Procedure for challenging jurisdiction includes challenges based on validity of service, not just international jurisdiction

The High Court has held that a defendant who wished to argue that proceedings had not been served in time, because orders extending time for service of the claim form should be set aside, should have used the procedure for challenging jurisdiction under CPR Part 11 rather than applying to strike out the claim. The court was, however, prepared to correct the defendants' procedural error under CPR 3.10: The Tintometer Ltd v Pitmans [2024] EWHC 370.

The case is a useful reminder that CPR 11 is not limited to challenges based on the court's international jurisdiction. It should be used whenever a party wants to challenge the court's jurisdiction to hear a claim, including on grounds of improper service.

Where a defendant acknowledges service of proceedings and then fails to bring a jurisdiction challenge under CPR 11, it can result in the defendant having waived any challenge to jurisdiction, as shown by the Court of Appeal's decision in Hoddinott v Persimmon Homes (Wessex) Ltd [2007] EWCA Civ 1203 (considered here).  While the court may be prepared to correct a defendant's procedural error under CPR 3.10, particularly if (as in the present case) it has made clear its intention to dispute the claimant's entitlement to have the case heard, a defendant in this position will be at the mercy of the court's discretion.

The decision also confirms that a party who is added or substituted to proceedings does not have standing to apply to set aside orders made before they became a party under CPR 3.3(5), on the basis that those orders were made without a hearing. However, a new party may be able to apply to vary or revoke a previous order under CPR 3.1(7) on the basis that there has been a material change of circumstances since the order was made – and, in some circumstances, the party's addition to the proceedings may itself amount to such a change.

Background

The claim arose in relation to alleged negligent advice by solicitors in relation to the amendment of a pension scheme in 2008/9. The claimants were the employer and the pension scheme trustee.

The claim form was not issued until April 2021. Therefore the claimants had to rely on s.14A of the Limitation Act 1980, which provides a limitation period of three years from the earliest date on which the claimants had the knowledge required to bring an action for damages. The defendants named on the claim form were Adcamp LLP (Adcamp), which was the successor to the previous unincorporated partnership known as Pitmans Solicitors, and BDB Pitmans LLP (BDBP), which acquired the Adcamp business in December 2018.

In light of the limitation issues, the claimants issued the claim form without engaging in pre-action correspondence and then sought to comply with the professional negligence pre-action protocol before serving the claim on the defendants. Multiple extensions of time for serving the claim form were agreed between the parties or ordered by the court, due in part to the defendants' delays in producing client files and in responding to the letter of claim.

In August 2023, the claimants wrote to the defendants' solicitors noting that their investigations had established that the entity providing advice in 2008/9 was Pitmans, not Adcamp. In September 2023, the claimants amended the claim form to add Pitmans as a defendant and remove BDBP, and then served the claim form on the defendants. Since the amendment was made before the claim form was served, the court's permission was not required.

In October 2023, the defendants applied to strike out the claim on the grounds that the orders extending time for service should be set aside, or the substitution of Pitmans as a defendant should be disallowed. Two days later they filed acknowledgements of service, without ticking the box to indicate that they intended to contest the court's jurisdiction.

A question arose as to whether the defendants should have made an application contesting jurisdiction under CPR Part 11. The defendants applied under CPR 3.10 to correct any error of procedure in that regard.

The following issues arose for determination:

1. Whether the defendants should have expressly contested jurisdiction and, if so, whether relief should be granted to correct that error.
2. Whether Pitmans had standing to apply to set aside the orders extending time for service, despite the fact that it was not a party at the time they were made.
3. Whether any of the orders extending time should be set aside.
4. Whether the court should disallow the substitution of Pitmans as a defendant.

Decision

Mrs Justice Bacon rejected the defendants' application to set aside the extensions of time for service, and the substitution of Pitmans, and therefore dismissed the application to strike out the claim.

1. The jurisdiction issue

CPR 11 sets out the procedure for disputing the court's jurisdiction to try a claim. CPR 11(5) provides that if a defendant files an acknowledgment of service, and does not then make an application under CPR 11 within the stated period, it is to be treated as having accepted that the court has jurisdiction to try the claim. It was common ground that, in the present case, the defendants had not indicated in their strike out application or in their acknowledgement of service that they intended to contest the court's jurisdiction.

The judge referred to Hoddinott, referred to above, in which the Court of Appeal confirmed that CPR 11 is engaged where a defendant argues that the court should not exercise jurisdiction on the grounds that an order extending time for service of the claim form should be set aside, and that an application to set aside the extension of time does not disapply the requirement to contest jurisdiction under CPR 11.

