SERVICE OF THE CLAIM FORM: SCOTTISH LAW: LIMITATION AND EXTENSIONS OF TIME: A LESSON HERE FOR US ALL

In  Johnson v Berentzen & Anor [2021] EWHC 1042 (QB) Mrs Justice Stacey considered a case where a claimant inadvertently fell foul of Scottish limitation law.  In Scottish cases proceedings need to be served within the three year period, it is not sufficient simply to issue.  The claimant had to rely on the court’s discretion to extend time, which is a much more restrictive discretion than under Section 33. The claimant was successful.   The case serves as a reminder to us all not to make assumptions in relation to limitation periods.  This case is also important because a factor remarked upon by the judge was the open and co-operative way in which the action had been proceeding prior to the claimant falling foul of the limitation period.  There is a strong suspicion that the open way in which the case was conducted played some significant part in persuading the court to exercise the limited discretion it had.

“[if the claimant’s solicitor] had checked with a Scots lawyer, or even open source material from the internet, he would have learnt that the proceedings needed to be served within the triennium under Scots law and it could be argued that exercising reasonable skill and care with the prudence and caution one might expect he would have taken no risks and just served the proceedings before 15 June 2019 which he could have done, even if it meant some aspects of the schedule of special damage were TBA.”

THE CASE

The claimant was seriously injured in a road traffic accident in Scotland. He issued proceedings in England.  Proceedings were issued within the three year limitation period. However Scottish law requires that proceedings be served within the three year period, the claimant served outside that period. The defendant took the point in relation to limitation, asserting that the claim was statute barred.

THE JUDGMENT: SCOTTISH LIMITATION LAW APPLIED

1. The court rejected the claimant’s argument that  the limitation period stopped running for the purpose of limitation and that this was a point of procedure and the law of England and Wales applied.

1. 1. In summary, none of Mr McDermott QC arguments could overcome the central difficulty that the requirement to serve the proceedings in order to stop the limitation clock is not merely procedural but a long standing matter of substantive Scots law. His argument that Pandya was wrongly decided could not succeed.

2. Since the claimant has not established a powerful reason for not following Pandya, which in any event I agree with, the answer to the first issue is that it is the Scots law rules which govern when time stops running, or is interrupted, for the purposes of limitation and that the claimant’s action was commenced outside the relevant limitation period (issue (ii).

RELIANCE ON THE SCOTTISH EQUIVALENT OF SECTION 33 OF THE LIMITATION ACT 1980

The judge, therefore, had to consider whether the discretion available to the court under s.19A Prescription and Limitation (Scotland) Act 1973 (“the 1973 Act”) should be used so as to allow the claimant’s action to continue. The Court, therefore, had to apply Scottish law.  The discretion appears to be much more limited than that in Section 33 of the Limitation Act 1980.  The judge felt able to exercise that discretion in the claimant’s favour.

1. 1. In light of my conclusions on the first two issues, it becomes necessary to consider the third: the court’s equitable discretion to allow an action to proceed out of time. S.19A of the 1973 Act provides that:

“(1) Where a person would be entitled, but for any of the provisions of section 17, 18, 18A or 18B of this Act, to bring an action, the court may, if it seems equitable to do so, allow him to bring the action notwithstanding that provision”

1. 1. Once again there was helpfully a considerable measure of agreement between the parties and the Scots law experts as to how the Court should approach this task. A number of principles were uncontroversial. S.19A confers an unfettered discretionary power and each case turns on its own facts and particular circumstances. However since this Court is required to approach the exercise of the unfettered discretion as a Scots judge would do it is therefore helpful and informative to play close attention to the case law to understand how Scottish judges have exercised their discretion and approached cases with some similar, albeit not identical features.

1. 1. The onus is on the pursuer, or in English law the claimant, to persuade the court to exercise the discretion.

1. 1. Subject to the important caveat that limited assistance is provided by the case law since each case is fact sensitive and the court is considering the exercise of a discretion, the parties agreed that the lead cases on the application of s.19A are: Donald v Rutherford 1984 SLT 70, Forsyth v A.F. Stoddard & Co Ltd 1985 SLT 51, McCabe v McLellan 1994 SC 87, Clark v Mclean 1994 SC 410 and B v Murray (No. 2) 2008 SC(HL) 146. The most recent decisions of the Inner House are A v Glasgow City Council [2019] SC 295 and Jacobsen v Chaturvedi [2017] CSIH 8. In the majority of reported cases the courts have declined to exercise their discretion.

