CAN A STRUCK OUT CLAIMANT ISSUE AGAIN? EXERCISE OF THE SECTION 33 DISCRETION AFTER A FIRST ACTION HAS BEEN DISMISSED.

December 11, 2013 · by · in Avoiding negligence claims, Limitation, Service of the claim form, Striking out

One of the “open” questions following the Mitchell decision is whether a claimant refused relief from sanctions can issue again. That is an open question (which will be considered at another time).  Here we look at the court’s approach to the Section 33 discretion when a first action has failed for technical reasons set out in the recent Court of Appeal decision in Davidson –v- Aegis Defences Services [2013] EWCA Civ 1586.

 THE FACTS OF DAVIDSON

Mr Davidson’s initial action for personal injury had been dismissed because his original solicitors served a photocopy of the claim form on the Defendant rather than the original.  His applications for extensions of time for service were dismissed and he instructed new solicitors who issued a second action. That action was out of time and it was necessary for the claimant to make an application under Section 33 of the Limitation Act 1980.

THE SECTION 33 APPLICATION

The claimant’s section 33 application was dismissed by the Deputy High Court Judge. He held that there was a general principle that it should not be easy for a claimant, who had failed to issue proceedings in time, to commence a second action and obtain a disapplication of the limitation period under section 33, citing observations by Waller LJ in McDonnell –v- Walker [2009] EWCA Civ 1257.

THE JUDGMENT IN THE COURT OF APPEAL

The Court said that the starting point that will be of most use to first instance judges who are asked to disapply the three year time limit in personal injury cases will be the observations of Smith L.J. in Cain –v- Francis  [2009] 3 WLR 551.

“It seems to me that in the exercise of the discretion the basic question to be asked is whether it is fair and just in all the circumstances to expect the defendant to meet this claim on the merits, notwithstanding the delay in commencement. The length of the delay will be important not so much for itself as to the effect it has had. To what extent has the defendant been disadvantaged in his investigation of the claim and/or the assembly of evidence in respect of the issues of both liability and quantum? But it will also be important to consider the reasons for the delay. Thus there may be some unfairness to the defendant due to the delay in issue, but the delay may have arisen for so excusable a reason that, looking at the matter in the round, on balance it is fair and just that the action should proceed. On the other hand, the balance may go in the opposite direction, partly because the delay has caused procedural disadvantage and unfairness to the defendant and partly because of the reasons for the delay or its length are not good ones.

Although the delay referred to in 33(3) is the delay after the expiry of the primary limitation period, it will always be relevant to consider when the defendant knew that a claim was to be made against him and also the opportunities he has had to investigate the claim and to collect evidence (see Donovan v Gwentoys). If, as here, a defendant has had early notification of a claim and every possible opportunity to investigate and to collect evidence, some delay after the expiry of three years will have had no prejudicial effect.”

THE RELEVANCE OF AN ACTION AGAINST THE FIRST SOLICITOR

The court held that the existence of a potential action against the first solicitor was not determinative.

“12.     Ms Mulcahy accepted that the existence of such a claim was relevant but submitted it was not determinative. Mr Wilkinson QC did not say it was determinative but according to Ms Mulcahy he was wrong to say that the claim against the former solicitors was “unanswerable” and wrong to say that the prejudice in having to pursue that claim was “slight” by comparison to the prejudice confronting the defendants. To the extent that this is an argument about weight, that was for the judge and is not for this court. To the extent that it is more than an argument about weight, Ms Mulcahy submitted that the judge failed to take into account that any claim against the solicitors would have to be confined to a loss of the chance of success against Aegis (and thus inevitably of less value to Mr Davidson) and would be in Rix LJ’s words in paragraph 96 of Aktas “a generally unsatisfactory way of litigating the claimant’s claim” doing “little or nothing for the court’s limited resources”.

  1. But it is apparent from paragraph 8 of the judgment that Mr Wilkinson was fully aware that the claim against the solicitors would have to be based on a loss of the chance of success in the original proceedings. The process of evaluating a personal injury claim is a common place for personal injury lawyers; even if Mr Davidson’s claim against Aegis proceeded, his advisers would continuously be evaluating his chance of success. No one pretends that litigation against a claimant’s former solicitors is other than second best but as the authorities from Donovan v Gwentoys [1990] 1 W.L.R. 472 onwards show it is something which a judge can (and usually should) take into account as best as he or she can.”

PREJUDICE TO THE DEFENDANT

The defendant was showed that it had been prejudiced by the post-limitation period delay in that documents which could have been important had been stolen.  The first instance judge considered that delay not only in relation to the loss of the documents but “also to the well-known fact that memories become less and less reliable, the staler an action becomes.”

THE COURT OF APPEAL DECISION: SECTION 33 APPLICATION NOT ALLOWED: FIRST INSTANCE JUDGE WAS RIGHT

The Court of Appeal upheld the decision of the Deputy High Court  Judge in refusing the Section 33 application.

LESSONS THAT FLOW

  •  The Court of Appeal reiterated the importance of the principles in Cain.  However it is clear that, in a section 33 application made after a first action has failed for technical reasons, the existence of that action is a relevant factor.
  • Difficult decisions will have to be made by litigators who take up actions which have been struck out or failed for technical reasons. Generally it is prudent only to make a section 33 application if the initial solicitors (most often the indemnity insurers for the original solicitors) agree to indemnify the claimant against costs.
  • It is notable that the Court did not consider it an abuse for a claimant to issue again in these circumstances. It merely highlighted the additional difficulties that such a claimant may encounter.

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