Court of Appeal confirms no duty on solicitor to warn opponent of error in serving claim form

The Court of Appeal has upheld a decision that there was no good reason to validate service retrospectively where the claimant’s solicitors had purported to serve proceedings on the defendant’s solicitors shortly before the claim form expired without first confirming that the solicitors were instructed to accept service: Woodward v Phoenix Healthcare Distribution Ltd [2019] EWCA Civ 985.

Like the High Court, the Court of Appeal considered that the Master was wrong to conclude that the defendant’s solicitors were in breach of a duty to the court to help further the overriding objective, and had engaged in “technical game playing”, by not drawing the error to the claimant’s attention.

The decision is not surprising, as it is in line with comments of Lord Sumption in Barton v Wright Hassall LLP [2018] UKSC 12 (considered here). It is however helpful confirmation of the point, in light of the Master's view that Barton was not binding authority on the point.

As with the High Court's decision, however, the judgment does not necessarily mean that solicitors can safely stay silent in all circumstances where an opponent has made an error in service. The court does not comment on the High Court's suggestion that there would or may be a duty to speak out where a defendant's own conduct has contributed to the claimant's misunderstanding, or what the position would be where the situation calls for a response from the defendant. There is also a rather puzzling comment by the Court of Appeal that, "depending on the facts, the position may well be different if there is a substantial period before the expiry of the limitation period." It is not clear how substantial the period would have to be or why the length of time should make a difference, unless perhaps it creates a situation in which the defendant will be called on to respond in some way.

Background

The background is explained in more detail in our post on the first instance decision (here). Briefly, the claimant issued a claim form one day before the claim was potentially time-barred, and purported to serve it on the defendant's solicitors shortly before its four-month period of validity had expired. The defendant’s solicitors waited until that period had expired before pointing out that service was invalid because the solicitors were not authorised to accept service.

The claimant applied for an order under CPR 6.15, which allows the court to validate service retrospectively if there is good reason to do so.

The Master granted the application on the basis that the defendant’s solicitors had engaged in “technical game playing” by deciding not to draw the claimant’s attention to the error in service while there was still time to correct it. Although the Master accepted that there was no breach of any duty to the claimants, or any professional duty, he found that there was a breach of the defendant’s duty to the court to help further the overriding objective under CPR 1.3.

The High Court allowed the defendant's appeal against the Master's decision, emphasising that there is no requirement for a solicitor who has not contributed to an opponent’s mistake to draw attention to that mistake. The claimant appealed to the Court of Appeal, arguing that the judge was wrong to find that the Master had erred in finding that the defendant's failure to notify the claimant of the defendant in service was contrary to CPR 1.3 or that it was "game playing", and in any event was wrong to hold that the facts did not afford "good reason" to permit alternative service including because the claimant had "courted disaster" by delaying issue and service until the last moment.

Decision

The Court of Appeal dismissed the appeal, Asplin LJ giving the lead judgment with which Bean and Nicola Davies LJJ agreed.

In light of the approach taken by Lord Sumption in Barton (referred to above), there was no scope to criticise the judge's conclusion that the Master had erred in finding the defendant was in breach of CPR 1.3 or had engaged in technical game playing. Although Lord Sumption had not specifically addressed CPR 1.3, in light of his conclusion that the defendant's solicitors in that case were under no duty to warn the claimant of its error, and that the defendant would have been entitled to refuse to instruct the solicitors to give such a warning, Lord Sumption could not have regarded the failure to warn as inconsistent with the defendant's duties under CPR 1.3.

The Court of Appeal rejected the claimant's attempt to distinguish the present case from Barton on the basis that there was no time to rectify the error in Barton. Lord Sumption made clear that, even if there had been time to warn, there was no duty to do so.

The Court of Appeal also found that the Court of Appeal's decision in Denton v White (considered here) could not have any bearing on the present case, given the clear distinction drawn by Lord Sumption between the considerations under CPR 6.15 and those which apply on an application for relief from sanctions under CPR 3.9, in particular that the rules governing the service of a claim form are "simply conditions on which the court will take cognisance of the matter at all". The comment in Denton that it was "wholly inappropriate" to take advantage of an opponent's mistake was directed at inappropriate resistance to applications for relief from sanctions which are bound to succeed, and did not apply to the question of retrospective validation of service of a claim form under CPR 6.15.

The court also noted that the judge's view that the claimant had courted disaster by delaying issue and service was entirely consistent with the approach endorsed by Lord Sumption in Barton.