EXTENSION OF TIME FOR SERVICE OF THE CLAIM FORM SET ASIDE: A CASE ALL CLAIMANTS SHOULD KNOW

A really easy way for a claimant lawyer to get sued is to hold onto the claim form. Cases relating to late or mis-service of the claim form are a regular feature of this blog.  It is equally dangerous for a claimant to assume that obtaining an extension of time for service means that they are out of danger. The decision of Mrs Justice Cox DBE today in Foran -v- Secret Surgery Ltd [2016] EWHC 1029 (QB) exemplifies the dangers of a claimant not serving promptly.

“The time limits within the CPR, having the legitimate aim of the good administration of justice, should always be adhered to unless there is good reason. Service of the claim form is an important step in litigation, in particular in cases where there is a potential limitation defence”

KEY POINTS

  • An order granting an extension of time for service of the claim form was set aside.
  • The claimant had failed to show a “good reason” as required by the rules.
  • A claimant making an application for an extension must set out the evidence in support in some detail and satisfy the court, by that evidence, that there is a good reason for the failure to serve within the relevant period.
  • The fact that there were difficulties in serving a defendant domiciled abroad does not, of itself, represent a good reason. The time for service  of  such  a defendant is extended by the rules to six months to allow for such difficulties.

THE CASE

The claimant was bringing an action for clinical negligence against a number of defendants, three of which were domiciled in Poland. Proceedings were issued on the 6th May 2015 and served on the first defendant (who was domiciled in England) on the 2nd September 2015.

The claimant had six months to serve the 2nd – 4th defendants, which took them to the 6th November 2015. On the 29th October 2015 the claimant issued an application for an extension of time. The application was stated to be ex parte. On the 9th November 2015 Master Roberts made an order

1. Extension of time to file and serve Claim Form and Particulars of Claim until 11.01.16 or further order.
2. Hearing: 11.01.16 at 12:30pm; Room E118; time estimate 30 minutes.
3. Parties do email Master Roberts in Word format the draft Orders by 7.01.16.

This notice was never served on the defendants, indeed it was only served the day before the hearing of the appeal.  At the hearing that took place on the 11th January 2016 neither advocate attending was aware that the order had been made.

The hearing that took place on the 11th January 2016 proceeded as an inter partes hearing. The Master found that the claimant had taken reasonable steps to serve the 2nd – 4th defendants and granted an extension of time for service.

THE APPEAL: CONSIDERATION OF THE LAW
  1. CPR 7.5(2) makes provision for service of a claim form both within and outside the jurisdiction. The rule relating to service outside the jurisdiction is expressed in mandatory terms:
(2) Where the claim form is to be served out of the jurisdiction, the claim form must be served in accordance with Section IV of Part 6 within 6 months of the date of issue.
  1. CPR 7.6, dealing with the extension of time, provides:
Extension of time for serving a claim form
7.6-(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 the 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 by that order.
(3) If the claimant applies for an order to extend the time for compliance after the end of the period specified by rule 7.5 or by an order made under this rule, the court may make such an order only if-
(a) the court has failed to serve the claim form; or
(b) the claimant has taken all reasonable steps to comply with rule 7.5 but has been unable to do so; and
(c) in either case, the claimant has acted promptly in making the application.
(4) An application for an order extending the time for compliance with rule 7.5 –
(a) must be supported by evidence; and
(b) may be made without notice.
  1. As is well known CPR 7.6 has generated a great deal of litigation, but the relevant legal principles governing the Court’s approach to an application under CPR 7.6(2) are to be found in the judgments of the Court of Appeal in Hashtroodi v Hancock [2004] EWCA Civ 652; Collier v Williams[2006] EWCA Civ 20 and Bayat v Cecil [2011] EWCA Civ 135.
  2. In Hashtroodi the Court noted the striking contrast between CPR 7.6(2) and the preconditions in 7.6(3), which showed that it was not intended to impose any threshold condition on the right to apply for an extension of time under CPR 7.6(2). The discretion should therefore be exercised having regard to the overriding objective. Nevertheless, in exercising that discretion the Court said as follows at paragraphs 18 – 20:
“18. … We have no doubt what it will always be relevant for the court to determine and evaluate the reason why the claimant did not serve the claim form within the specified period. This has nothing to do with the fact that under the former procedural code, the threshold requirement was that the plaintiff should show good reason. It is because the overriding objective is that of enabling the court to deal with cases ‘justly’, and it is not possible to deal with an application for an extension of time under CPR 7.6(2) justly without knowing why the claimant has failed to serve the claim form within the specified period. As a matter of commonsense, the court will always want to know why the claim form was not served within the specified period. As Mr Zuckerman says at para 4.121 [Adrian Zuckerman: Civil Procedure] …

