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Commercial Barristers deal with a number of areas of law relevant to businesses including Company, Finance, Tax, Insolvency and Property Litigation. A Commercial Litigation specialist can assist by helping to meet your particular legal advisory requirements. Litigation Lawyers help clients who are defending and pursuing claims. Get in contact with a Commercial Barrister as soon as you can.

A Barrister can deal with Commercial legal work and it is particularly useful when he or she is authorised to conduct litigation.

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Article: Relief from sanctions and the law applicable to failing to serve a sealed claim form on a Defendant

Our Commercial Barrister provided advocacy in a Litigation matter for C (a Claimant) for an application in a fast track matter, where the claim was at risk of being struck out, in a case where D1 (a Defendant) was an insured

driver and D2 was D1’s insurer. There had been failure to serve a sealed claim form on D2. On this occasion having pursued a number of arguments in both skeleton and oral submissions, the court dispensed with service of the unsealed claim form on D2 on the basis that although it had not been served on the insurer defendant who was sent an unsealed version by the court, it had been served on the insured. The litigation was able to proceed.

 

In this article our Commercial Barrister will outline the law which applies to service in litigation the possibility of extending time for service of a sealed claim form and the options for remedying matters.

 

The Law: Litigation

In Hills Contractors & Construction Ltd v Struth & Anor [2013] EWHC 1693 it was held “it   is  the document issued and sealed by the court which is the relevant claim form. subject to exceptions in relation to electronic communications “fax or other means of electronic communication under CPR 6.3(1)(d) in accordance with Practice Direction 6A”.

“Service of the claim form

38.The first question raised on the claimant’s application is whether the photocopy of the sealed claim form enclosed with Prettys’ letter of 23 January 2013 was a “claim form” within the meaning of the CPR.

39.Under CPR7.2 (1) “Proceedings are started when the court issues a claim form at the request of the Claimant” and under CPR 2.6(1) “the Court must seal the following documents on issue- the claim form ….”

40.In my judgment the effect of those two rules is that, as a general rule, a claim form is the document issued by the court on which the court seal is placed. When therefore CPR6.3(1) states that “A claim form may… be served by any of the following methods…”, I consider that, again as a general rule, it is the document issued and sealed by the court which is the relevant claim form.

41.There are clearly exceptions. When a claim form is served by fax or other means of electronic communication under CPR 6.3(1)(d) in accordance with Practice Direction 6A then necessarily there is not service of the original document issued and sealed by the court. In such circumstances the hard or soft copy of the fax or the soft copy or print out of the attachment to an e-mail is the document served but in each case the hard or soft copy represents a copy of the claim form issued and sealed by the court. Practice Direction 6A at paragraph 4.3 states “Where a document is served by electronic means, the parties serving the document need not in addition send or deliver a hard copy.” In the absence of that Practice Direction the parties serving a claim form by fax or other electronic means would have had to serve, in addition, a hard copy of the claim form as issued and sealed by the court.”

In Civil litigation if the Claimant asks the court to serve the claim form and the court served an unsealed version, the Claimant, if they wish to pursue the Claim, are under a duty to seek rectification of this issue or litigation will not be able to progress.

Service in Litigation

Service generally as you may be aware is covered under CPR 6.

“CPR Part 6

‘SERVICE OF THE CLAIM FORM IN THE JURISDICTION OR IN SPECIFIED CIRCUMSTANCES WITHIN THE EEA

Methods of service

6.3

(1) A claim form may (subject to Section IV of this Part and the rules in this Section relating to service out of the jurisdiction on solicitors, European Lawyers and parties) be served by any of the following methods –

(a) personal service in accordance with rule 6.5;

(b) first class post, document exchange or other service which provides for delivery on the next business day, in accordance with Practice Direction 6A;

(c) leaving it at a place specified in rule 6.7, 6.8, 6.9 or 6.10;

(d) fax or other means of electronic communication in accordance with Practice Direction 6A; or

(e) any method authorised by the court under rule 6.15.

(2) A company may be served –

(a) by any method permitted under this Part; or

(b) by any of the methods of service permitted under the Companies Act 2006 2.

