The underlying dispute in Woodward and another v Phoenix Healthcare Distribution Ltd concerned the alleged mis-sale of a drug by the respondent whilst still under patent to a company which claimed that, as a result of the respondent’s breach of contract or misrepresentations, it suffered financial loss in excess of £5 million and which forced it to enter administration.
The focus of this appeal concerned whether the appellants’ claim was statute-barred by virtue of limitation. The claim form was issued on 19 June 2017; pursuant to CPR 7.5(1), it should have been served no later than midnight on 19 October 2017. It was not.
Instead, the appellants’ solicitors emailed and posted the claim form and particulars of claim to the respondent’s solicitors on 17 October 2017. A partner at the respondent’s firm took the view that:
- The appellants’ service was invalid.
- He was under no obligation to notify their solicitors of any defect in service.
The partner considered service to be defective because at no point had his firm been instructed to accept service nor had it ever communicated that it was authorised to do so. The partner met with representatives of his client and was instructed not to bring the defective service to the appellants’ attention.
On 20 October 2017, one day following the expiry of the claim form, the respondent’s firm notified the appellants’ solicitors that service had been defective. The appellants’ solicitors immediately sought to serve the respondent itself by way of courier, post and email, although all too late. The appellants subsequently applied for an order that:
- The steps taken on 20 October 2017 amounted to good service.
- Alternatively, that service should be dispensed with.
- In the further alternative, that a retrospective extension of time to serve the claim form be granted.
First instance and first appeal decision
At first instance before Master Bowles, the issues included whether the respondent was under a positive duty to notify the appellants’ solicitors as to their mistake and whether the steps taken on 20 October 2017 amounted to good service. In his judgment, which was handed down almost immediately after the Supreme Court’s decision in Barton v Wright Hassall LLP (but which included an addendum addressing the principles raised in Barton), the master concluded that the respondent’s firm was:
- Under no duty to notify the appellants of their mistake.
- However, there had been good reason retrospectively to validate service of the claim form and particulars of claim.
In particular, the master reasoned that:
“… good reason was provided by the failure of Mills & Reeve [the respondent’s solicitors], contrary, as I find, to its, or its client’s, duty to further the overriding objective, to warn Collyer Bristow [the appellants’ solicitors] that its purported service was defective, such that good service could have been effected in time. It was that failure which constituted the deliberate playing of a technical game.”
In particular, the master held that the respondent’s solicitors were duty bound under CPR 1.3 not to take advantage of the appellants’ error.
That decision was appealed to HHJ Hodge QC, who held that the master was plainly wrong insofar as no positive duty existed for a party to notify its opponent under CPR 1.3.
In turn, HHJ Hodge QC’s decision was appealed on the grounds that:
- The respondent’s failure to notify the appellants of their defective service was contrary to CPR 1.3.
- The respondent’s conduct amounted to “game playing”.
- In the circumstances, there was good reason to permit alternative service.
Asplin LJ delivered the Court of Appeal’s unanimous decision. In essence, she held that the master failed to properly take into account the reasoning of Lord Sumption when giving the majority decision in Barton; namely, that a defendant’s advisers were under no duty to give advice to the claimant and that, in any event, it was inconceivable that they would have been instructed to do so by their client. In deciding whether to grant the appellants relief, another relevant consideration was the prejudice which would be suffered by the respondent, in this case, the loss of its right to an ironclad limitation defence.
The court went on to consider to what extent relief from sanctions pursuant to CPR 3.9 assisted the appellants, applying the distinction drawn by Lord Sumption in Barton between sanctions for non-compliance with rules and court orders, and rules which specifically governed the service of a claim form. Asplin LJ appeared to agree with that distinction insofar as sanctions are generally aimed at penalising a party for breaching rules engaged once proceedings have commenced, whereas the rules on service of a claim form are more fundamental and contain “the conditions upon which the court will take cognisance of a matter”.
Accordingly, the court dismissed the appeal.
Although at first blush the Court of Appeal’s decision may appear unremarkable, it provides an important (though not entirely unproblematic) gloss on the duties owed between litigants and the nature of different types of procedural breaches:
- Notwithstanding the parties’ obligation to “help the court to further the overriding objective” pursuant to CPR 1.3, it is now clear that such a duty is independent from any duty which a party might owe to its opponent, for example, to notify it of having made a procedural blunder.
- The suggestion that a party does not owe any duty whatsoever to the other side, however, would be an overstatement. In particular, the courts are likely to criticise defendants who actively contribute to some misunderstanding on the claimant’s part (for example, that service of the claim form was valid), thereby increasing the chances that relief will be granted.
- In Barton, the Supreme Court held that a represented party owes no duty to disabuse the other side, even when a litigant in person, of a misapprehension. (In Barton, the appellant’s claim became time-barred because he had been unaware that emailing his claim form did not amount to good service.) If a represented party is generally under no obligation to notify a litigant in person of their mistake, this principle must apply even more strongly in the context of two represented parties (as here).
- Although neither the reasoning of the Supreme Court in Barton nor the Court of Appeal in Woodward was entirely clear, it appears that the courts distinguish between non-compliance with procedural rules and orders once proceedings are underway, and where such non-compliance relates to those rules which govern the commencement of proceedings. Unfortunately, this distinction is less than entirely convincing in circumstances where proceedings in Barton and Woodward had commenced (the error in both cases concerned non-service of the claim form, not a failure to issue proceedings). It also appears somewhat inconsistent, contrary to the view shared by the Court of Appeal and HHJ Hodge QC, that while it might be inappropriate for a party to exploit another’s mistake by opposing the latter’s application for relief from sanctions, no such constraint exists in the context of exploiting an opponent’s mistake concerning service of a claim form, even if that error might cause him or her to suffer far worse consequences.
- Uncertainty lingers as to whether the length of time between defective service and the expiry of limitation is relevant in respect of whether a claimant will be granted relief. Although on the one hand the authorities indicate that it does not matter whether defective service took place one day or one month before the claim would become time-barred, Asplin LJ seemed to suggest otherwise at one point in her judgment:
“Lord Sumption made clear… that even if there had been time to warn, there was no duty to advise of the error. Of course, depending on the facts, the position may well be different if there is a substantial period before the expiry of the limitation period.”
On the Court of Appeal’s own reasoning, however, it is difficult to see how or why the position is different.
- Related to this point is HHJ Hodge QC’s finding that the appellants had “courted disaster” by waiting until the last minute to serve (defectively) their claim form. While this view is understandable, its relevance is unclear to the extent that, according to the Supreme Court in Barton (and as applied in Woodward), non-compliance with the rules concerning service of the claim form are in a different category than other breaches. This is because they go to the heart of whether the court has jurisdiction over the proceedings. Why such jurisdiction should be affected by the timing of defective service, if at all, remains unclear.
The court’s judgment provides a few important lessons for practitioners:
- Remember that litigation is ultimately an adversarial process. Unless your side has actively contributed to an opponent’s procedural mistake, it is unlikely to be criticised even if it subsequently takes advantage of that mistake. In fact, notifying the other side as to its error (without the client’s express instructions to this effect) might breach professional obligations to act in the client’s best interests (for example, by forgoing the opportunity to rely on an ironclad defence).
- If in any doubt that you or your client might be labouring under a procedural misapprehension, then it is best to seek timely confirmation from the other side that their understanding accords with your own. While the other side is under no duty proactively to notify you of an error, their unwillingness to bring it to your attention despite being expressly requested to confirm the procedural position is more likely to attract judicial criticism and, therefore, potentially entitle the applicant to relief.