The decision in Stanley v London Borough of Tower Hamlets arose out of circumstances at a very specific point in time that may not be exactly replicated. The claimant attempted to effect service on the defendant just two days after the national lockdown was announced. Businesses across the country had to adapt to an unprecedented situation but had not yet necessarily set up appropriate systems to deal with remote working.
The court will take into account the impact of the pandemic when considering applications for relief from sanctions, but organisations should now have taken steps to deal with the situation and the eventuality of further lockdowns. Firms or businesses should, for example, consider accepting service by alternative means or ensure that systems are in place to avoid any legal documents being missed. Although the defendant in this case was successful and awarded its costs of the application, it would no doubt rather have avoided the risk of having to apply for relief for sanctions.
Still, the bigger lesson is of course for those in the position of the unsuccessful claimant in this application, which illustrates the importance of exercising common sense when serving documents.
Default judgment can be a useful tool for claimants but, as this case demonstrates, default judgment in circumstances where the court is likely to set it aside may result in time and costs being wasted on satellite litigation before the parties even start addressing the substantive issues between them.
Under CPR 13.3(1), the court has a general discretion to set aside or vary a judgment in default if:
- The defendant has a real prospect of successfully defending the claim.
- It appears to the court that there is some other good reason why the judgment should be set aside or varied or the defendant should be allowed to defend the claim.
Under the CPR, proceedings can be validly served without actually having been received by the defendant. Even if a claim form is lost in the post, it can be validly served provided it was correctly dispatched within the appropriate deadlines. Evidence of sending should be kept, such as a photocopy of the envelope showing the correct address and postage and an attendance note of the steps taken to dispatch.
However, even if service is validly effected in accordance with the CPR, claimants and their solicitors should be reasonable in their attempts to bring the proceedings to the defendant’s attention to prevent arguments about service or judgment in default being set aside. Even if service is to be effected by post, if the defendant has (a) known email address(es), it is good practice also to send the documents by email, requesting a delivery and read receipt.
If the documents to be served are voluminous, practitioners should consider sending them wrapped in elastic bands rather than sending lever-arch folders to ensure they can be placed in a defendant’s letterbox, even if no one is home, so as to avoid the possibility that the documents are returned undelivered.
If the defendant has provided an address for service, but a lot of time has elapsed or circumstances suggest that the situation may have changed (such as a national lockdown resulting from a global pandemic), claimants should verify whether the instruction is still valid. Where the defendant has not provided an address for service, care should be taken when choosing a place of service. If service is to be effected at a last known residence or last known place of business, it is important first to make reasonable enquiries to check the defendant’s whereabouts, such as through relevant professional directories (see Mersey Docks Property Holdings v Kilgour). If a number of potential addresses are discovered, consider serving at all of them.
Generally, practitioners should exercise common sense when effecting service, even where it has technically been done correctly, to avoid unnecessary satellite litigation and circumstances in which relief from sanctions may be granted.
