… e-filed it, Master!

I am grateful to Master Rowley for highlighting the issues herein to me.

Further to an amendment to PD 51O of the CPR (the Electronic Working Pilot Scheme), the Senior Courts Costs Office (SCCO) is now using the CE-File electronic court file. For legal representatives, this has become mandatory with effect from 20 January 2020.

This means that parties who are legally represented must upload documents to the court file using CE-File (and not by any other means) in the following cases:

  • Detailed assessment proceedings in which a request for a hearing is filed on or after 20 January 2020.
  • Applications filed on or after 20 January 2020 (whenever the proceedings were commenced).
  • Part 8 claims commenced in the SCCO on or after 20 January 2020.
  • Assessment of legal aid bills filed on or after 20 January 2020.
  • Assessment of the bills of deputies appointed by the Court of Protection, filed on or after 20 January 2020.
  • Criminal costs appeals filed on or after 20 January 2020.

Importantly, any documents sent to the SCCO other than through CE-File by parties who are legally represented (or who are themselves lawyers) in the proceedings listed above will not be filed or, in the case of applications and Part 8 claims, issued. Documents sent by post or DX will be returned.

The ramifications for non-compliance will be obvious. Penalties for late filings, whether those are disallowed interest, or even adverse finding through later applications for relief or, worse, still a failure to comply with the provisions on limitation, will no doubt be revisited upon the representative. And the care required to file correctly should not be understated. A recent case is particularly illustrative.

In Re Carter Moore Solicitors Ltd, a notice of intention to appoint administrators (NOI) was filed at court by licensed insolvency practitioners on behalf of the directors of Carter Moore Solicitors Ltd (the company). The filing was made electronically through the CE-filing system (operating at the Business and Property Courts in Manchester) at 9.05 am on 13 January 2020. The directors of the company resolved to appoint administrators, and those administrators (the licensed insolvency practitioners) filed a notice of appointment (NOA). They did so through CE-File at 2.17 pm on 24 January 2020. Although the NOA was in the correct form, the wrong “drop down box” had been selected, and “new case” had been selected instead of “existing case”.

The consequence of the above error meant that a larger fee was required to be paid than should have been the case. It also meant that the system did not link the NOA to the correct file as the “new case” entry had initiated a new case reference altogether. At 4.04 pm on 24 January 2020, the court clerk notified the insolvency practitioners by email of the error, having noticed the original case reference on the face of the NOA, and by 4.07 pm the NOA had been re-submitted correctly. On 27 January 2020, the insolvency practitioners were notified that the filing had been accepted by the clerk at 4.07 pm on 24 January 2020.

Sadly for the insolvency practitioners, that was not good enough! The NOA came to be sealed by the court clerk and endorsed with the date 27 January 2020 and the time of 10.00 am. The clerk had taken the view that as the SCCO closed to the public at 4.00 pm, the correct endorsement was the next time the office opened to the public, namely 10.00 am on 27 January 2020. This was consistent with the guidance suggested by the ICC Judge Burton in Re SJ Henderson & Co Ltd.

The endorsement raised a number of issues in relation to the practice of NOAs being filed outside of court hours at all, but, most relevant here, it also raised a concern about compliance with paragraph 28(2) of Schedule B1 to the Insolvency Act 1986, which provides that an appointment of an administrator by the directors may not be made more than ten business days after the NOI. That timeframe seemingly expired at the close of business on 24 January 2020.

Readers will be relieved to know that PD 51O.5.3 provides the court with the power to cure such a defect, and it in turn refers back to the very familiar territory of CPR 3.10. In this case, Snowden J declared that the NOA should be treated as having been validly filed at court at 2.17 pm on 24 January 2020. But the real point is that on the question of whether there was a “breach” in the first place, there plainly was. There may be some leniency in the very early days of CE-file at the SCCO, but it seems absolutely clear that a failure to file properly will have costly consequences and significant embarrassment. Haste makes waste, as the saying goes.

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