COURT REFUSES CLAIMANT’S APPLICATION FOR AN EXTENSION OF TIME FOR SERVICE OF THE CLAIM FORM: TIME IS ALWAYS TICKING

There are a number of issues relating to service of the claim form in the judgment of Mr Justice Nicklin in SMO v Tiktok Inc & Ors [2022] EWHC 489 (QB). Here we look at the judge’s refusal to grant an extension of time for service of the claim form on one of the defendants situated abroad.  The judgment shows the need for speed in all matters relating to service of the claim form.

The Claimant’s side is entirely at fault for the position the Claimant now finds herself in. The Defendants have done nothing to obstruct service of the Claim Form. They did not mislead the Claimant as to the position on service. This is not a case where the Claimant has been lulled into believing that service will be accepted, only for the position to change shortly before the deadline for service. The Defendants have simply refused to accept service otherwise than in accordance with the CPR. They are entitled to do so…”,

THE CASE

The claimant, a minor, is bringing a claim for breach of personal data by users of TikTok. The claimant’s litigation friend is the (now former) Children’s Commissioner for England.  It is said to be a representative claim. There are six defendants, only one of whom was resident in the UK.  The claim form was issued on 30 December 2020.  There had been no pre-action Protocol letter.  The claimant had six months to serve the claim form on the “service out” defendants.  A stay was agreed and then ended, the remaining time for serving the claim form started again.

THE SITUATION THE CLAIMANT WAS IN

There were delays, and apparent confusion, in relation to service abroad.  The judge observed that alarm bells should have started ringing at a much earlier time.
    1. A representative of the Foreign Process Section responded, on 6 January 2022, and stated that service in China could take over a year from the time the request was sent until a certificate of service was returned.
  1. If at no point before then, the receipt of that email should have sounded alarm bells at the Claimant’s solicitors. The position was stark. Without an extension of the six-month period to serve the Claim Form provided under CPR 7.5(2), the Claim Form was going to expire long before the Claim Form was likely to be served on the Fifth Defendant. Not only that. The Claimant also needed to obtain permission to serve the Claim Form out of the jurisdiction on the Service Out Defendants. The likely time it would take, once permission to serve out was granted, was not as bad for the First, Fourth and Sixth Defendants, but still time was relatively tight. Despite these pressing issues, even then no application was made, either for permission to serve the Claim Form on any defendant outside the jurisdiction or for an extension of time of the period within which to serve the Claim Form.

DEEPER HOLES ARE DUG

The UK defendant had been served. Others had not.  The judge noted a series of failures to take the opportunity to apply for an extension of time.
    1. Following receipt of that letter, still the Claimant made no application to the Court for permission to serve the Claim Form out of the jurisdiction or for any extension of time to do so. Instead, the Claimant’s solicitors responded to Hogan Lovells, on 17 January 2022. They rejected the Second Defendant’s proposed timetable for service of its Defence. Somewhat unrealistically, particularly in light of previous correspondence, the Claimant’s solicitors invited the foreign-domiciled Defendants to accept service of the Claimant’s application for permission to serve the Claim Form out of the jurisdiction, so that the summary judgment application and the application for permission to serve out could be heard at the same time. The Claimant’s solicitors proposed that the applications should be issued by 28 February 2022, with evidence being served by 28 March 2022, reply evidence by 4 April 2022 and a hearing to be fixed after 26 April 2022.
    1. Again, I would observe that, without an extension of time for service of the Claim Form, the timetable proposed by the Claimant would have proved academic. The time for serving the Claim Form would have expired long before the proposed hearing of the applications could have taken place.
    1. Even then, the Claimant still took no steps to issue an Application Notice seeking permission to serve the Claim Form on the Service Out Defendants and/or an extension of time for doing so. The continued failure to issue an Application Notice seeking an extension of time is particularly surprising given that the Claimant’s solicitors had been told, on 6 January 2022, that it could take a year to effect service in China.
    1. Hogan Lovells responded on 21 January 2022. They confirmed that their lack of instructions to accept service of the Claim Form on the foreign domiciled defendants also extended to not accepting service of Applications made in the proceedings. This stance was hardly surprising and was entirely consistent with the stance that had been adopted by the Defendants since at least February 2021. Even this did not provoke the Claimant’s solicitors to issue any application regarding service of the Claim Form and the period for doing so.
    1. On 31 January 2022, the Claimant and Second Defendant filed a consent order containing agreed directions for the Second Defendant’s intended summary judgment application. That consent order was marked to go before the assigned Master.
  1. It was not until 22 February 2022 that the Claimant finally issued the Applications that are currently before the Court.

