreme of striking out a case for delay in compliance with court orders when a more proportionate use of the much more flexible powers granted under the CPR would be more attuned to the problems in question in a particular.”
  1. In the present case, it seems to me that the fact, as the learned Judge found, that the court had been deliberately or, at best, recklessly misled by the Claimant’s solicitor into granting the initial extension of the time for service of the Claim Form, played a significant part in the decision below. However, in my judgment Mr Walker is right to contend that there were other potential explanations for the discrepancy between the statement of Ms Butler and the statement of Mr Taylor which the learned Judge could have considered. In particular, Mr Taylor’s statement raised question marks because he referred to a review taking place following the transfer of the case to Neumans in October 2015 (see paragraph 28 above). However, Mr Taylor did not take over the conduct of the case until April 2016 and until then, conduct of the case remained with Ms Butler. Thus, there was no significant “regime change” in October 2015 and it seems to me that there is no proper basis upon which the court could find that it had been misled by Ms Butler, and certainly not without the matter being further investigated and the court hearing oral evidence about it.
  2. Without the court having been misled into granting the initial extension of time for service of the Claim Form, it seems to me that the other complaints and breaches of the rules, without condoning them or suggesting that they were in any way excusable, did not, whether individually or collectively, amount to the kind of abuse of process which justifies a claim being struck out. There were, in my judgment, other and more proportionate steps which the court could have taken including the making of Unless orders and penalisation in costs. In the context of a significant personal injury claim, in my judgment to strike out a case was not a proportionate response and in this regard I prefer the submissions of Mr Walker to those of Mr Limb.
  3. For the above reasons, the appeal will be allowed and the case will be reinstated.
    1. Before leaving this case, I cannot refrain from remarking that it is utterly tragic that, for a Claimant with such a foreshortened life expectancy, it has taken just a few days short of two years for the appeal to come on for hearing before me from the time it was heard in the court below. I cast no blame for this, but I sincerely hope that the parties will be able to agree a timetable for the future conduct of this case which will enable it to be resolved as expeditiously as possible and, in any event, whilst the Claimant remains able to see the outcome of the litigation.