LATE SERVICE OF THE PARTICULARS OF CLAIM: THE “TRAP FOR THE UNWARY” AND RELIEF FROM SANCTIONS

In Altiatech Ltd v Birmingham City Council [2023] EWHC 1371 (TCC) Mr Justice Waksman considered the position when a claimant served the Particulars of Claim late.  The judgement refers to a specific rules in relation to procurement.  However the point about a “trap for the unwary” in relation to service of the Particulars of Claim is a general one. Whilst it may be safe to put a claim form in the post on the last day for service, particular difficulties and arguments exist in relation to late service of the Particulars of Claim.

there is a particular trap for the unwary here because what needs to be done within the four month period in order to constitute timely service of the Claim Form is that it should, for example, be posted on the last day as opposed to being served by the last day, under the usual rules. See CPR 7.5(1). On the other hand service of the Particulars of Claim if by post is deemed to occur only two days after posting

 

THE CASE

The claimant brought an action challenging a procurement decision.  The judge found that the claim form in the action had been served in time. However the relevant regulations required the Particulars of Claim to be served within 7 days of service of the claim form. The Particulars of Claim were served late.  The judge considered, and granted, the claimant’s application for relief from sanctions.

 

A TRAP FOR THE UNWARY

The judge noted the particular trap that exists when a claimant serves a claim form late. The claim form is deemed to be served on the date it is put in the post.  The Particulars of Claim, however, are not deemed to arrive until two days after posting.
    1. The notes in the White Book at 7.4.3 describe the combination of sub-paragraphs (1) and (2) of CPR 7.4 as a “trap for the unwary”. This is because a claimant will then not have 14 days to serve the Particulars of Claim if, for example, the Claim Form itself was served, say, 10 days before the end of the four month period. The Particulars of Claim must themselves be served by the end of that four month period as well, even though this is less than 14 days from the date of service of the Claim Form. One can nonetheless see the logic for this, where the claimant has a long period in which to serve the Claim Form but choices to leave it until the last moment. The logic is less clear where Regulation 94(1) applies, since on any view a claimant only has a very short period to serve the Claim Form, namely 7 days from the date of issue.
  1. Moreover, and as Altiatech points out, there is a particular trap for the unwary here because what needs to be done within the four month period in order to constitute timely service of the Claim Form is that it should, for example, be posted on the last day as opposed to being served by the last day, under the usual rules. See CPR 7.5(1). On the other hand service of the Particulars of Claim if by post is deemed to occur only two days after posting, – see CPR 6.26. Accordingly, if CPR 7.4(2) requires in the PCR context that the Particulars of Claim be served no later than the time required for service of the Claim Form, which is 7 days after issue, the Particulars of Claim must be posted only five days after issue, even though the Claim Form itself could be posted on the seventh day. However, even without that anomaly, the effect would be that the time for service of the Claim Form and the Particulars of Claim would be the same in all cases.

 

