CLAIMANT’S APPLICATION FOR PERMISSION TO CONTINUE WITH THIRD SET OF PROCEEDINGS REFUSED: CPR 38.7 CONSIDERED IN DETAIL

In Danielewicz v Cannon & Anor [2023] EWHC 948 (KB) Master Thornett refused the claimant’s application for an order under CPR 38.7.  The claimant had issued proceedings twice before, but discontinued those actions.  The judgment contains a detailed consideration of the principles and cases relating to the CPR 38.7 discretion.

“7 A claimant who discontinues a claim needs the permission of the court to make another claim against the same defendant if –

(a) he discontinued the claim after the defendant filed a defence; and

(b) the other claim arises out of facts which are the same or substantially the same as those relating to the discontinued claim.”

THE CASE

The claimant was a pedestrian who had been injured in an accident in June 2015.

THE FIRST SET OF PROCEEDINGS

Proceedings were issued in 2018, with the claimant issuing in his own right, without a litigation friend.  Those proceedings were discontinued in March 2020 because of issues relating to service on the defendant driver.

THE SECOND SET OF PROCEEDINGS

The second set of proceedings were issued in September 2020, six months after discontinuance of the first action. Service of those proceedings took place in January 2021, towards the end of the period for service.

There were problems with the second set of proceedings.  The defendant driver had been served at the incorrect address, the insurer defendant issued an application to strike out. This application was never heard as these proceedings were discontinued in December 2021.

THE THIRD SET OF PROCEEDINGS

These were issued in March 2022. In October 2022 the claimant applied for an order under CPR 38.7.

THE APPLICATION

The judge noted that the rules were silent as to how or why a claimant should seek permission under CPR 38.7.

13.1 Rule 38.7 is silent how or when a claimant should seek permission. The notes in the White Book refer to conflicting views as to whether the Application has to be concluded before issue in order for any issued proceedings to be valid. In the current case the Claimant made the application after issue but prior to service, anticipating that the application could be heard prior to service. This did not occur, the Claimant explaining that time was needed for him “to serve proceedings to comply with CPR 7”.

I add that without proper presentation of the relevant information required by the court, in particular a completed Masters Appointment Form, the Claimant’s Application would not have been listed before then anyway.

13.2 Fortunately, no point taken by the Defendant that the Application is too late.

HOW SHOULD THE COURT APPROACH THE ISSUE OF DISCRETION?

The judgment contains a detailed consideration of the cases relating to CPR 38.7.

13.3 There are various reported authorities providing assistance on the operation of the Rule. Counsel have directed me each to their selections. There seems little fundamental difference between the parties on the guidance available, save that Mr Exall seeks to refine the criteria for permission by relying upon – as “the appropriate approach” – the following passages in Western Power Distribution (South Wales) Plc v South West Water Limited [2020] EWHC 3747 (TCC).

Joanna Smith QC, sitting as High Court Judge:

39. Having taken into account the submissions of the parties and all of the evidence, I disagree with Mr Coles. I note in particular the recent decision of the Court of Appeal in Playboy Club London Limited v Banca Nazionale del Lavoro SPA [2018] EWCA Civ 2025 , in particular the judgment of Sales LJ at [54] where he says this:

“The burden is on BNL as defendant to identify reasons why bringing the second claim is manifestly unfair: Michael Wilson & Partners v Sinclair [2017] EWCA Civ 3; [2017] 1 WLR 2646 , at [100] per Simon LJ (with whom the other members of the court agreed). The courts will not lightly shut out a party from pursuing a genuine claim, unless abuse of process can clearly be made out: Stuart v Goldberg Linde [2008] EWCA Civ 2; [2008] 1 WLR 823 , at [65] per Lloyd LJ. ‘It will be a rare case where the litigation of an issue which has not previously been decided between the same parties or their privies will amount to an abuse of process …’: Michael Wilson & Partners at [48(5)] per Simon LJ.”

40. Applying a broad merits-based judgment, there is, in my view, no manifest unfairness in this case in allowing the claimant to pursue the claim for the following reasons…..