‘For it is only fair to ask whether the applicant is seeking the court’s help to overcome a genuine problem that he has encountered in carrying out service or whether he is seeking relief from the consequences of his own neglect. A claimant who has experienced difficulty should normally be entitled to the court’s help, but an applicant who has merely left service too late is not entitled to as much consideration. Whether the limitation period has expired is also of considerable importance. If an extension is sought beyond four months after the expiry of the limitation period, the claimant is effectively asking the court to disturb a defendant who is by now entitled to assume that his rights can no longer be disputed.”

19. Whereas under the previous law, a plaintiff who was unable to show a good reason for not serving in time failed at the threshold, under the CPR, a more calibrated approach is to be adopted. If there is a very good reason for the failure to serve the claim form within the specified period, then an extension of time will usually be granted. Thus, where the court has been unable to serve the claim form or the claimant has taken all reasonable steps to serve the claim form, but has been unable to do so (the CPR 7.6(3) conditions), the court will have no difficulty in deciding that there is a very good reason for the failure to serve. The weaker the reason, the more likely the court will be to refuse to grant the extension.
20. If the reason why the claimant has not served the claim form within the specified period is that he (or his legal representative) simply overlooked the matter, that will be a strong reason for the court refusing to grant an extension of time for service. One of the important aims of the Woolf reforms was to introduce more discipline into the conduct of civil litigation. One of the ways of achieving this is to insist that time limits be adhered to unless there is good reason for a departure. In Biguzzi, Lord Woolf a said at p 1933D:

‘If the court were to ignore delays which occur, then undoubtedly there will be a return to the previous culture of regarding time limits as being unimportant.'”