THE CLAIMANT’S LATE SERVICE OF THE PARTICULARS OF CLAIM AND RELIEF FROM SANCTIONS

The judge found that the claimant had served late in this case.  However it was an appropriate case to grant relief from sanctions.
    1. Having considered all of the above, and while the point is not free from difficulty, I take the view that the effect of Regulation 94(1) and CPR 7.4(2) is that the Particulars of Claim must be served within 7 days of the issue of the Claim Form. That is very tight but not impossible. In addition of course in many cases the relevant 30 day limitation period can and will be used, not merely to draft up a Claim Form but also the Particulars of Claim. The effect of that is that the Particulars of Claim here were indeed served 15 days late. They should have been served on 26 October which was the final date for service of the Claim Form. They were not and were not deemed to have been served until 10 November.
    1. It is against this backdrop that I then have to consider Altiatech’s retrospective application for an extension of time in which to serve the Particulars of Claim, to which I now turn.
The Extension Application
The Law
    1. As already noted above, initially the Authority took no point on the late service of the Particulars of Claim and originally was going to file a Defence by 23 December pursuant to an agreed extension. Its application to strike out and/or for summary judgment which included the point on late service of the Particulars of Claim was not served on Altiatech until 12 January. Altiatech then made its application for an extension on 27 January, so 15 days later. It is common ground that the application for an extension here should be determined according to Denton principles. However, in this context Altiatech contends that in relation to late service of those Particulars of Claim, in contrast, for example, to seeking an extension of time in which to serve a Claim Form, the late service is not always to be regarded as inherently serious and significant for the purpose of Denton stage 1.
    1. Here reliance is placed on the decision that Popplewell J, as he then was, in the case of Viridor Waste Management Ltd v Veolia ES Ltd [2015] EWHC 2321 (Comm). In that case the Particulars of Claim had been served one, two or three days late (it did not make a difference which it was for the purposes of the Judge).
    1. At paragraph 19 he said:
“It must be remembered although there are formal rules for service which are to be complied with, the ultimate purpose is to bring the relevant documents to the attention of the relevant person on the other side, in circumstances where the other person knows a procedural step has been taken…When one is assessing the significance of the default in complying with the letter of the rule involving service it is important to focus of the purpose of the rule. The significance of a default in complying with a rule or order as to service where what has happened nevertheless fulfils the purpose which underlies a rule or order will usually be small. The significance of the default is properly to be judge by reference to a delay measured in hours not in days. The default is not one which has any real impact on the court and the litigation or between the parties or the court. It does not impair with any further stages of the litigation. It has not in any significant respect disrupted the process, save as a result of the application, and the resistance to the application which has been made… It has had no significant impact on the course of this litigation and it has had no significant impact on other court users”
    1. Then at paragraph 23 the learned judge says:
“Ms Bingham QC argued that in relation to service of Particulars of Claim any delay is always serious and significant, even a delay of hours or indeed minutes. She submitted that this followed from the fact that there was a generous period permitted for service of Particulars of Claim following service of the Claim Form, after in the normal course, pre-action correspondence to comply with pre-action protocols; and given the fact, which she emphasised, that the Particulars of Claim are an important document in identifying the grounds of claim. Although it is right to say that Particulars of Claim are generally an important document, I regard the submission that any delay even of seconds or minutes must always be significant or serious as unrealistic and not in accordance with the clear guidance that has been given in Denton.”
    1. Then he says this:
“24…As I understand it, Ms Bingham’s argument is first an extension would be tantamount to extending the limitation period; and secondly that because Viridor left it until the last moment to issue the Claim Form and to serve the Particulars of Claim, any delay in the service of Particulars of Claim is significant because the claim was stale and comes after the expiry of the limitation period.
25. I cannot accept that these matters made the delay significant or serious. It is the issue of the Claim Form which stops the running of time for limitation purposes. Service of the Particulars of Claim is a subsequent step in the proceedings which does not validate or invalidate the effect of issue of the Claim Form for limitation purposes…”
    1. However, the Authority also prays in aid the tight timetable prescribed for procurement challenges, and it is true that in this context Coulson J said in Cemex the following at paragraphs 15 and 16:
“15 It should be noted that, in the context of procurement challenges, everything has to be done in accordance with a very tight timetable from first to last…An application for an extension of time to serve the particulars of claim which, on the facts of this case, would have the effect of delaying the service
of the particulars of claim by a minimum of seven weeks, must therefore be seen in the context of the required tight timetable in cases of this sort.
16 Perhaps for this reason, applications to extend time for the service of the particulars of claim in a procurement dispute are rare. In my view, given the other time constraints, it is certainly not the sort of application that this court should encourage. In addition, the new vigour with which relief from sanctions is now enforced should also serve to discourage such applications. In my view, in the present case, CEMEX embarked on a risky course when it chose to apply for more time to serve its pleading linked to the provision of extensive documents rather than doing the best it could on the information available to it.”
    1. However the context there was that the clamant sought an extension of time at the last minute, in fact on the day when the Particulars of Claim had to be served and it was a significant extension as Coulson J said, of at least 7 weeks. This was because it was meant to be until particular specific disclosure had been provided by the defendant. That is completely different from the circumstances of the extension sought retrospectively here.
    1. In Citysprint there were various questions concerning the time and mode of the Claim Form. Part of Fraser J’s judgment was to declare under CPR 3.10 that service of an unsealed Claim Form counted there as proper service. That meant it had been served in time. There was no need to consider an extension of time and therefore whether the exceptional reasons said to be necessary for an extension of time existed. The reason why they otherwise would have been required was in that context because of the effect of what is now Regulation 94(1) on the time for service of a claim form. The issue was the extent to which an extension of time to be granted under the CPR could affect the statutory time limit imposed by the PCR. That is not a matter which arises in the case before me.
