Court of Appeal refuses extension of time to plead dates of damage in claims arising out of oil spill, meaning some 28,000 claims cannot proceed

The Court of Appeal has dismissed an appeal against a High Court decision refusing to grant the claimants further time to serve "date of damage pleadings" identifying when they say their cause of action accrued. The result is that the vast majority of the claims in the action, arising out of a 2011 oil spill off the coast of Nigeria, will not be able to proceed: Jalla v Shell International Trading [2021] EWCA Civ 1559.

The decision illustrates the dangers of waiting until the final day for complying with a deadline before applying for an extension of time, particularly where the deadline relates to an essential step in the case. In such circumstances, while the court will will take into account the consequences of refusing the application in deciding whether to exercise its discretion to extend time, the fact that those consequences may be draconian will not in itself guarantee a positive outcome to the application.

The decision is also of interest for the view that the court should apply, by analogy, the rigorous approach the courts adopt in considering whether to grant a party relief from sanctions, ie the three-stage test set out in Denton v TH White Ltd [2014] EWCA Civ 906 (considered here) as to (i) whether the failure to comply with the deadline was serious or significant, (ii) whether there was a good reason for it, and (iii) whether in all the circumstances it is appropriate to grant relief, bearing in mind the need for litigation to be conducted efficiently and at proportionate cost, and the need to enforce compliance with court rules and orders.

Previous case law had shown that the courts will generally adopt that approach where a party applies for a retrospective extension of a deadline that has already expired. This shows that the same approach may be adopted, in some circumstances, even where the application is made in time.

Background

The claims relate to a December 2011 oil spill off the coast of Nigeria at a platform owned/operated by the defendant group of companies. There are two separate sets of proceedings:

• The first action was commenced in December 2017, but the relevant English-domiciled defendant (STASCO) was not joined until 4 April 2018. That action was purported to be brought by two individual claimants as a representative action under CPR 19.6 on behalf of more than 27,500 individuals and 457 communities said to be affected by the spill. The representative element of that action has however been struck out, so that it now involves only the claims of the two individual claimants.
• The second action (the present action) was commenced in April 2020, naming as separate claimants most of the individuals and communities who were purported to be represented in the first action.

The defendants raised a jurisdictional challenge in both actions, arguing that the claims against STASCO are time-barred and therefore it cannot be used as an anchor defendant to ground jurisdiction against the other defendant.

In a judgment in March 2020 ([2020] EWHC 459 (TCC)), Stuart-Smith J found that it was safe to conclude that, if the oil from the December 2011 spill was responsible for the damage alleged, then oil would have spread to affected areas of the shoreline within weeks rather than months. Therefore all claims against STASCO were statute-barred.

However, during the hearing which led to that judgment, the claimants suggested (for the first time) that, because some of the properties were inland, the oil may have taken much longer to reach those properties and therefore the cause of action might have accrued much later for limitation purposes. This new case led to Stuart-Smith J ordering the claimants to produce "Date of Damage Pleadings" (DODPs), so that the defendants knew the case they had to meet, together with "evidence identifying when the Claimants say they noticed or suffered damage and expert evidence validating the allegation that the damage noticed or suffered on a certain date was caused by the December 2011 Spill".

The DODPs were ordered to be served by 24 November, but that deadline was later extended to 4 June 2021. The claimants cited the security issues in the relevant part of Nigeria, the difficulties with communications, and the pandemic as reasons for needing the extension. The trial of limitation issues was fixed for February 2022.

In May 2021, the claimants sought a further three-and-a-half month extension for the service of DODPs. The defendants instead offered a one month extension, to 2 July 2021, making it clear they would not agree to any further extension because it would mean abandoning the trial in February 2022. That new deadline was agreed by the claimants and endorsed by the court, and the defendants were given until 26 November 2021 to respond to the DODPs.

On the day of the new deadline, 2 July 2021, the claimants served DODPs and supporting evidence in respect of only 9 of the claims and sought a further extension of time, to 20 August 2021, to serve further DODPs and supporting evidence. The defendants disputed the extension sought, and the judge (O'Farrell J) refused the extension.