(3) A limited liability partnership may be served –

(a) by any method permitted under this Part; or

(b) by any of the methods of service permitted under the Companies Act 2006 3. as applied with modification by regulations made under the Limited Liability Partnerships Act 2000 4..”

This article however is focused on who is serving the form and whether a version sealed by the court is being served or unsealed the latter technically not being in compliance with the rules.

As you can see below in CPR 6.4, generally it is the court who serves the claim form subjectto exceptions.

“Who is to serve the claim form

6.4

(1) Subject to Section IV of this Part and the rules in this Section relating to service out of the jurisdiction on solicitors, European Lawyers and parties, the court will serve the claim form except where –

(a) a rule or practice direction provides that the claimant must serve it;

(b) the claimant notifies the court that the claimant wishes to serve it; or

(c) the court orders or directs otherwise.

(2) Where the court is to serve the claim form, it is for the court to decide which method of service is to be used.

(3) Where the court is to serve the claim form, the claimant must, in addition to filing a copy for the court, provide a copy for each defendant to be served.”

If a Claimant has not served a claim form on time i.e. by 12.00 midnight on the calendar day within four months after the date of issue of the claim form as per CPR 7.5.

they can apply for an extension per CPR 7.6.

“CPR 7.6

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.

Commercial Law

Service of a claim form

7.5

(1) Where the claim form is served within the jurisdiction, the claimant must complete the step required by the following table in relation to the particular method of service chosen, before 12.00 midnight on the calendar day four months after the date of issue of the

claim form.

Method of service

Step required

First class post, document exchange or other service which provides for delivery on the

next business day   Posting, leaving with, delivering to or collection by the relevant service provider

Delivery of the document to or leaving it at the relevant place     Delivering to or leaving

the document at the relevant place

Personal service under rule 6.5

Completing the relevant step required by rule 6.5(3)

Fax    Completing the transmission of the fax

Other electronic method    Sending the e-mail or other electronic transmission

(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.”

Another option is for the court to make an order to remedy the error, where there has been an error of procedure applying CPR 3.10.

“3.10 Where there has been an error of procedure such as a failure to comply with a rule or practice direction –

(a) the error does not invalidate any step taken in the proceedings unless the court so orders; and

(b) the court may make an order to remedy the error.”

 

Another alternative is for the court to dispense with service of the claim form in reliance on CPR 6.16:

“Power of court to dispense with service of the claim form

6.16

(1) The court may dispense with service of a claim form in exceptional circumstances.

(2) An application for an order to dispense with service may be made at any time and –

(a) must be supported by evidence; and

(b) may be made without notice.”

An additional possibility in litigation, is for the court to make an order as it sees fit:

“Court’s power to make order of its own initiative

3.3

(1) Except where a rule or some other enactment provides otherwise, the court may exercise its powers on an application or of its own initiative.’

 

Relief from Sanctions in Civil Litigation

In Hills Contractors & Construction Ltd v Struth & Anor [2013] EWHC 1693 (TCC)

(17 June 2013) the judge at paragraph 56 held as follows:

 

‘Extension of time for service of the Particulars of Claim

On the basis set out above, the claim form was not properly served. The claim form has to be served within its period of validity and, to put the matter beyond doubt, I extend time for service of Particulars of Claim to 15 May 2013.

‘69.I am quite clear that given the change to the overriding objective and to CPR3.9, if this application had been made after 1 April 2013, it would not have been granted. The need for compliance with the rules practice directions and orders now forms an essential part of the CPR.  ‘

The Court should be invited to view a Commercial Litigation case where there has been failure to file a sealed claim, through post Denton ‘glasses’, as in Denton, the court had criticised Mitchell ( Mitchell MP v News Group Newspapers Ltd [2013] EWCA Civ 1537) decided in the same year as Hills for a harsh approach in respect of relief from sanctions. This more lenient approach was reflected in Altomart Limited v Salford Estates (No. 2) Limited) [2014] EWCA Civ 1408 where relief was granted in respect of late filing of a respondent’s notice and  Caliendo v Mishcon de Reya [2014] EWHC 3414 (Ch) regarding late filing of a notice of funding.

