Court of Appeal decision highlights dangers of filing claim form electronically on final day for service

The Court of Appeal has held that service of unsealed claim forms did not amount to effective service, and has refused to validate service under CPR 3.10, which allows the court to remedy errors of procedure: Ideal Shopping Direct Limited v Mastercard Incorporated and Visa Europe Limited [2022] EWCA Civ 14.

A claim form filed electronically under the Electronic Working Pilot (which is compulsory for represented parties in a number of courts, including the Business and Property Courts) is not sealed until the document is accepted by the court, and that may not be until the next day or later. A claimant with a deadline for service on the day of filing may therefore be unable to serve a sealed copy of the claim form that day. As the court has held that serving an unsealed claim form is not sufficient, a claimant in that position may find that no effective service can take place.

A claimant who is coming up against a deadline for service should therefore file electronically in sufficient time to allow for any delay before the claim form is sealed. If this will not be possible, the claimant should seek an extension of time from the defendant or, failing that, the court.

Background

The claimants issued proceedings against Visa and Mastercard alleging breaches of competition law. The claims were similar to those made in proceedings between Sainsbury's and Visa and the parties therefore agreed that time for service of the proceedings should be extended until judgment in that action. The final extension agreed was until Friday 17 July 2020, which was one month after the Supreme Court decision in the Sainsbury's case.

On 17 July the claimants filed amended claim forms electronically at court in respect of 16 claims, using, as they were obliged to, the electronic "CE file" system. Automatic notifications were received from the court confirming the documents had been submitted and that they were being reviewed by the court prior to acceptance. The claimants also sent copies of the unsealed claim forms to the defendants that day, purportedly by way of service.

All of the claims were accepted and sealed on 20 July, except for one sealed on 17 July and another on 22 July. In accordance with paragraph 5.4 of PD51O, the claim forms were treated as having been issued on 17 July 2020.

The sealed amended claim forms were served on the defendants later in July. Both defendants applied for orders that the claim forms had not been served in time and the court had no jurisdiction to hear the claims. The claimants sought a declaration that valid service had been effected on 17 July by means of the unsealed claim forms. Alternatively they asked for relief, including under CPR 3.10 which is headed "General power of the court to rectify matters when there has been an error of procedure". It provides:

"Where there has been an error of procedure such as a failure to comply with a rule or practice direction

(a)   The error does not invalidate any step taken in the proceedings unless the court so orders; and

(b)   The court may make an order to remedy the error."

The judge held that as the documents served on 17 July 2020 were not sealed, they were not claim forms so no service was effected within the time permitted for service as extended by the parties' agreement. That defect in service could not be remedied under CPR 3.10.

The claimants appealed.

Decision

The Court of Appeal dismissed the appeal. The Chancellor, Sir Julian Flaux, gave the decision of the court, with which Elisabeth Laing and Birss LJJ agreed.

The court rejected the argument that there was a lacuna in the Electronic Working Pilot and that the court should alleviate the injustice and uncertainty to which it led. While there was a gap or delay between filing a claim form and its acceptance and sealing, which had been exacerbated by the pandemic, that was known to solicitors using the Business and Property Courts. There were at least five things the claimants could and should have done which would have avoided the problem they had encountered:

• Filed the amended claim forms earlier, not on the last day for service, particularly given that there had been a month in which to assimilate the Sainsbury's decision.
• If that was not possible, seek a further extension of time for service from the defendants.
• If no extension was forthcoming, serve the original claim forms and then serve the amended claim forms when sealed.
• When filing the amended claim forms electronically, request the court to expedite acceptance.
• If all else failed, apply to court for an extension of time for service indicating in the supporting evidence the concern that delays within the CE file system might jeopardise service before expiry of the deadline.

As for whether it was permissible to serve an unsealed claim form, the starting point under the CPR in cases where Electronic Working does not operate is that the claim form must be sealed before it can be validly served. That is also the position where the claim form has been amended. The position was no different in the case of Electronic Working under PD51O. The Pilot operated within the CPR, subject to any express exclusions or revisions. There were none. In fact, paragraph 8 of the PD was clearly predicated upon the claim form not being ready for service until it had been accepted and sealed by the court.

As for the scope of CPR 3.10, it was clear from the Court of Appeal decision in Vinos v Marks & Spencer plc [2001] 3 All ER 784 and the line of authority following it, that this rule cannot be used to override specific CPR provisions. The claimants were, in effect, seeking to override CPR 6.15, which allows service by an alternative method, but only where there is good reason to do so, and CPR 6.16, which permits the court to dispense with service, but only where there are exceptional circumstances. The claimants could not satisfy the "good reason" or "exceptional circumstances"' criteria and it was not permissible to use CPR 3.10 to bypass them. Similarly, CPR 7.6(3) allows the court to grant an extension of time to serve a claim form but, if the application is made after time for service has expired, the claimant has to show that they have taken all reasonable steps to serve, but have been unable to do so. The claimants would not be able to satisfy this requirement and they could not use 3.10 to bypass it.

It was no answer for the claimants to seek to categorise this as a case where they took a procedural step but did so defectively. That was not a valid distinction. Furthermore,  remedying the error would still involve bypassing particular rules, and that is not permissible. The provisions on service of originating process form part of a specific sub-code dealing with service and cannot be overridden or bypassed by the general power in CPR 3.10.

The court observed that, as noted in an earlier decision, if CPR 3.10 did apply to service errors it would automatically validate service unless the court ordered otherwise, which was a surprising proposition.

In any event, even if relief under CPR 3.10 was available in principle, the court would not have exercised its discretion to grant relief to the claimants, in part because it would deprive the defendants of a limitation defence.