Impact of stay on procedural deadlines

A recent High Court decision illustrates the need for parties to be clear as to the impact of a stay on procedural time limits in the action: UK Highways A55 Ltd v Hyder Consulting (UK) Ltd [2012] EWHC 3505 (TCC).

The decision suggests that, where an action has been stayed for a period of time, the proceedings will resume automatically at the point they left off once the stay has come to an end. Time will continue to run from that point, at least for any deadlines defined by reference to a period of time (eg. 14 days). The position is less clear where a deadline was set by reference to a specific date which passed during the period of the stay.

Parties must therefore be ready to meet any approaching deadlines once the stay has expired, or else apply promptly for an extension of time. If there is room for doubt as to the effect of the stay on existing deadlines, this should be clarified in the consent order agreeing the stay.

Background

The claim form in this action, alleging negligent design in the construction of a road, was served shortly before expiry of the relevant limitation period. Then, before the 14 day period for serving the particulars of claim expired, the parties agreed a consent order staying the action to allow for further negotiations. Some three weeks after this first stay expired, a further consent order was made providing for a further stay. Two further stays were subsequently agreed, though again the periods covered by the stays were not continuous.  

About a year after the last stay expired, negotiations having broken down some months before, the defendant applied to the court for the case to be struck out. The claimant then served the particulars of claim. Its primary position was that it did not need an extension of time to serve the particulars, as the effect of the initial stay was to abrogate any existing time limits by which future steps in the action had to be taken, but it sought an extension in the alternative.

Decision

The court held that the proceedings had automatically continued from the point they left off once the first stay was lifted, and therefore time for service of the particulars had expired in the period between the initial stay having expired and the second having been agreed. 

However, since the parties had plainly intended that the proceedings should be stayed for the whole of the period from agreement of the first stay to expiry of the fourth, it would be unjust if the defendant were permitted to take the point that the particulars should have been served in the intervening period. Further, by agreeing to the subsequent stays, the defendant had probably waived any such argument.

The claimant also could not be criticised for not serving the particulars for several months following expiry of the fourth stay. The parties had continued to discuss the claim and exchange information on a without prejudice basis, and no had one suggested that the claimant should serve the particulars of claim. The claimant could therefore reasonably take the view that the defendant was acquiescing in the delay. However, once negotiations had broken down, the claimant no longer had any reasonable ground for not serving the particulars.

The court considered whether it was appropriate to grant relief from sanctions. Having considered each of the factors set out in CPR 3.9, it held that it the claimant should be granted an extension of time to serve the particulars save in respect of an allegation of negligent supervision which had been raised for the first time in the particulars of claim. The defendant was more likely to be prejudiced by the delay in respect of that issue than in respect of the allegation of negligent design, as the latter was primarily a matter for resolution by expert evidence rather than evidence of fact.

Comment

This decision illustrates the importance of being clear as to the effect of a stay on existing time limits for procedural steps, and being ready to meet any applicable deadlines once the action has resumed. If there is any room for doubt, the effect of the stay on existing time limits should be clarified in the consent order agreeing the stay.

The decision also illustrates the court's approach to granting relief from sanctions where an applicable deadline has been missed. It should be noted however that CPR 3.9, which governs the circumstances in which the courts will grant relief from sanctions, is to be amended from April this year as part of the Jackson reforms (see post). The change is intended to implement Lord Justice Jackson’s recommendation that the courts “should be less tolerant than hitherto of unjustified delays and breaches of orders”.

We will need to wait and see how the new rule is applied in practice, but it may be that we will see the courts taking a harder line in enforcing procedural deadlines. Parties should therefore be extra vigilant in ensuring compliance so as to avoid being on the receiving end of any tough case management decisions under the new regime.