1. 1. In cross examination Ms Grahame QC accepted Mr Milligan QC’s proposition that the prejudice to the claimant from not being able to pursue his claim is counterbalanced by the loss to the defendant of the ability to avail themselves of the statutory defence. So that if the claimant cannot point to any other factor, the court will not exercise its discretion in favour of the claimant.

1. The availability and strength of an alternative remedy against a pursuer’s solicitor are strong and important factors for the court to consider, but will not per se or automatically result in a refusal by the court to exercise its discretion in favour of a claimant. Ms Grahame QC accepted the weight that Scottish courts have placed on the ability of a claimant to recover from a negligent solicitor in deciding not to extend time and Mr Milligan accepted that it was not determinative, so by the close of their evidence there was no material difference between them.

THE JUDGE’S DECISION

The judge considered the case law and relevant principles applying to the discretion under the Scottish statute. She felt able to exercise that discretion in the claimant’s favour on the facts of this case.

1. 1. The legal experts were right to remind the court that the case law stressed the limited value of case law when considering how a court should exercise an unfettered discretion as each case will turn on its facts. But it was also understandable that they then each sought to draw the court’s attention to the specific facts of some of the case law. But beyond the general principles set out above however, the cases are no more than illustrations of how a court has approached the exercise of its discretionary powers in particular cases.

1. 1. The starting point is that compliance with the limitation period:

“should not be seen as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents rather the considered judgement of the legislature that the welfare of society is best served if causes of action are litigated within the specified period, even if in consequence good causes of action may be defeated. The limitation period must accordingly be regarded as the general rule and the extension provision as an exception designed to deal with the justice of individual cases.”

(Brisbane South Regional Health Authority v Taylor [1996] 186 CLR 541 per McHugh J

1. 1. In order to consider and weigh the factors fairly and at the risk of a somewhat pedestrian approach it is helpful to list the relevant facts and circumstances in this case in order to make an assessment of whether the claimant has established that the discretion should be exercised, failing which the claim must be dismissed.

1. 1. The prejudice to the claimant in not being granted an extension of time is automatically counter-balanced by the loss of the complete statutory defence of limitation. The potential value of the claim – which appears to be larger than that of any of the Scottish cases cited – is a double edged sword: the stakes are high on both sides. However it is of some relevance that the bulk of the claim is for the claimant’s future care needs and treatment needs which are not being met by the NHS. The defendants’ recent confirmation that they will not seek to recoup the care costs and interim payments made until August 2018 means that the claimant will not be disadvantaged by having to refund significant amounts of money. However the fact that the defendants have now stopped funding or providing the claimant’s current care and treatment needs not covered by the NHS is an important relevant factor in the claimant’s favour especially when considering the impact of delay, which is dealt with in more detail below.

1. 1. It weighs in the claimant’s favour that the delay will not cause prejudice in the investigation and preparation, as this has already been undertaken by both sides to enable them to have a clear view on the merits of their respective positions concerning both liability and quantum (subject to updating given the claimant’s deteriorating health). The work has been done, there are no evidential difficulties and the case is fully advanced. This is not a stale claim and there is no prejudice to the defendants by dint of the claim being served late. Full enquiry had been carried out by both parties within the triennium which, as noted by Lord Cameron in Donald v Rutherford is a factor of importance.

1. 1. Although no admissions of liability had been made it also weighs considerably in the claimant’s favour that until the claimant’s heart attack, agreement on settlement terms had been reached subject only to minor tweaking. The parties were agreed that the court should not be told the full details, but it was common ground that the only outstanding matters were finalisation of an agreed form of periodical payments and provisional damages order. The parties both knew and agreed liability and quantum (prior to the claimant’s heart attack), even if the court was not to be told. It is also of significance that the defendants have settled Ms Venables’ claim, seemingly without involving the claimant’s insurer, albeit without admission of liability.