The claimants appealed, arguing (principally) that the judge had failed to weigh in the balance the fact that, if there was no extension of time, the vast majority of the claims would effectively be struck out.

Decision

The Court of Appeal dismissed the appeal, Coulson LJ giving the leading judgment with which Underhill and Edis LJJ agreed.

As this was a case management decision, the court could only interfere if the judge had had regard to irrelevant factors or failed to have regard to relevant factors, or if her discretion was clearly wrongly exercised. That was a high hurdle.

Coulson LJ was not satisfied that the judge had failed to take account of the fact that, if she did not extend time, the great majority of the claimants would not be able to pursue their claims. While the judge had not identified this factor expressly, and it would have been better to do so, it was inconceivable in the circumstances that she was unaware of it. There was no suggestion that the judge had had regard to anything irrelevant, and it could not be said that her decision was plainly wrong. Accordingly, there was no basis for interfering with her decision.

However, Coulson LJ went on to consider the position if he were to re-exercise the court's discretion - in case, contrary to his view, the judge did err in this way.

In doing so, he had particular regard to a matter the judge did not expressly address, namely the claimants' confirmation at the hearing before the judge that they proposed only to serve a reformatted schedule identifying the dates on which they say damage was first suffered for further properties. In other words, that the further DODPs would not be accompanied by any further factual or expert evidence.

As Coulson LJ put it, it was "self-evident" that dates added to the schedule in this way could not be evidence at all, but rather "a mere assertion, made by somebody unknown pressing a button on a computer, with no evidence to confirm or support the dates or to show that they had not been plucked out of the air at random".

Further, this new proposed approach amounted to a complete negation of what the claimants had previously been ordered to do. Stuart-Smith J had expressly directed the service of evidence supporting the dates asserted. In essence, the claimants were not seeking an extension of time but a variation of Stuart-Smith J's earlier order. That should not be permitted.

Coulson LJ concluded that, if he were to re-exercise the court's discretion, he would regard that factor alone as out-weighing the draconian consequences of refusal and therefore justifying the judge's order.

In any event, Coulson LJ noted, the court had to consider the application to extend time by reference to the overriding objective, with its concepts of dealing with a case justly and at proportionate cost, expeditiously and fairly, taking into account the court's resources and enforcing compliance with orders.

The principles that applied to the grant of relief from sanctions under CPR 3.9 (as set out in Denton v TH White Ltd, referred to above) were not directly relevant, because the application was made (just) in time and there was no sanction (as there was no failure to comply with an unless order). However, Coulson LJ noted that, in the circumstances of this case, the position was similar to where there was an unless order, since refusal of an extension meant the vast majority of the claims could not continue. Accordingly, the Denton principles were applicable, at least by analogy, when considering whether or not it was in accordance with the overriding objective to grant the extension. Applying those principles:

1. It was clear that the failure to serve the DODPs and supporting material for the vast bulk of the claimants by 2 July 2021 was serious and significant. The claimants had had from March 2020 to provide this material, and any delay beyond 2 July 2021 would inevitably have required the trial on limitation issues to be adjourned (despite the claimants' suggestion to the contrary).
2. There was no proper explanation, or indeed any real explanation, for the delays. Coulson LJ inferred from what little evidence had been provided that there was little attempt to comply with the court's orders before late spring / early summer 2021. Nor was there any evidence as to why the claimants now wished to produce mere schedules of dates, without any supporting evidence.
3. The third stage of the Denton test required the court to consider all the circumstances of the case, including the need for litigation to be conducted efficiently and at proportionate cost, and the need to enforce compliance with court orders. Coulson LJ noted that this litigation had not been conducted efficiently or at proportionate cost, and the claimants' agreement to the consent order of 2 June 2021 (which he said was likely to have been based either on "unrealistic optimism" as to their ability to comply with the extended timetable, or "cynical opportunism" in agreeing the consent order knowing they could not comply) was another strong factor weighing in the balance against them. Coulson LJ acknowledged that, if there was no further extension, the vast bulk of the claims would fail. But that was not sufficient to outweigh the factors against the claimants, including the prejudice to the defendants and the pointlessness of allowing dates to be put forward in a schedule without any evidence to support them.