DELAY AND STRIKING OUT FOR ABUSE OF PROCESS: SOME INTERESTING LESSONS

The judgment of Master Bowles in Solland International Ltd -v- Clifford Harris & Co [2015] EWHC 2018 (Ch) contains several matters of interest to litigators. Not only the fact that the action was struck out but some of the allegations made in the underlying action. The central point, however, is that a failure to progress the action for 31 months amounted, on the facts of this case, to an abuse of process.

“It seems to me to be wholly fair that litigants who, having started litigation, elect to allow that litigation to sink into indefinite abeyance, who have had no serious and settled intent to pursue that litigation and who have, in consequence, acted, in respect of that litigation, in knowing disregard of their obligation to the court and to the opposing party, should not be allowed to carry out with litigation conducted in that manner. It is equally fair that the opposing party, faced with litigation carried on in this fashion, should not be expected to have to continue to meet such litigation.

THE CASE

The claimants were bringing an action against their former solicitors alleging negligence in the conduct of litigation.

THE ALLEGATION THAT INADEQUATE WITNESS STATEMENTS WERE TAKEN IN THE INITIAL ACTION

This is, to a large extent, a side issue. However it serves as a reminder that litigants (particularly litigants who have been cross-examined and whose evidence is not accepted) can blame their own lawyers for the inadequate nature of the witness evidence.

Several of the complaints in the action related to:

  • A failure to take early witness statements.
  • A failure to consider a witness statement of a witness which had been taken by the claimants themselves. That statement was exchanged and the differences in accounts had a major impact on credibility.
  • A failure to take statements early.

There was also an allegation that the defendant advised the claimants that, in the original action, that the other party would not take their case to trial. This led to settlement offers being refused (those offers being substantially less than the damages eventually awarded).

(It should be said that all of these matters were denied by the defendant solicitors).

THE DELAY IN FILING THE ALLOCATION QUESTIONNAIRE IN THE ACTION AGAINST THE SOLICITORS

In any event these allegations will never be tested.  The claimants were due to file an allocation questionnaire in April 2012. The court failed to notice this failure and the matter was left in abeyance until the 13th August 2014 when the defendants applied to strike out. This led to the claimants filing their allocation questionnaire in November 2014 and applying for relief from sanctions.

THE DELAY IN FILING THE QUESTIONNAIRE DID NOT GIVE RISE TO A SANCTION

The Master held that the failure to file a completed allocation questionnaire did not give rise to a sanction in itself.  CPR 26.5(5) gives the court a complete discretion as to what, if any, sanction to apply or make any direction it thought fit.

“It seems to me that, where, as here, express sanctions are provided for, albeit that the sanctions are in the broad gift of the court, there can be no room for an implied sanction. The rules make provision for what is to occur arising from default.”

Where no sanctions is prospectively applied by way of rule, order or practice direction, CPR 3.9 is not brought into play.

THE APPROPRIATE TEST

The Master held that the appropriate test was:

  • To assess the impact of the delay occasioned by the breach in question in the context of all, or any, of the delays in the pursuit of the claim upon the prospects of a fair trial.
  • If the court concludes that a fair trial or fair disposal is no longer possible and that the delay occasioned by the breach has contributed to that and that the party responsible for that then the action should be stuck out.
  • The court had to take into account that the CPR meant that there was a duty on the parties to cooperate and not to let “sleeping dogs lies” .
  • Further the court should not be too ready to infer that a fair trial is not possible.

AN ABUSE OF PROCESS

The Master held that the only sensible inference from the Claimants’ failures is that they had no settled intention to pursue the claim. In conducting themselves in this way they were abusing the process of the court, having no intention to pursue the matter to trial.

“What can and must also be said is that, in taking no active steps between April 2012 and, eventually, November 2014 to pursue their Claim, the Claimants acted in knowing and total disregard of the rules and of the requirements of modern litigation.”

The sole effective question arising from the abuse of process was whether the proper and proportionate sanction for that abuse should that the Claim is struck out or some lesser sanction imposed.

The Master held that the Claimants’ conduct led to the conclusion that would be unwilling participants in the trial process and it was appropriate for the action to be struck out.

“It seems to me to be wholly fair that litigants who, having started litigation, elect to allow that litigation to sink into indefinite abeyance, who have had no serious and settled intent to pursue that litigation and who have, in consequence, acted, in respect of that litigation, in knowing disregard of their obligation to the court and to the opposing party, should not be allowed to carry out with litigation conducted in that manner. It is equally fair that the opposing party, faced with litigation carried on in this fashion, should not be expected to have to continue to meet such litigation.

Having regard to

  • The overriding objective in its current form.
  • The court’s duty to exercise its power in such manner as to enforce compliance with the rules

the court would not be fulfilling its duty if it imposed a lesser sanction than striking out:

“… any other order would, in all the circumstances, be contrary to the due administration of civil justice.”

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