FOUR IMPORTANT POINTS FOR THOSE HASTILY ISSUING PROCEEDINGS THIS WEEK

Twitter and other sources have been full of stories of solicitors issuing numerous proceedings to avoid the (wholly ridiculous) price hike next week.  There are a few things that should be borne in mind by all those who have issued but are not proposing to serve immediately.

1. ONCE YOU ISSUE YOU COULD COME BECOME LIABLE TO THE DEFENDANT’S COSTS (EVEN IF YOU DON’T SERVE)

This is what Master Bragge decided in Clydesdale Bank PLC -v- Kinleigh Folkard & Hayward.  The claimant issued proceedings but did not serve and the time for service of the claim form expired. The defendant made an application for costs which was granted.

“11. It is clear that section 51 of the Senior Courts Act 1981 gives the court power to order a party to pay another party’s costs of and incidental to proceedings. In this claim proceedings were indeed issued, and correspondence ensued of the type that I have described, where the respective positions were set out. In due course in fact it became clear that the claim, as far as the shortfall was concerned, was not by reason of the valuation that had been impugned, because, as it seems to me it is shown, the lender had recouped the position. Although it is true to say that the correspondence was in the style of preaction correspondence, it is, however, fundamental, as it seems to me, that it took place after proceedings were issued. It was not in fact pre-action correspondence of the type that was referred to on the first page of the protocol letter. The purpose of protocols, as explained in the heading in the Civil Procedure Rules at C1A-001, under the heading “Lord Woolf’s recommendations”, are to focus the attention of litigants on the desirability of resolving disputes without litigation and the other matters that are there set out. So, as it seems to me, this correspondence was not, in truth, pre-action correspondence, even though it may be said that some of it was indeed in the style of, or pursuant to, the protocol.

12. It seems to me that the trigger here is the question of the issue of the claim form, not the service of it. The correspondence refers to and proceeded, certainly after a certain date, on the basis that there would be cost consequences if there was not a settlement, i.e. correspondence to that effect from the Bank’s solicitors. This all points, as far as I can see in my assessment, to the fact that costs were clearly envisaged as something that were going to be a live issue.

13. It seems to me, therefore, that, in all these circumstances, it is right that I should accede to the defendant’s application. It seems to me here that justice really does favour the defendant getting its costs. It no doubt incurred some costs in dealing with the various matters that were put forward after the issue of the claim. Accordingly, I propose to make an order.”

(The case is available on Lawtel. There is a useful discussion by Kennedys, available here

2. THE DEFENDANT CAN ASK FOR SERVICE OF THE CLAIM FORM ONCE YOU HAVE ISSUED

There is a useful tweet from Marie-Louise King reminding everyone of the provisions of CPR 7.7.

“Application by defendant for service of claim form

(1) Where a claim form has been issued against a defendant, but has not yet been served on him, the defendant may serve a notice on the claimant requiring him to serve the claim form or discontinue the claim within a period specified in the notice.

(2) The period specified in a notice served under paragraph (1) must be at least 14 days after service of the notice.

(3) If the claimant fails to comply with the notice, the court may, on the application of the defendant –

(a) dismiss the claim; or

(b) make any other order it thinks just.”

3. REMEMBER TO SERVE ON TIME, AND AT THE RIGHT PLACE…

Cases on service of the claim form appear periodically in the reports (and thus on this blog). With so many actions being issued on a “protective” basis there is a very real danger that things could go wrong.  This is a good time to re-read Service of the Claim Form: What can possibly go wrong? Ten Simple Points to make Life Easier.

4. READ THE OTHER POSTS ON THIS BLOG THAT RELATE TO SERVICE

 

One comment

  1. You might also add the substantial additional costs potentially incurred by doing things in a rush and possibly at half cock. And the costs of sorting things out afterwards. And the potential sanctions for not complying with the protocol requirements. And this all supposes that you can find a court with an open counter service that will co-operate in the last minute issue process…

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