1. 1. The limitation period was missed by a matter of just a few weeks, which although in the claimant’s favours bears little weight per se. The Scottish authorities appear to work on the principle that a miss is as good as a mile (see for example Fleming v Keiller [2006] CSOH 163 where the time limit was missed by 1 day and the extension was refused). The point however is that a longer delay would have weighed in favour of the defendants.

1. 1. I do not accept the claimant’s submission that the failure to serve within the triennium is a trivial delay. It is apparent from the Scots authorities that service of proceedings is an essential and important aspect (see, for example, the reference in A v Glasgow City Council [2018] CSOH 116; 2019 SLT 32 at para 18 when the failure to have the summons called was described by Lord Doherty as “less egregious than many of the reported cases where a solicitor has failed to serve a summons within the triennium”). However it could have been worse and the claim form was issued well within the three-year period and the defendants, although not formally served, knew about it and had been sent the claim form on the day it was issued on 8 April 2019.

1. 1. Both sides solicitors have behaved well in a constructive and co-operative manner. It is in the claimant’s favour that information and evidence has been promptly shared but also in the defendants’ favour that they too have willingly engaged and worked collaboratively with the claimant.

1. 1. A considerable part of the hearing was spent examining the strength of the potential claim the claimant might have against his solicitors in negligence since it is now common ground that the existence of an alternative remedy is a highly relevant factor to be considered. Mr McDermott QC argued that Pandya came as a complete shock against the conventional wisdom whilst Mr McParland QC asserted that the weakness of the claimant’s argument was demonstrated by the reliance on just two textbooks, both of which had been quoted out of context as they did not apply to Rome II Regulation cases, which posited merely a suggestion that service of a claim might be a procedural matter for the lex fori, whilst the more authoritative and leading tomes such as Dicey, Morris and Collins, in the Conflict of Laws, 15edn at p2166 set out above make clear how narrowly the exclusion of matters of ‘evidence and procedure’ is to be interpreted, although Mr McDermott QC pointed other passages within Dicey that he suggested supported his argument.

1. 1. I accept that the alternative claim would be more complex than missing a domestic time limit in a domestic claim and there are arguments to be had as to the clarity of the position pre-Pandya. But if Mr Rigby had checked with a Scots lawyer, or even open source material from the internet, he would have learnt that the proceedings needed to be served within the triennium under Scots law and it could be argued that exercising reasonable skill and care with the prudence and caution one might expect he would have taken no risks and just served the proceedings before 15 June 2019 which he could have done, even if it meant some aspects of the schedule of special damage were TBA.

1. 1. If he had conducted further research and enquiries he would have appreciated that he would be taking a risk (at best) by not serving within the triennium in reliance on the argument that service of proceedings would be governed by lex fori. But he did not address his mind to it specifically and made assumptions which, with the benefit of hindsight and Pandya, were incorrect. In a claim valued at over £9 million I tend to agree more with Mr McParland QC’s submissions. I find it hard to accept Mr McDermott QC’s submission and Mr Rigby’s statement that the settled and long standing understanding of the law was that the law of the forum would apply to service of proceedings: post 2009 and s.8 of the 1984 Act and pre Pandya it was a grey area. I work on the premise that whilst not a cast iron case, it is likely that the claimant will have a reasonable alternative claim against his solicitors. It is therefore an important point in favour of the defendants’ contention that an extension should not be granted. Mr McParland QC relied on the authorities to reinforce his submission such as Lady Smith in Hill v McAlpine 2004 SLT 736 and her observation when granting an extension of time:

“I do so recognising that it is unusual for the court to allow an action to proceed out of time when the lateness of the raising of the action can be attributed to negligence on the part of the pursuer’s advisers”

1. 1. The fact of having an alternative claim is not however a complete answer to the question. One must be alive to the practical and logistical difficulties in pursuing satellite litigation. The claimant is significantly disabled from his incomplete tetraplegia from the accident and has significant heart problems together with long-standing and entrenched depression. Even for those in the best of physical and mental health it requires considerable effort and tenacity to embark on litigation, especially against your solicitors who have been advising and supporting you and with whom you worked closely sharing personal and intimate information for three years. It is relevant and noteworthy that the claimant has at times struggled to progress his claim, perhaps for obvious reasons given his health condition. It is also noteworthy that his clinical depression has affected his motivation and self-esteem and he finds everything an effort. It is easy for those of us who work in the law to underestimate the stress and strain of litigation and the level of administrative efficiency and capability, as well as resilience required to be a litigant, especially as a claimant.