 

ARGUMENTS ABOUT THE EFFECT OF THE STAY

The claimant, somewhat belatedly, raised issues as to whether a stay had deferred the time for service.

Dispute over the effect of the stay and the last date for service of the Claim Form
    1. The Claimant’s skeleton argument for the hearing, filed and exchanged on Monday 28 February 2022, raised for the first time a suggestion that the period for serving the Claim Form on the Service Out Defendants did not, in fact, expire until 6 April 2022. The explanation for this was:
“… the deadline for service of the Claim Form on the Service Out Defendants was estimated at 3 March 2022. However, this was based on the stay being agreed between the parties in 2021 having commenced on 6 April 2021 (“the Stay”), i.e. the date of the Order made by Master Giddon (sic). The Claimant has reconsidered this point and pursuant to CPR 2.11, it appears that the Stay in fact commenced on 3 March 2021, when there was a written agreement between the parties. This means that the relevant deadline for service of the Claim Form is 6 April 2022, so an extension of time may not be needed (depending on the date when judgment is handed down) if permission to serve out is granted. Nevertheless out of an abundance of caution, an extension is still sought in relation to the [First, Fourth and Sixth] Defendants.”
    1. As an alternative, in a footnote to the skeleton, the Claimant contended that the deadline for service of the Claim Form on the Service Out Defendants might be 21 March 2022, if the stay ran from the date on which the consent order was filed by the parties with the Court, which was 19 March 2021. Ms Proops QC indicated that this interpretation of the events – and the more generous period that it provides for service of the Claim Form on the Service Out Defendants – is likely to be disputed in the event that it proves to be material whether the Claim Form has been served within the prescribed period.
  1. The law reports are littered with decisions, in relation to service of the Claim Form, where Claimants have complicated the arrangements for service of the Claim Form. I do not need to determine the point – which ultimately is likely to need to be resolved by an application of contractual principles – as to when the stay commenced, and therefore the date by which the Claim Form has to be served, but it threatens to add to the examples of cases where needless complications attend service of a Claim Form within the prescribed period. It is surprising that the point about the date on which the stay commenced was first raised in the skeleton argument for this hearing.

DETERMINATION OF THE CLAIMANT’S APPLICATION FOR AN EXTENSION OF TIME

The judge considered the principles relating to extension of time for service of the claim form. Applying those principles to the current case the claimant’s application was not granted.

Extension of time for service of the Claim Form: CPR 7.6
    1. As noted above:
i) the Claim Form was issued on 30 December 2020;
ii) the Claimant had 6 months from the date of issue to serve the Claim Form on the Service Out Defendants; and
iii) there is now a dispute between the parties as to the effective period of the stay that was agreed between them and therefore the final date for service of the Claim Form on the Service Out Defendants. Depending on how events are interpreted – and their legal effect – this date apparently ranges from 28 February 2022 to 6 April 2022.
    1. The Court can extend the time for service of the Claim Form pursuant to CPR 7.6, which provides:
“(1) The claimant may apply for an order extending the period for compliance with rule 7.5.
(2) The general rule is that an application to extend time for compliance with rule 7.5 must be made-
(a) within the period specified by rule 7.5; or

(b) where an order has been made under this rule, within the period for service specified in that order.