13.4 Mr Exall accordingly submits that (i) the burden is on the Defendant to establish why bringing this claim is “manifestly unfair” and (ii) the court will not lightly shut out a party from pursuing a genuine claim unless abuse of process can clearly be made out (iii) the court should approach the matter by taking a “broad merits-based” approach. The Claimant submits that the present action cannot be treated as an abuse of process on the basis of the procedural errors in the earlier proceedings. The Claimant submits that because of the absence of evidential prejudice to the Defendant and limitation continuing to run owing to the Claimant being a Protected Party, the merits of permitting the present claim to continue justify permission. Mr Exall elaborated that because the Claimant cannot give evidence owing to his condition and the First Defendant being highly unlikely to be co-operative, the issue of the circumstances of the accident and hence accident reconstruction on the issue of contributory negligence are no different to what they always have been: the same evidence is there to be assessed.

Mr Exall sought initially to mollify the obvious adverse impression presented by the catalogue of errors in the previous claims by pointing out that they did not arise by reason of any attempt deliberately to flout the rules. I was referred to Para 17 of Mr Cowley’s witness statement suggesting that it seemed that the fee earner at the time of the Second Claim (who has since passed away) simply lacked the relevant procedural knowledge “initially”.

During the hearing when invited, however, Mr Exall conceded that ignorance of the relevant procedure and requirements realistically had to be described as negligence.

1. 1. Mr White on behalf of the Second Defendant disputes that r.38.7 amounts to a test of manifest unfairness and distinguishes the facts and circumstances of Western Power. Moreover, he submits it is clear from other authorities, particularly from the Court of Appeal, that the ambit of discretion and consideration by the court is far wider and ultimately guided by the fundamental requirement of explanation for the previous error(s) or default as gave rise to the discontinuance. Mr White emphasises Briggs LJ in Hague Plant Limited v Hague and Others [2014] EWCA Civ 1609.

At [61] Briggs LJ noted that the then edition of the White Book used the phrase “exceptional circumstances” as characteristic of the sort of explanation likely to be required in an application for permission under Pt 38.7 and commented

“… but it is dangerous in my view to erect that as a test imposed by the rules, not least because of its inherent uncertainty. To that limited extent the judge may have mis-described the ambit of the court’s discretion to give such permission. The real question for the judge was whether, having abandoned the de facto directorship claim … a sufficient explanation was offered for its re-introduction to overcome the court’s natural disinclination to permit a party to re-introduce a claim which it had after careful consideration decided to abandon.”

1. 1. In Captain Saulawa & Anor v Captain Abeyratne & Anor [2018] EWHC 2463 (Ch) Chief Master Marsh at [13] similarly drew upon explanation by way of background to the discontinuance, and court resources reflecting disinclination towards repeated claims, as highly pertinent:

“… the way the court should consider the matter was to consider the relevant conduct of the parties, to consider prejudice and to consider whether there is any indication of harassment or other matters. In short, it seems to me that it is right that the court should look at the circumstances in which the discontinuance took place; but the court is also entitled to look at the position in the round, to have regard to the interests of justice and also to have regard to the not unimportant factor of the proper use of court resources.”

1. 1. Mr White points out that Western Power was a case where the second claim arose from facts unknown to the Claimant at the time of issue of the first and where the Claimant had fully paid the (then) Defendant’s costs of the first claim. In contrast, the present claim sees no new facts or events, simply the Claimant and his legal advisors seeking to make good two, not one, previous attempts. Further, the Defendants’ costs in neither of the former claims have been paid, so it fairly can be said that the Second Defendant approaches this claim already at a financial disadvantage.

1. 1. I agree with Mr White that Western Power was a different case and do not accept it can be read as establishing the specific and distilled test suggested by the Claimant. At [22], in contrasting r.38.7 with r.17.4 (amendment after limitation), the Deputy Judge remarked how r.38.7 was different because it is “concerned with ensuring that the putative defendant is not placed in a situation where he must be twice vexed with the same matter”. Hence, following the dicta of Briggs LJ in Hague [27], a “key issue” is whether there is sufficient explanation for the subsequent claim [29].