  1. In the context of a three-year limitation period for personal injury claims the Court noted that the time limits in CPR 7.5. were already generous. Moreover they pointed out (at para 21) that “… the claim form does not have to contain full details of the claim. All that is required is a concise statement of the nature of the claim: see CPR 16.2(1)(a).”
  2. On the facts the Court considered that there was no reason in that case for the failure to serve in time other than the incompetence of the claimant’s legal representatives, which was said to be “… a powerful reason for refusing to grant an extension of time.” The solicitors’ failures were found to be “particularly egregious” and the Court were in no doubt that there should be no extension of time for service of the claim form.
  3. In Collier the Court heard a number of conjoined appeals, in which one of the questions to be determined was whether the guidance given inHashtroodi was being properly applied. The Court repeated (at para 87) the relevance of the CPR 7.6(3) requirements to the exercise of the discretion under 7.6(2):
“87. When deciding whether to grant an extension of time under CPR 7.6(2), the court is required to consider how good a reason there was for the failure to serve in time (assuming that the application is dealt with after the end of the 4 months period): the stronger the reason, the more likely the court will be to extend time; and the weaker the reason, the less likely. This involves making a judgment about the reason why service has not been effected within the 4 months period. It is a more subtle exercise than that required under CPR 7.6(3) which provides that unless all reasonable steps have been taken, the court cannot extend time.”
  1. They emphasised in other passages (see paras 100 and 131) that service of the claim form is “a crucial step in the proceedings”, the rules being designed to ensure that so far as possible the claim form is brought to the attention of the Defendant and, where he is represented, his legal representatives. The critical task for the Court in these cases is “to determine and evaluate the reason why the Claimant did not serve the claim form within the specified period.” Awaiting receipt of an accountant’s report was held not to be a good reason for delaying service of the claim form, as opposed to service of the particulars of claim, for which a separate application should be made to the Court.
  2. In Hoddinott v Persimmon Homes (Wessex) Ltd [2007] EWCA Civ 1203, the Court of Appeal explained the importance of service of the claim form in these terms at paragraphs 54 – 55:
“54. … But service of the claim form serves three purposes. The first is to notify the defendant that the claimant has embarked on the formal process of litigation and to inform him of the nature of the claim. The second is to enable the defendant to participate in the process and have some say in the way in which the claim is prosecuted: until he has been served, the defendant may know that proceedings are likely to be issued, but he does not know for certain and he can do nothing to move things along. The third is to enable the court to control the litigation process. If extensions of time for serving pleadings or taking other steps are justified, they will be granted by the court. But until the claim form is served, the court has no part to play in the proceedings. A key element of the Woolf reforms was to entrust the court with far more control over proceedings than it had exercised under the previous regime. The rules must be applied so as to give effect to the overriding objective: this includes dealing with a case so as to ensure so far as is practicable that cases are dealt with expeditiously and fairly (CPR 1.1(1)(d)). That is why the court is unlikely to grant and extension of time for service of the claim form under CPR 7.6(2) if no good reason has been shown for the failure to serve within the 4 months’ period.
55. Thus, there are good reasons why the court should scrutinise with care applications to grant an extension of time for service of the claim form. …”
  1. More recently in Bayat v Cecil the Court of Appeal considered CPR 7.6 in the context of a commercial dispute. In a high value contract claim an application for a six month extension of time for service of the claim form had been made and granted before the four month period had expired, on the basis that the Claimant needed time to secure funding for the claim. During the six month extension granted, during which the limitation period expired, the Claimant applied for and was granted a further six months extension. The Court of Appeal upheld the Defendant’s appeal and ruled that the extensions should be set aside.
  2. Sir Stanley Burnton, acknowledging the generous width of the discretion under CPR 7.6(2), referred to the dicta in Hoddinott set out above and held that the Claimants should have served the claim form within the period of its initial validity. If they were in financial difficulties they should have issued an application for a stay, or for an extension of time for the necessary procedural steps to be taken, which would have been matters for case management by the Court after the claim form had been served. It was not for the Claimants unilaterally to decide to postpone the service of the claim form. Hashtroodi was a case in which the Claimant’s solicitor had been negligent. In general, an extension of time is not justified where its need is due to the negligence of those acting for the Claimant. However, at paragraph 44 he said that “… it does not follow that an extension is necessarily to be granted in a limitation case where those acting for the Claimant have acted competently.”
  3. In relation to limitation Sir Stanley said as follows at paragraphs 48 and 50:
“48. CPR r 7.6(3) differs from CPR r 7.6(2) in an important respect. If an application for an extension of time is made after the expiration of the validity of the claim form, the court has no discretion to exercise in favour of the claimant unless, in a case in which the claimant was to serve it, he ‘has taken all reasonable steps’ to serve within the period of its validity but has been unable to do so. It would to my mind be curious if any different test may be applied to an application for an extension of time made within the period of the validity of the claim form in a case in which the limitation defence of the defendant will be or may be prejudiced. At the very least, even if he has not taken all reasonable steps, the claimant should have to show that he has taken reasonable steps. I refer to what Rix LJ recently said in his judgment in Aktas v Adepta [2010] EWCA Civ 1170 with which the other members of the Court agreed:

91. The reason why failure to serve in time has always been dealt with strictly (even if CPR 7.6(3) represents a still further tightening of the rules where a retrospective request for an extension is made out of time) is in my judgment bound up with the fact that in England, unlike (all or most) civil law jurisdictions, proceedings are commenced when issued and not when served. However, it is not until service that a defendant has been given proper notice of the proceedings in question. Therefore, the additional time between issue and service is, in a way, an extension of the limitation period. A claimant can issue proceedings on the last day of the limitation period and can still, whatever risks he takes in doing so, enjoy a further four month period until service, and his proceedings will still be in time. In such a system, it is important therefore that the courts strictly regulate the period granted for service. If it were otherwise, the statutory limitation period could be made elastic at the whim or sloppiness of the claimant or his solicitors. For the same reason, the argument that if late service were not permitted, the claimant would lose his claim, because it would become time barred, becomes a barren excuse. But even where the claimant is well within the limitation period despite his delay in serving, there is a clear public interest in the rules and the courts curtailing the efficacy of a claim form which, because it has not been served, is not very different from an unposted letter. Therefore, the strictness with which the time for service is supervised has entirely valid public interest underpinnings which are quite separate from the doctrine of abuse of process. It is sufficient for the rules to provide for service within a specified time and for the courts to require claimants to adhere strictly to that time limit or else timeously provide a good reason for some dispensation.