(3) …
(4) An application for an order extending time for compliance with rule 7.5-
(a) must be supported by evidence; and
(b) may be made without notice.”
    1. The evidence supporting an application for an extension of time under CPR 7.6 must contain “a full explanation as to why the claim has not been served”: CPR PD 7A §8.2(4).
    1. Distilled from several Court of Appeal authorities, the principles to be applied when considering an application under CPR 7.6 were set out by Blackburne J in Sodastream Ltd -v- Coates [2009] EWHC 1936 (Ch) [50]:
i) The principal and frequently the only question is to determine whether there was a good reason for the claimant’s failure to serve the Claim Form within the period allowed by the rules.
ii) If there is a very good reason for the failure to serve within the specified period, an extension of time will usually be granted, for example where the court has been unable to serve the Claim Form, or the claimant has taken all reasonable steps to serve but has been unable to do so.
iii) Conversely, the absence of any good reason for the failure to serve is likely to be a decisive factor against the grant of an extension of time.
iv) The weaker the reason for failure to serve, the more likely the court will be to refuse to grant the extension.
v) Whether the limitation period applicable to the claim has expired is of importance to the exercise of the discretion since an extension has the effect of extending the period of limitation and disturbing the entitlement of the potential defendant to be free of the possibility of any claim.
vi) The fact that the claimant has delayed serving the Claim Form until the particulars of claim were ready is not likely to provide a good reason for the failure to serve.
vii) The fact that the person to be served has been supplied with a copy of the Claim Form or is otherwise aware of the claimant’s wish to take proceedings against him is a factor to be considered.
viii) Provided he has done nothing to put obstacles in the claimant’s way, a potential defendant is under no obligation to give any positive assistance to the claimant to serve the Claim Form, so that the fact that the potential defendant has simply sat back, and awaited developments (if any) is an entirely neutral factor in the exercise of the discretion.
    1. To those principles can be added the following:
i) The Court should only extend the period for serving the Claim Form when it is satisfied that to do so furthers the overriding objective: CPR 1.2. As such, an order under CPR 7.6 should be made only where to do so will enable the court to deal with the case in question “justly and at proportionate cost”, which, in turn, requires the court to ensure that “the parties are on an equal footing and can participate fully in proceedings” and that the case is dealt with “fairly“: Formal Holdings Ltd -v- Frankland Assets Inc [2021] EWHC 1415 [34] per HHJ Klein.
ii) In general, an extension of time is not justified where it is needed because of the negligence of those acting for the claimant. But it does not follow that an extension of time will necessarily be granted in a limitation case where those acting for the claimant have acted competently: Cecil -v- Bayat [2011] 1 WLR 3086 [44] per Stanley Burnton LJ. Funding difficulties are not usually a good reason justifying an extension of time: Cecil [47].
iii) An action is completely constituted when the Claim Form is issued, but it is not until the Claim Form is served that the defendant becomes subject to the court’s jurisdiction: Barton -v- Wright Hassall LLP [2018] 1 WLR 1119 [8] per Lord Sumption.
iv) Joinder of a foreign defendant is an exercise of extra territorial jurisdiction, and no criticism can be made of such a defendant who refuses to instruct English solicitors to accept serviceEuro-Asian Oil SA -v- Abilo (UK) Ltd [2013] EWHC 485 (Comm) [36] per Burton J.
v) The fact that, if the limitation period has not expired, the claimant will be able to issue a fresh claim is not, itself, a justification for granting an extension of timeCecil [48]; and Aktas -v- Adepta [2011] QB 894 [91].
Decision
    1. I refuse to grant any extension of time for serving the Claim Form on the remaining Defendants. The inescapable reality is that the reason that the Claimant needs an extension of time is that she has failed to take the necessary steps to serve the Claim Form within the time for doing so until practically the last minute. There is no good reason for that failure. On the contrary, the Claimant finds herself in this position largely because of the tactical decision to issue the Claim Form on 30 December 2020 in order to take advantage of a more favourable legal regime that would be unavailable after 1 January 2021. In this case, apart from the litigation advantage obtained by issuing the claim before 1 January 2021, there was no other reason for the Claimant to issue the Claim Form when she did. There was no limitation issue; the Lloyd -v- Google decision was awaited; and there had been no pre-action correspondence, as there should have been.
