ISSUING PROCEEDINGS A SECOND TIME: NOT AN ABUSE OF PROCESS: HALL –v- MINISTRY OF DEFENCE EXAMINED

December 27, 2013 · by · in Applications, Avoiding negligence claims, Civil Procedure, Limitation, Relief from sanctions

Can a claimant issue again if an action is struck because of a  failure to comply with the rules and? This is likely to become a question of considerable interest given the number of cases that are failing because of the stringency of the Mitchell criteria.  A recent High Court decision offers some comfort for claimants.

 HALL –v- MINISTRY OF DEFENCE [2013] EWHC 4092 (QB)

The first action

Hall was a clinical negligence action brought against the army by a former soldier. The first set of proceedings were issued in August 2010 but not served by April 2011 (the date by which the defendant had agreed to extend time for service of proceedings).  The claimant did not inform the defendant that an application had been made to extend time for service until April 2012.  Due to an oversight by the court the application had not been listed until the 30th July 2012.

The Master refused to extend time for service of the claim form and the action was struck out with an order that the claimant pay the defendant £3,000 on account of costs pending a detailed assessment.

 The second action

The claimant issued a second action in February 2013, serving the claim form in February and the Particulars of Claim in March 2013.

There was no dispute that the second action was issued outside the limitation period and that the claimant would have to make an application under section 33 of the Limitation Act 1980.

The application to strike out the second claim as an abuse of process

In Aktas –v- Adepta [2011] QB 894 the Court of Appeal considered the circumstances in which a second claim would be considered an abuse of process where a first claim failed because of a failure to serve the claim form.  It was held that a “mere” negligent failure to serve a claim form in time was not in itself an abuse of process.

However, in Aktas, the Court did state that there were circumstances in which the courts could find that the issuing of a second action was an abuse of process.

The decision of the Master

The defendant argued that the failure to serve the claim form, coupled with the failure to pay £3,000 on account of costs, amounted to an abuse of process. The Deputy Master agreed with this and struck the action out holding that the claimant had not conducted the first action promptly nor acted fairly towards the defendant.  However Mr Justice Phillips held that he had applied the wrong test:

“Even adopting a liberal interpretation of the Deputy Master’s conclusions and attempting to read them in the light of the test which both parties were inviting him to apply, it is difficult to ascertain that the right question was addressed. As far as the failure to make the payment on account is concerned, the Deputy Master did not consider whether, let alone determine, whether the breach was such that it could be described as intentional and contumelious or otherwise a wholesale disregard of the rules. In my judgment it could not amount to either. Further, the question of whether a clamant failed to act promptly and fairly towards the defendant (which may well be a matter for criticism and for sanction in appropriate cases) is significantly different to the question of whether the claimant was guilty of inordinate and inexcusable delay. It may be that the Deputy Master had the latter test in mind, but on the face of matters he considered whether the Claimant had failed to meet the high standards required of parties as regards promptness and fairness, not whether the Claimant had fallen so far below those standards so that the claim must be struck out.”

 The decision of the High Court Judge: this second action was not an abuse of process

Phillips J held that the Master had applied the incorrect test and that he was entitled to

exercise his discretion anew.

“15.     Looked at in isolation, the Second Claim is not open to serious criticism. It was commenced in December 2012, served in February 2013 and thereafter (following the service of Particulars of Claim) has been the subject of the present application and appeal. The Second Claim is plainly brought outside the limitation period, but the reasons for that delay can be subject to consideration in the context of a section 33 application in the usual way. Given that there is nothing about the Second Claim which is in itself abusive, the question must be whether the conduct of the First Claim was so wrongfully delayed that the issue of the Second Claim is in itself an abuse.

16.       The First Claim was bought within the limitation period and an application was made for an extension of time for service of the claim form within the extended period or service to which the Defendant had agreed. The Defendant’s primary complaint as to delay relates to the period from the issue of the application to the determination of that claim by Master Yoxall, a period of some 15 months. However, the application would have taken some months to determine even if progressed promptly and the delay in listing the hearing was due to court administration in any event. The Defendant asserts that, had it been told about the application by the Claimant’s solicitors prior to April 2012, steps could have been taken to chase the court and obtain an earlier date. Whilst that may be true, the period of delay attributable to the Claimant’s default is a matter of speculation and is in any event delay in disposing of the First Claim for failure to serve in time, not in progressing that claim.

17.       The Defendant also relies upon the four and a half months which elapsed between the striking-out of the First Claim and the issue of the Second Claim. However, that period cannot be said to be an abuse in relation to the conduct of the First Claim, which had been terminated at that point, and cannot in my judgment be regarded as abusive delay going beyond what would be considered in a section 33 application in relation to the Second Claim.  Therefore, whilst I fully recognise that there were delays in the overall progress of the Claimant’s claim, I do not consider that such delays can be said to be inordinate and inexcusable such that the Second Claim should be struck out as an abuse of process rather than delays and conduct which fall to be considered within the context of section 33.

18.       The failure of the Claimant to pay the £3,000 ordered to be paid on account of the costs of the First Claim is not, in my judgment, either in itself or in combination with the other delays in this case, sufficient to constitute the Second Claim an abuse of process. The Defendant is not without a remedy in relation to the Claimant’s failure, being entitled to apply for a stay of the Second Claim pending payment or to take steps to enforce the order.   