    1. Fraser J then ultimately had to come to the question of the late service of the Particulars of Claim having regularised the service of the Claim Form, so that it did not break the 7 day time limit.
    1. In the rest of the paragraph 64 to which I have already referred he makes a reference to the retrospective extension of time. He says this:
“The claimants application also seeks a retrospective extension of time and/or relief from sanctions under 3.9 in respect of its late service of the Particulars of Claim. I do not consider relief from sanctions is relevant. An extension of time required. I accept that exceptional circumstances are required.”
    1. Then he goes on to deal with the facts. I have to say I am not sure that I entirely follow the reference to exceptional circumstances there, because unlike Regulation 94(1) (and as I have held above) that Regulation does not govern service of the Particulars of Claim, CPR 7.4 does. Further, it seems to me that the position where there is a retrospective application for an extension of time is governed essentially by Denton principles as both sides have agreed here. I cannot myself see why there should be an exceptional test gloss or overlay when one considers retrospective extensions of time for the service of the Particulars of Claim.
    1. In the event of course Fraser J actually granted the extension anyway, holding that there was a mistake by the court which led to or contributed to a two day delay in the service of the sealed Claim Form and the Particulars of Claim, and this did form part of the exceptional circumstances.
    1. In my view the correct approach is to apply the usual Denton principles. On the one hand I bear in mind what Popplewell J said in Viridor and I also bear in mind the counter-point about the need generally for a tight timetable in procurement cases.
Analysis
    1. I turn to the first Denton question, namely whether the delay of 15 days was serious or significant. Here I do not think that it was either. This is principally because the Authority itself did not seem to think it was, since it raised no point about the late service of the Particulars of Claim until 23 December (not seen by Altiatech until 12 January), even though the correct service date was 26 October, some two months earlier. Instead the Authority sought to obtain extensions of time. Mr Corran in his second witness statement says that nonetheless the delay prejudiced his client, first, because there was some unavailability of staff. But this was not mentioned at the time. Rather his letter of 23 November 2022 seeking the extension said only that his firm has just been instructed and he therefore needed 14 days.
    1. Mr Corran also referred to the uncertainty because of the application for a DOI. However, I do not see how late service of the Particulars of Claim contributed to that. Also, he referred to the amount of work needed for the Defence. However (1) that would be needed in any event, and (2) assuming that the Authority was correct on its strike-out application it could have saved itself that work by taking a point as to late service of the Particulars of Claim at the very start but chose not to do so. He also made reference to an accrued limitation defence but that is a bad point, – see the observations of Popplewell J in Viridor to which I have already referred.
    1. If I am wrong and the delay was serious and significant, for example, simply because of the mere number of days late, then in my view it was very much at the lower end of significant and seriousness.
    1. As to stage two, whether there is good reason for the default, Altiatech’s solicitor Mr Himdy frankly accepts that he misunderstood the time for service of the Particulars of Claim, notwithstanding the references to this as being 7 days from the date when the Claim Form had to be served in Cemex and in Citysprint. However, I think it is at least understandable why Mr Himdy took the view that he did. As I have already indicated the analysis of Regulation 94 and its impact on 7.4(2) is not straightforward. The Authority says that when Mr Himdy referred the Particulars of Claim to Counsel just before service for approval, Counsel must have mentioned the correct time limit to him. I am not prepared to speculate myself on that or on what Counsel’s view might have been. Indeed if one wishes to go down that road one could more strongly infer that the view of Weightmans was that a longer time limit applied, otherwise again, one questions why they did not take the point themselves at any stage after 26 October until 23 December.
    1. An error of law by a solicitor is generally not considered to amount to good reason. In this context, I was referred to Holterman v Electrium [2020] EWHC 3915 (TCC) at paragraph 77, although that was not a case about the operation of 7.4(2) in the context of Regulation 94 since it was not a procurement case. In any event the Particulars of Claim there were served 13 days late, and part of the strike-out application concerned that late service. In the event, the Judge did not strike out the claim and granted a retrospective extension of time.
    1. However, in this case, the reason for the default should, in my view, be given at least some weight when one considers the overall circumstances to which I now turn.
    1. As to the overall circumstances of the case, here I shall take into account that the application for relief was not made until 15 days after Altiatech had been appraised of what the Authority was contending. That is a fair point, although of course the strike-out application which had been made encompassed very much more than simply a point on the Particulars of Claim, and so Greystone was having to deal with a number of matters. There is no basis for saying, as the Authority does, that Altiatech’s application for relief was made 80 days late. That would assume it should have been made on or after 26 October, but that is completely unrealistic when for two months the Authority never took the point. Therefore, Altiatech could not have known that such a point was going to be taken, and which it did not know until 12 January.
    1. The Authority then says that Mr Himdy compounded the delay because he held off posting the Particulars of Claim for a day while he consulted Counsel. I see that, but in the overall scheme of things it is not material. On the other hand what I think might have enabled the whole action to have started much earlier is if the Authority had been open at the outset about the underlying reason for its actions, which I have dealt with above. Its reluctance to explain its position led to a delay of much more than 15 days in my view.
    1. Finally, not to grant relief from sanctions here where I upheld that the Claim Form had been served in time would in my judgment be grossly disproportionate because it would deprive Altiatech of a claim of some substance. I accept that in Holterman one fact taken into account by the Judge at stage three was that even if the strike out for late service of the Particulars of Claim was successful the claimant could simply start again as there was no limitation problem. I see that, although I think to an extent, this runs against the views of Popplewell J about the relevance of limitation in paragraph 25 of his judgment in Viridor.
    1. In any event the fact that if the relief is not granted the claimant would lose the entire claim is a point which a claimant can and does make here on the question of proportionality which I have just addressed. So Holterman does not really assist.
  1. Accordingly for all those reasons I would grant relief from sanctions here and extend the time for the service of the Particulars of Claim retrospectively.