However, the judge also referred to Pitalia v NHS England [2023] EWCA Civ 657, in which the Court of Appeal distinguished Hoddinott on the grounds that, in the circumstances of that case, the relevant procedural errors could be corrected by the court under CPR 3.10. That rule provides that an error of procedure does not invalidate any step taken in the proceedings unless the court so orders, and the court may make an order to remedy the error.

The judge held that the procedure for challenging jurisdiction under CPR 11 should have been followed in the present case. However, as in Pitalia, it was appropriate for the court to use CPR 3.10 to remedy the situation. The defendants' strike out application had made it clear that they intended to bring the claim against Pitmans to an end on the basis that the extension of time orders should be set aside, so that the claim was served out of time. There was no suggestion that the claimants understood the defendants to have abandoned their application to set aside the orders extending time for service. As in Pitalia, therefore, the defendants’ error was a technical one which could be readily corrected under CPR 3.10.

2. Standing

Pursuant to CPR 3.3(5), where the court has made an order without a hearing, parties "affected by" that order have the right to apply to set it aside.

The defendants acknowledged that, under CPR 19.4(9), a new defendant does not become a party to the proceedings until the amended claim form has been served on it, which in this case took place after the extension of time orders had been made. However, they argued that it would be unjust if a new defendant did not have standing to challenge procedural decisions made prior to its involvement.

The judge rejected that argument, observing that: "Rule 3.3(5) cannot sensibly be interpreted as giving a party subsequently joined to the proceedings the right to seek to unravel any and all orders made under r. 3.3(4), which may have been made years previously, and which may long since have been fully implemented by the relevant parties to the order."

She held that the right to apply to set aside applies only to the parties to the relevant order, and cannot be relied upon by a person who is subsequently added as a party to the proceedings. That did not, however, mean that a party added to proceedings is necessarily fixed with all of the consequences of previous procedural orders. CPR 3.1(7) provides the court with a broad discretion to vary or revoke an order, including where there has been a material change of circumstances since the order was made (see Tibbles v SIG [2012] EWCA Civ 518).

In the present case, Pitmans did not have standing to seek to set aside the orders extending time for service under CPR 3.3(5), and it did not seek to rely on CPR 3.1(7).

3. Extensions of time

In light of the above conclusion, it was not necessary for the court to consider the substantive merits of the application to set aside the extension orders. However, the judge found that such an application would have been rejected on the merits in any event.

Although the claim form was served almost 15 years after the cause of action had accrued, there were good reasons for the various extensions of time, including that (1) Adcamp had been dissolved and needed to be restored to the register; (2) BDBP and its solicitors delayed in producing the client files relating to the matter despite multiple chasers from the claimants; and (3) there was a four-month delay in the service of BDBP's full response to the letter of claim. Further, the claimants could not fairly be criticised for the time taken to identify that Pitmans rather than Adcamp was the correct target for the claim. BDBP's response to the letter of claim had also referred to Adcamp as the entity which issued the disputed advice. It was not immediately apparent that it was a case of mistaken identity and the claimant had acted promptly once it became aware of the mistake.

4. Substitution of defendant

In relation to Pitmans’ application to disallow its substitution pursuant to CPR 17.2, the question before the court was whether the substitution of Pitmans as a defendant should be disallowed in all the circumstances of the case. It was common ground that, in an application under CPR 17.2, it is relevant to consider whether the court would have granted permission to amend the claim form if permission had been necessary.

Here, because Pitmans was added as a defendant after limitation had expired, CPR 19.6 would have applied. That allows the court to add or substitute a party if the relevant limitation period was current when the proceedings were started (as was the case here) and the addition or substitution is “necessary", including because the original party was named in mistake for the new party. The judge noted that this includes where an LLP has been mistakenly named as defendant to a claim for solicitors' negligence where the services had been provided by the former partnership (see Insight Group v Kingston Smith [2012] EWHC 3644 (QB)).

The judge rejected the submission that the substitution should be disallowed on grounds of delay and consequent prejudice to Pitmans. Pitmans was represented by the same solicitors as Adcamp and BDBP, who had been aware of the substance of the claim since June 2021, and were covered by the same insurers. Although there had been delays in identifying the correct defendant, the the claimants had pursued the claim with reasonable diligence, and the delays had largely not been of their making. The judge concluded that it was in the interests of justice to allow the claim to proceed against Pitmans.