19.       Even if I had taken the view that the Second Claim was an abuse of process, the question would still arise as to whether it was appropriate to strike-out the claim as a matter of discretion. Had I arrived at that point in this case, I would have directed that that issue be determined in the context of an overall consideration of section 33 of the Limitation Act, the question of abuse of process being one factor in all the circumstances.”

 The result

The appeal was allowed and the application to strike out as an abuse of process refused.  The claimant, however, still had to make an application under Section 33 of the Limitation Act 1980 and the judge was careful to indicate that nothing in the judgment concerned the merits of such an application.

STRIKING OUT AS AN ABUSE OF PROCESS: THE APPROPRIATE TEST

It is likely that applications will be coming before the courts where actions have been struck out as a result of the claimant failing to apply for relief from sanctions.

The abuse of process argument was considered by Rix LJ  in Aktas –v-Adepta [2011] QB 894 at paragraph 89:

“A question might arise, although it does not in either of these cases, as to whether a second action, in a Janov v Morris [1981] I WLR 1389 situation of real abuse, could be stopped in its tracks by being struck out, or whether even so it would be necessary to filter that question through the overall section 33 discretion. In my judgment, in an appropriate case, the second action could be struck out for abuse of process without entering on the section 33 discretion. The courts are entitled to control access to them in a situation of real abuse, and logic suggests that if there is or has been abuse which, having been found, ought to disentitle a claimant from proceeding with his claim, then the courts are entitled, in the exercise of their discretion, to say so. Such an action would be struck out for abuse of process, and the section 33 issue, which is an issue in that action, would never be reached. If a second action which is started within the limitation period can be struck out for abuse of process in the first action, it ought to follow that a second action which is commenced out of time can also be struck out in limine for the same reason. However, in the Arbuthnot Latham case [1998] I WLR 1426 Lord Wolf MR seems to suggest that the fact that there has been abuse in the first action is not an automatic bar to the commencement of a second action, although “some special reason has to be identified to justify a second action being allowed to proceed”: see p 1437A. If, therefore, despite the finding of abuse of process, the exercise of the court’s discretion, whether to strike out the second action or not, becomes something which cannot be determined in the abstract, without considering the section 33 circumstances as a whole, then it might become necessary to consider the question of abuse of process as part and parcel of “all the circumstances of the case” under section 33 (as Cox J did in Leeson v Marsden 103 BMLR 49).”

 Earlier in his judgment Rix LJ stated:-

“… all the cases make clear that for a matter to be an abuse of process, something more than a single negligent oversight in timely service is required: the various expressions which have been used are inordinate and inexcusable delay, intentional and contumelious default, or at least wholesale disregard of the rules”.

 JANOV –v- MORRIS [1981] 1 W.L.R. 1389

 Janov was a case in which the claimant (plaintiff) had failed to comply with a peremptory order. The initial action was still proceeding on the counter-claim and a second action was issued some time after the first action was struck out. Dunn L.J. observed:

“Speaking for myself, I regard it as a matter of discretion to be exercised, having regard to the circumstances of the particular case. In this case there had, from first to last, been no explanation whatever by the plaintiff why there was the 10-month delay before the application to strike out the first action in March 1980. There was no explanation at all why he failed to comply with the “unless” order, and there has been no indication in this present action that he intends to comply with the orders of the court any more than he did in the first action. Indeed he is still in contempt of court.

 In my judgment, the judge was in error in not approaching the matter as one of discretion in that way. His approach, in my view, was wrong in principle. This is a case in which the necessity for maintaining the principle that orders are made to be complied with should be upheld, and in the absence of any explanation as to why the order was not complied with in the previous action or any assurance as to the conduct of this action I would strike out this present action and allow the matter to be litigated on the counterclaim in the first action.”

THE QUESTION OF THE YEAR: IS A PARTY WHO CANNOT OBTAIN RELIEF FROM SANCTIONS ENTITLED TO ISSUE AGAIN?

This is likely to be one of the key arguments/issues in the default from sanction debate.  The issues are:

(1)      The Mitchell test is very rigorous.  It does not necessarily follow that a party who cannot obtain relief from sanction is guilty of “inordinate and inexcusable delay, intentional and contumelious default, or at least wholesale disregard of the rules”.

(2)          The case law on abuse of process recognises that negligent mistakes, such as a failure to serve the claim form properly, does not constitute an abuse of process.  The Mitchell test held that “well intentioned incompetence” is usually a bar to obtaining relief from sanctions.

(3)             The question of whether a second action is struck out emphasise that this is a matter of discretion.  However appears unlikely that single mistakes are likely to lead to a second action being categorised as an abuse of process.

RELATED POSTS

For a consideration of a case where the court considered (and refused) an application under Section 33 made by a claimant bringing a second action see http://civillitigationbrief.wordpress.com/2013/12/11/can-a-struck-out-claimant-issue-again-exercise-of-the-section-33-discretion-after-a-first-action-has-been-dismissed/

The first action in this case failed because the claimant had failed to serve the claim form timeously.  Issues relating to service of the claim form are discussed at:

FINDING THE CASES

Aktas –v- Adepta can be found at http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2010/1170.html&query=aktas&method=boolean

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