Paragraphs [39] and [40] relied upon by the Claimant therefore have to read in context. The Deputy Judge there was dismissing a submission from the defendant that the well known principle in Henderson v Henderson had a direct application in a r. 38.7 application and thus a second claim had to be treated as an abuse of process. Hence consideration, and the singling out, of the procedural concept of unfairness was in the context of considering abuse of process; as explored in Playboy Club London Ltd, a decision concerning whether a claim in deceit should have been relied upon in a previous claim and so whether the subsequent claim amounted to an abuse of process.

On my reading, at [40] the concept of unfairness (manifest or otherwise) was quite clearly not intended as an exclusive or dispositive test but one of various factors listed as falling within the requisite “broad merit-based judgment” accepted at the very commencement of [40].

In passing, I remark, that if strict analogy with the reasoning in Western Power is relied upon, several of the factors listed in the case as relevant at [40] are very different indeed from this case and so undermine the Claimant’s intended approach:

(i) The very early discontinuance of the first action;

(ii) Minimal inconvenience to the defendant;

(iii) An actual payment towards the defendant’s costs; and

(iv) The absence of what might constitute “unjust harassment” of the rejoined defendants.

Hence, it was “in accordance with the overriding objective” to permit the new claim [42].

1. 1. I am satisfied that “unfairness” is therefore but one of the various factors for consideration within r.38.7, no single one of which is always bound to be more authoritative than another. It is plain from other authorities as to the far broader and non-exclusive nature of the considerations to be applied.

1. 1. In Wickham v Riley [2020] EWHC 3711 (Fam) the claimant’s son was granted permission pursuant to r. 38.7 to issue a further claim against his father’s estate. At paragraph 30 of the Judgment, Williams J held that the approach to such applications should be as follows:-

“i) The application is to be considered in the light of the overriding objective to deal with cases justly.

ii) Applications for permission to bring a new claim made after the expiry of a relevant limitation period should normally be refused whether or not the claim itself was issued before the expiry of the limitation period or afterwards.

iii) The nature of the limitation period will be relevant. If the limitation period is a purely discretionary one the approach will be different to cases where the limitation period is more rigid.

iv) There is a public interest in finality in litigation which must be relevant to the question of whether permission should be granted.

v) The court must consider whether a sufficient explanation has been offered for the reintroduction of a claim which had been abandoned. The circumstances in which the claim was abandoned will be relevant. If the claimant had been misled or tricked by the defendant, where important new evidence had come to light or where there had been a retrospective change in the law it is likely the court would give permission.

vi) The merits of the underlying claim will be relevant. Where the claim has no reasonable prospect of success or is an abuse of process this will be relevant.

vii) Other aspects of the overriding objective will be relevant.”

1. 1. In the very recent case of Astley v Mid-Cheshire Hospitals NHS Foundation Trust [2022] EWHC 337 (QB), Eyre J also confirmed the broader approach to be adopted. At [46], discussing the similarities but also distinctions between Pt 38.7 and Henderson v Henderson or Johnson v Gore Wood principles:

“The Johnson v Gore Wood requirement that the court is to make a broad merits based assessment and the need for finality and for the avoidance of abuse of process which underly the Henderson v Henderson principle can of course be relevant when the court is considering giving permission under Pt 38.7. Looking at the merits broadly and considering manifest unfairness will often be relevant factors. It may well be on occasion relevant as a check to see whether, if the earlier proceedings had been resolved in a way different from discontinuance, there would be an abuse in bringing fresh proceedings. However, none of that, in my judgement, is the actual test to be applied. Instead, those are matters which go into the circumstances to be considered when the court is looking at matters in the round and applying, as it should, in my assessment, Briggs LJ’s test to see if there is sufficient explanation given to overcome the court’s disinclination to allow further proceedings arising out of the same circumstances. Consideration of the merits broadly and potential abuse are elements in the process described by Chief Master Marsh in the Captain Saulawa case but they are not the governing criteria. They will often be very potent factors in what is an exercise of discretion but the test must be that laid down by Briggs LJ”.

THE EXERCISE OF THE DISCRETION IN THE CURRENT CASE

The judge stated it was inappropriate for the court to exercise its discretion in the current case.