Denton

As regards the application of the Denton criteria in Commercial Litigation matters it was held in Denton & Ors v TH White

Ltd & Ors [2014] EWCA Civ 906 (04 July 2014) as follows:

 

“41.We think we should make it

plain that it is wholly inappropriate for litigants or their lawyers to take advantage of mistakes made by opposing parties in the hope that relief from sanctions will be denied and that they will obtain a windfall strike out or other litigation advantage. In a case where (a) the failure can be seen to be neither serious nor significant, (b) where a good reason is demonstrated, or (c) where it is otherwise obvious that relief from sanctions is appropriate, parties should agree that relief from sanctions be granted without the need for further costs to be expended in satellite litigation. The parties should in any event be ready to agree limited but reasonable extensions of time up to 28 days as envisaged by the new rule 3.8(4).

42.It should be very much the exceptional case where a contested application for relief from sanctions is necessary. This is for two reasons: first because compliance should become the norm, rather than the exception as it was in the past, and secondly, because the parties should work together to make sure that, in all but the most serious cases, satellite litigation is avoided even where a breach has occurred.

43.The court will be more ready in the future to penalise opportunism. The duty of care owed by a legal representative to his client takes account of the fact that litigants are required to help the court to further the overriding objective. Representatives should bear this important obligation to the court in mind when considering whether to advise their clients to adopt an uncooperative attitude in unreasonably refusing to agree extensions of time and in unreasonably opposing applications for relief from sanctions. It is as unacceptable for a party to try to take advantage of a minor inadvertent error, as it is for rules, orders and practice directions to be breached in the first place. Heavy costs sanctions should, therefore, be imposed on parties who behave unreasonably in refusing to agree extensions of time or unreasonably oppose applications for relief from sanctions. An order to pay the costs of the application under rule 3.9 may not always be sufficient. The court can, in an appropriate case, also record in its order that the opposition to the relief application was unreasonable conduct to be taken into account under CPR rule 44.11 when costs are dealt with at the end of the case. If the offending party ultimately wins, the court may make a substantial reduction in its costs recovery on grounds of conduct under rule 44.11.  If the offending party ultimately loses, then its conduct may be a good reason to order it to pay indemnity costs. Such an order would free the winning party from the operation of CPR rule 3.18 in relation to its costs budget.’

This can be summarised with the following questions:

 

  1. Serious or significant breach?

 

  1. Why has breach occurred?

 

  1. Good reason for breach?

 

4.In any event applying the test in CPR 3.9

 

“Relief from sanctions 3.9

(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need –

(a) for litigation to be conducted efficiently and at proportionate cost; and

(b) to enforce compliance with rules, practice directions and orders.

(2) An application for relief must be supported by evidence.”

 

The court will also consider the overriding objective when considering any application.

“The overriding objective 1.1 (1) These Rules are a new procedural code with the overriding objective of enabling the court to deal with cases justly and at proportionate cost. (2) Dealing with a case justly and at proportionate cost includes, so far as is practicable –

(a) ensuring that the parties are on an equal footing;

(b) saving expense;

(c) dealing with the case in ways which are proportionate

(i) to the amount of money involved;

(ii) to the importance of the case;

(iii) to the complexity of the issues;

(iv) to the financial position of each party;

(d) ensuring that it is dealt with expeditiously and fairly;

(e) allotting to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases;

(f) enforcing compliance with rules, practice directions and orders. Application by the court of the overriding objective 1.2 The court must seek to give effect to the overriding objective when it –

(a) exercises any power given to it by the Rules;”

There are a number of possible arguments to raise to enable a Claimant pursuing a Commercial Litigation matter to rectify the problem of service of an unsealed claim form. It is advisable to act promptly in relation to any application. In addition given the ability to seal a claim form is in the hands of the court, it would be unwise to consent or seek any order to serve a sealed claim form by a specified time until the sealed claim form is in the Claimant’s control. Otherwise if it is not, one would have agreed to an order which they may not be able to comply with, it being dependent on the court sending the Claimant the sealed version to effect service.

The decision the Court takes on the application before it will depend on the facts and what has occurred already in the litigation process.

 

This article is for information only and not legal advice, it should not be relied on and no liability is accepted for its contents.

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