1. 1. Mr McParland QC submitted that there was insufficient information to conclude that the personal circumstances of the claimant would impede his ability to pursue an alternative claim. True it is that I did not have a witness statement from the claimant addressing all these matters directly, but I am satisfied from the medical evidence which was not disputed and the evidence of Mr Rigby, who has spoken to his client, that it will be difficult and challenging for the claimant to avail himself of the opportunity of proceeding against his solicitors. There will be significant impediments given the claimant’s deteriorating physical health and fragile mental state in pursuing an alternative claim. His despair and sense of hopelessness will make it hard for him, especially as he has no family support behind him to encourage him and he fears his relationship with Ms Venables is precarious. It is relevant to note the severe effects on the claimant and the despondency caused by the withdrawal of the defendant’s settlement offer on 18 March 2019. Litigation is a source of pressure and requires considerable energy and someone with low self-esteem is likely to consider that they are not worth it. I have enough evidence before me from which to draw inferences and make common sense conclusions.

1. 1. I also take judicial note of the difficulties in finding capable and willing solicitors with the capacity to take on claims of professional negligence of this type. Lord Doherty described it well in A v Glasgow City Council:

“if the pursuers have to proceed against their solicitors they will have to find and instruct new representation in whom they have trust and confidence, and who would be prepared to accept instructions on funding basis which is satisfactory to both solicitors and clients”

1. 1. Furthermore, I find that there would be material and significant prejudice to the claimant by the inevitable delays that would be incurred if he had to rely on bringing a claim against his solicitors. The rehabilitation code funding and interim payments initially provided by the defendants which he is no longer receiving enabled the claimant to receive some of the care and treatment that he needed then, and still needs now. Mr Desai’s report stresses the importance of the care and rehabilitation needs not covered by public funding for both his physical and mental health. Further delays will be detrimental to the claimant and significant, lengthy further delays will be inevitable if he has to fall back on an alternative claim. If he has the motivation to pursue an alternative claim it will take time to find and instruct solicitors. It will take time for them to be in a position to formulate and make a claim for professional negligence. Stewarts LLP and their insurers will need time to consider their position and so it goes on.

1. 1. Time has not proved to be the great healer in the claimant’s case. If he was physically and mentally robust enough to pursue a claim against his lawyers, it would not be straightforward for the myriad reasons Mr McDermott QC sought to advance, even if it would ultimately be successful and it is impossible to predict whether or when interim payments or rehabilitation code funding would be resumed in the interim. It therefore inevitably follows that there would be delays and difficulties along the way requiring commitment and determination on the claimant’s part. There is no indication that liability would be quickly admitted.

1. 1. In considering therefore whether it is equitable for the claimant “to escape from the grip of the statute and for the reclaimer [defendant] to be called upon to continue a contest for which the law had relieved him” (Donald v Rutherford at para 77) I find that the claimant has discharged his burden and has established that he would suffer real and material prejudice if his claim was not permitted to proceed such that it is equitable to allow him to bring the action notwithstanding the limitation period set by Parliament. The claim was all but settled, but proving the maxim many a slip twixt cup and lip, the claimant’s heart attack changed all that.

1. The claimant has established cogent factors to merit depriving the defendants of what would have been a complete defence to the claim. The defendants were unable to point to any significant prejudice beyond having to defend the claim. The strongest point in the defendants’ favour was the prospect of the claimant having an alternative claim. But given the claimant’s physical and mental health and disabilities from the accident and as discussed above, I conclude that as in the case of A v Glasgow City Council, the possibility of claiming against his own solicitors is not the trump card it was portrayed as by Mr McParland QC. But in reaching my decision I have paid careful attention to Mr McParland QC’s submission to consider all the cases referred to me, and not focus on A v Glasgow to the exclusion of all the other cases weighing all factors in the balance and noting that whilst parliament has provided a time limit it has also provided an exception to enable the courts to deal with the justice in an individual case. I find that the balance of justice in this case lies with the claimant who has proved that it would be equitable for the court to grant the short extension necessary to validate the late served claim.