1. 1. Whilst openly acknowledging the sequence of errors, the Claimant submits that permission should be given to continue with the Third Claim. Mr Exall emphasised this is a claim of considerable value where, subject to any deduction for contributory negligence, the Claimant is entitled to damages. Further, the issue of contributory negligence is not evidentially prejudiced by the delay caused by the errors. The accident reconstruction expert evidence will follow the same path as it always would have done. Whilst conceding it is not necessarily a card that wholly trumps the desire for finality in litigation, Mr Exall submits that absence of evidential prejudice is a very significant factor.

I am asked to note the distinction between the errors of his solicitors and the absence of any events caused by him personally or his family. I have no direct evidence of this and comment that the feature of a Protected Party having a Litigation Friend is to ensure compliance with court rules and procedure.

Further, owing to limitation still running Mr Exall submits that it would remain open to the Claimant to issue a fourth claim if he wanted.

1. 1. The Defendant emphasises the circumstances and nature of the errors in which two, not one, claims have now been discontinued in respect of the same cause of action. Mr White drew my attention to the distinction made by HH Mathews at [46] in Ward v Hutt [2018] EWHC 77 (Ch) between a party seeking to amend and thereby bolster their claim in an existing claim and a party repeating the same claim as had formerly been voluntarily given up. In this case, that feature has been twice repeated. Mr White submits that the starting point in r.38.6 to act as a check on re-litigating previous disputes given the public interest in the finality of litigation. Considerations of saving time and resource, or at least allocating the same proportionately, are likewise at the centre of the Overriding Objective.

1. 1. Conclusion

I look at matters in the round and balancing the various factors. No one factor is conclusive but the most significant factors have to be the circumstances in which two sets of proceedings for the same cause of action were discontinued. Here, explanation is key, whether as seen specifically in the context of r.38.7 or in the added context of Denton considerations. On the latter test, it is openly conceded by the Claimant that the breaches are serious and significant, not trivial.

It is regrettably a very striking feature of this case that there is no explanation for the catalogue of errors in this case other than ignorance of procedural rules and a failure to establish evidence in a way that other defendants had proved could relatively easily be obtained. Evidence, moreover, that had then been provided to the Claimant before issue of the Second Claim. Ignorance of procedure is hardly a persuasive explanation, even from a litigant in person. Neither would overwork or lack of reasonable resource to investigate if, by inference, those are taken to be an implied explanation. In my judgment, the unfortunate errors in the First Claim were entirely amenable to correction and remedy in the Second Claim. On the facts and evidence as explored, the failure to explain in this claim how and why in the Second Claim there were repeated the same (in the case of retaining an established incorrect address for service for the First Defendant) or similar errors in the First Claim is serious and profound.

Frankness of acknowledgment of error is not a complete substitute for adequate explanation. Were it to be, then practically every application for relief would be granted.

I am unpersuaded by the suggestion that the Claimant theoretically can still continue to bring claims owing to limitation still running. Whilst the authorities are careful to draw distinctions in analogies between the operation and considerations of r.38.7 to those in abuse of process Applications, it seems to me that the repeated issue of claims arising from precisely the same cause of action would amount to an abuse of process in its own right. Either way, however, the submission has little appeal in seeking the exercise of discretion in this third claim.

I am unpersuaded that the absence of evidential prejudice in a claim whereby the Claimant is acknowledged in principle to be entitled to receive certain damages is sufficient to justify the continued engagement of resources by either the court or the defendant(s). I agree with the Defendant’s submission that, although not always a palatable one, on the facts of this case the Claimant has an obvious cause of action against his present solicitors. Here the very points relied upon about undenied entitlement of damages in principle and lack of evidential prejudice are at least as compelling in concluding that permission should not be granted to continue with this claim as they are why the Claimant should instead consider looking to his solicitors via their indemnity insurance.

In conclusion, having regard to the resources which have already been taken up in dealing with this claim, the overriding objective and the court’s natural disinclination to permit repeated litigation without convincing explanation and justification, the Application is dismissed. The claim should be struck out.