50. Hoddinott is authority for the proposition that the court may grant an extension of time under CPR r 7.6(2) even where there is no good reason for failing to serve in the period of validity of the claim form. However, it was a case in which there was no question of a limitation defence being prejudiced by the extension: as remarked in paragraph 54 of the judgment, the claimant could have issued a new claim form. It was also a case in which the defendant had been made aware of the proceedings, since it had been sent a copy of the claim form. It required those two facts to justify the extension granted by the Court of Appeal. Neither was applicable in the present case.”
  1. The Judge below was criticised in that case for not weighing in the balance the Defendant’s loss of their limitation defence. While the extension in question was only just outside the extended period, Sir Stanley observed (paras 54-55) that “… in the law of limitation, a miss is as good as a mile. Furthermore, the primary question in a case where limitation is engaged is … whether, if an extension of time is granted, the Defendant will or may be deprived of a limitation defence.” While it is relevant “… that the effect of a refusal to extend time for service of the claim form will deprive the Claimant of what may be a good claim … the stronger the claim, more important is the defendant’s limitation defence, which should not be circumvented by an extension of time for serving a claim form save in exceptional circumstances.”
  2. Rix LJ, agreeing with his judgment, observed that the strictness with which the jurisdiction to extend time is viewed is of general application. On the facts of the case, posing the question whether the Claimant’s reason for wanting successive extensions of time could be said to be a good reason, he concluded as follows:
“91. … Since a limitation period expired in November 2008, during the period of the first extension (from September 2008 to March 2009), an especially good reason would, in my judgment, on Dyson LJ’s calibrated approach, be required. The reports are not replete with examples, at any rate where the claimant has not established a real problem in carrying out service.”
APPLYING THOSE PRINCIPLES TO THE CURRENT CASE
  1. Mr Norman distilled the grounds of appeal advanced in the Appellant’s Notice into the following submissions. First, on the limited evidence before the Master no good reason was provided by the Claimant’s solicitors for their failure to serve the claim form within the prescribed period, and the Master was wrong to grant the extensions of time. Merely explaining why the application was being made, which is effectively all that Ms Wolfe did in her statement, does not amount to showing a good reason for the delay in serving the claim form, upon which the Master needed to focus and which he failed properly to consider. Secondly the expiry of the limitation period and the loss of the Defendants’ potential limitation defence was an important factor in the necessary balancing exercise and the Master erred in failing to consider it, and in misdirecting himself that the application for an extension of time in this case was made within the limitation period.
  2. Ms Prager carefully sought to distinguish the facts of this case from those of the cases referred to above, in which the Court of Appeal gave guidance as to the correct approach to applications under CPR 7.6(2). She submitted essentially that in the present case the foreign element, the difficulties with translators, and the involvement of the Foreign Process Section and Polish agents all combined to render this a case outside the norm and to amount to a good reason for the request for an extension of time to be granted.
  3. The difficulty with these submissions is, first, that the factual differences between cases do not assist, since the guidance provided by the Court of Appeal is clearly of general application; and secondly, that the factors being relied upon by Ms Prager were, in my judgement, either inadequately explained in Ms Wolfe’s evidence, or omitted altogether. When the Court is considering whether to grant an extension of time under CPR 7.6(2) each case will naturally turn on its own facts, but those facts must be properly evidenced and carefully scrutinised.
  4. The time limits within the CPR, having the legitimate aim of the good administration of justice, should always be adhered to unless there is good reason. Service of the claim form is an important step in litigation, in particular in cases where there is a potential limitation defence. The six month period allowed for service out of the jurisdiction seems to me to take into account difficulties of the kind that Ms Prager referred to, and that might be expected to be encountered by solicitors who are seeking to effect service in such circumstances. It is in my view a generous provision.
  5. Applications under CPR 7.6(2) for an extension of time and the evidence provided in support should therefore be scrutinised with care. Practice Direction 7A provides, at paragraph 8, that the evidence filed in support should state all the circumstances relied on, and provide a full explanation as to why the claim has not been served.
  6. In a case where the limitation period expired almost six months before the application for an extension of time was made, I consider that Ms Wolfe’s evidence fails that test. Her statement contains a far from full explanation of the reasons for the delay in this case. Ms Prager realistically acknowledged in her submissions that the statement was not as full as it could be, but she submitted that its contents were nevertheless sufficient to permit the Master to exercise his discretion in favour of granting the application.
