Change in the direction of judicial thinking since Lewis v Ward Hadaway

Published 11 October 2018

Atha & Co Solicitors v Zoe Liddle [2018] EWHC 1751 (QB)

In recent years, the issue of issuance of court proceedings with payment of a low court fee based on a low statement of value has emerged as a possible route for Defendants to seek summary judgment based on issues of abuse of process and limitation principles. This is a developing jurisdiction, as a recent case shows.

Facts

Ms Liddle had issued professional negligence proceedings against Atha & Co whom, she alleged, had been negligent in acting for her in a personal injury claim.

Mrs Liddle's claim against Atha & Co was received by the court on 29 March 2016, shortly before expiry of the primary limitation period, but the proceedings were not issued until 7 April 2016, which was after the expiry of the primary limitation period.

The statement of value on the Claim Form said that the claim was valued at between £10,000 and £25,000. This was supported by a statement of truth signed by Ms Liddle's solicitor. The corresponding court fee of £1,250 was paid.

Atha & Co suspected that the value of the claim had been deliberately misstated to avoid paying a much higher court fee. They made a formal offer to settle the claim in the sum of £25,000 plus costs. This was rejected; it was clear that the claim was in fact valued in the hundreds of thousands of pounds.

Atha & Co applied for strike out, on the basis that the undervaluing of the claim amounted to an abuse of the process of the court, and also sought summary judgment on limitation grounds on the basis that the 'appropriate fee' had not been paid at the time of issuance, such that the ordinary rule that a claim is "brought" when the claim form is delivered to the court office did not apply.

At first instance in the Middlesborough County Court, the parties had agreed that if there had been an abuse of process, the summary judgment element of the application would succeed since it would follow that the appropriate fee had not been paid. At first instance, the court held that the statement of value did not in this case amount to an abuse of process, so the applications for strike out and summary judgment failed. Atha & Co appealed to the High Court.

Decision

1. Abuse of process
   
   The judge held that Ms Liddle's solicitor's conduct was an abuse of process. The ordinary and proper use of the court process when providing the statement of value on a claim form involved the recording of the "unvarnished truth". Deliberately departing from this ordinary and proper use for tactical reasons could never be justified. However, the abuse in this case did not justify striking out the claim.
   
   
2. Limitation
   
   The judge then considered whether the claim had been "brought" within the limitation period. As set out above, it had initially been accepted by the parties that if the "appropriate fee" had not been paid when lodging the Claim Form at court, the claim had not been brought. This followed previous High Court decisions in Page v Hewetts (no. 2) and Lewis & others v Ward Hadaway, both of which referred to the Court of Appeal's decision in Page v Hewetts (no. 1). During the hearing of the appeal, however, the judge indicated that he had concerns in respect of these decisions and the appeal was adjourned so that the parties could expand their arguments to address this.
   
   In his judgment, the judge observed that the question of what was the "appropriate fee" was not considered in Page v Hewetts. In that case, it was clear that the wrong fee had been paid, and that was what caused the court's delay in issuing proceedings. By contrast, in Lewis, the delay in the court issuing proceedings was not attributable to the wrong fee having been paid - the nature of the abuse of process was such that the court would not notice that the wrong fee was paid.
   
   Having considered a series of other first instance decisions which he found to be "not entirely consistent", the judge held that it was not the case that a party had to have done "all in its power to do [to] get the court fee correct as a prerequisite to the bringing of a claim even where such discrepancy has had no impact whatsoever upon the timing of the issue of the claim form." The judge declined to follow Lewis and held, in effect, that as long as the court fee is commensurate with the value stated on the Claim Form, a claimant has done enough for the risk of late issuance to fall to the court.
   
   Such delay as there was in the issuing of the claim form was entirely unconnected with the abuse and the abuse was not sufficiently egregious to justify strike out. Therefore, despite the claimant's solicitor's abuse of the process of the court, the claim was brought for limitation purposes at the time the claim form was received by the court and not when it was later issued. The defendant was not entitled to summary judgment, and the appeal was dismissed.

Comment

This decision reflects a change in direction of judicial thinking since the decision in Lewis v Ward Hadaway(2015), in which DAC Beachcroft acted for the defendant in successfully striking out multiple claims. There, the judge also held that claimants' conduct in deliberately understating the value of their claims was an abuse of process. Whilst, again, the abuse was not considered sufficiently serious to justify striking out a greater number of claims, the judge held in Lewis that the 'appropriate fee' had not been paid in time with the consequence that a number of claims had not been 'brought' before expiry of the relevant limitation periods, so summary judgment was granted. Subsequent decisions have expressed some misgivings over this "hard edged principle".

In this case, the judge acknowledged that "the proliferation of irreconcilable first instance decisions over the last few years is such that the time is now ripe for authoritative guidance from the Court of Appeal". We understand that an appeal to the Court of Appeal has indeed been made, and litigators will await the outcome with interest. Until then, we are left with some uncertainty over when a claim will be taken as having been "brought" for limitation purposes where the correct fee has not been paid. It seems likely that a more indulgent approach will be adopted in future where it can be shown that the delay is entirely unconnected with the abuse. The court of course retains the power to strike out any claim in the event that the abuse is "sufficiently egregious"; however, since that threshold was not reached even in the systematic abuse identified in Lewis, it appears clear that that power will be used sparingly.

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