    1. For understandable and legitimate reasons, the parties wanted to wait for the Supreme Court decision in Lloyd -v- Google. But the Claimant also wanted to obtain the benefit of having issued her claim before changes in the law that took effect on 1 January 2021. The Claimant was perfectly entitled to seek that benefit, but it came with an unavoidable downside. Once the Claim Form was issued, the period within which it had to be served on the Service Out Defendants began to count down. It took over three months, half the period for service of a Claim Form, before a stay pending the Supreme Court decision was ordered by the Court. The Claimant could have sought the permission to serve the Claimant on the Service Out Defendants at any stage after issue of the Claim Form, but she did not do so. Perhaps that was because of the complexities of litigation brought on this representative basis and/or issues relating to the funding of the claim, but that is not a good enough reason. The primary responsibility on the Claimant’s solicitors is the proper progression of the claim, including adherence to the prescribed deadlines.
    1. Once the Supreme Court’s decision was given on 10 November 2021, the deadline for serving the Claim Form (and the need to obtain permission to serve out) became a pressing reality again. In my judgment, whatever can be said about the failure to make an application for permission to serve the Claim Form on the Service Out Defendants prior to the stay, there was no excuse for the failure to progress that application as soon as the Supreme Court decision was known. It was the essential and obvious next step that the Claimant had to take, and it had to be taken before a deadline. I can appreciate that the Claimant’s advisors would have preferred an opportunity to consider the implications of the Supreme Court decision, but the decision to issue the Claim From on 30 December 2020 meant that time was not a luxury that they had.
    1. The stay was lifted on 8 December 2021. It took until 31 December 2021 before the Particulars of Claim were served, which, as then understood was practically on the last day of the period permitted for service on the Second Defendant. It was not until 4 January 2022, that the Claimant’s advisors first turned to consider the mechanics of serving the Claim Form on the Fifth Defendant and, critically, how long that step was likely to take. They learned that serving the Claim Form on the Fifth Defendant could take a year or more, but even that information did not spur the Claimant’s team into action. Indeed, proposals put forward by the Claimant’s solicitors at this stage (see [22]-[23] and [32]-[33] above) suggest that they had simply failed to grasp the looming deadline for service of the Claim Form. The delay between 6 January 2022 and 22 February 2022, when the Applications were finally issued, is barely explained in the evidence and is not justified. A 10-day period of illness of Leading Counsel, and the court commitments of other lawyers, cannot be an adequate excuse. This was a pressing deadline that needed immediate attention and urgent action.
    1. The Claimant’s side is entirely at fault for the position the Claimant now finds herself in. The Defendants have done nothing to obstruct service of the Claim Form. They did not mislead the Claimant as to the position on service. This is not a case where the Claimant has been lulled into believing that service will be accepted, only for the position to change shortly before the deadline for service. The Defendants have simply refused to accept service otherwise than in accordance with the CPR. They are entitled to do so, and Hogan Lovells have been consistent in making the position clear throughout. It is for a claimant to establish the jurisdiction of the Court over a defendant by service of the Claim Form in the time permitted and, where necessary, to obtain the Court’s permission to serve out of the jurisdiction. These might be considered to be fundamental and basic principles of civil litigation.
  1. Mr Ciumei QC’s strongest argument was that an extension of the time to serve the Claim Form on the Fifth Defendant was always going to be required. Nevertheless, I do not consider that this excuses the failure properly to progress the application for permission to serve the Claim Form out of the jurisdiction. It may be that, had the application to serve the Claim Form out of the jurisdiction on the Service Out Defendants been made promptly following the Supreme Court decision in Lloyd -v- Google, the Court might, when granting permission to serve out, have also granted an extension of time to reflect the time it was likely to take to serve the Claim Form on the Fifth Defendant. Critically, the Claimant did not do this. Instead, she allowed a further 3 months to pass before the Application was finally issued. As I have explained, she has not provided a good reason for this delay and consequently she cannot provide a good reason why she has failed to serve the Claim Form on the Service Out Defendants.