  7. I do not agree. Notwithstanding Ms Prager’s able submissions as to the sufficiency of the evidence before the Master and the discretion afforded to him under CPR 7.6(2), I am in no doubt in this case, applying the approach required by the appellate authorities, that the Master’s decision to grant the extensions of time, initially on 9 November and then on 11 January, was wrong.
  8. Ms Wolfe’s statement was brief and no relevant correspondence or other documentary evidence was exhibited to it. The timetable of events was set out but insufficient explanation was provided as to how that timetable demonstrated a good reason for the delays that are manifest on an analysis of its contents. The matters described by the Master in paragraphs 16 – 17 of his judgment as amounting to valid reasons for an extension of time, merely recite the timetable without further analysis or evaluation of what seem to me to be some obvious omissions. It is no answer to say, as Ms Prager does, that the case was unusual and complex due to the foreign element and associated factors, because it was those same factors that necessitated a more urgent approach to addressing the likely problems with service out of the jurisdiction than is evidenced in Ms Wolfe’s statement.
  9. I reject without hesitation any suggestion that there was wilful disregard of the rules by the Claimant’s solicitors, and Mr Norman did not suggest that there was a deliberate flouting of the rules. Rather he submits that there appears to have been an active decision not to serve the claim form. Nor do I express any view, on the available evidence, as to the competence of her solicitors in addressing the difficulties that arose. Ultimately the question for the Master was whether a good reason had been shown on the evidence before him for granting the extension of time. In my judgment the evidence provided in support of the application fell short of what was required to permit a finding in the Claimant’s favour.
  10. In this case the Claimant’s solicitors were already perilously close to the expiry of the limitation period when they sent the detailed Letter before Claim, in English, to all the Polish Defendants, one of whom (the insurance company) was incorrectly identified. They knew from 6 May, when protective proceedings were issued, that there was a need to serve the claim form out of the jurisdiction by 6 November at the latest. Problems of the kind that arose could have been anticipated at a much earlier stage. The brief account provided by Ms Wolfe indicates a somewhat leisurely approach to the likely problems and, if more was done than is there set out, it should have been deposed to.
  11. There is no evidence, for example, as to what enquiries were made, if any, with the Claimant’s Polish lawyer as to the process for service in Poland. The first time that enquiries were made with the Foreign Process Section appears to be on 21 September, more than four months after the protective proceedings were issued. There is no evidence as to what, if any, discussions were held with the Foreign Process Section or the Polish agents as to whether or how matters could be expedited because of the need urgently to serve the claim form. There is no account of what, if anything, was done to speed up the translation process or indeed the process for service.
  12. Ms Wolfe does not in fact refer in her evidence to any problems and delays in obtaining the medical report, although Ms Prager referred to these in her submissions and the Master clearly took them into account in coming to his decision. If, as it appears, an active decision was taken by the solicitors not to serve the claim form on any Defendant until a medical report was available, that would not in any event amount to a good reason for failing to serve the claim form in time (see Collier above). Ms Prager submitted, although there is no evidence about it, that it was probably considered to be more helpful to the Defendants for them to have detailed particulars of claim and supporting documents served along with the claim form all in one go. On the authorities, however, that is not a satisfactory reason for failure to serve the claim form. Problems with experts and delay in providing the medical report should be the subject of separate application to the Court for case management directions, if necessary, subsequent to service of the claim form.
  13. Further, I accept Mr Norman’s submission that the Master did not address and weigh in the balance the loss to the Defendants of their potential limitation defence in this case. There is no dispute that he erred in stating that the application for an extension of time in this case was made within the limitation period. Ms Prager nobly suggested that she may have misled the Master in making her submissions as to limitation. But his apparent belief that the limitation period had not expired because the extension of time had been sought within the life of the claim form, itself issued within the limitation period, was in error as Ms Prager accepts. The Master’s reasons for distinguishing Bayat were therefore also in error.
  14. For all these reasons in my judgment the Master’s decision was wrong and cannot stand. The Defendants’ appeal is therefore allowed.”

 

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