Abuse of Process Does Not Affect ‘Brought’ Within the Limitation Period: Atha & Co Solicitors v Liddle [2018] EWHC 1751 (QB)

The High Court recently heard the case of Atha & Co Solicitors v Liddle [2018] EWHC 1751 (QB), in which the judge decided the effect of an abuse of process on the relevant limitation period.

The claimant commenced professional negligence proceedings against formerly instructed solicitors, who discontinued her personal injury claim, without her permission, on 31 March 2010.

For professional negligence actions, the limitation period is 6 years. This is prescribed by sections 2 and 5 of the Limitation Act 1980.

1.png

A claim is taken to have been ‘brought’ when a claim form is received by the Court (see Practice Direction 7A, paragraph 5.1).

2.png

In Atha, the last possible day for bringing the claim was therefore 31 March 2016.

Pursuant to CPR 16.3, the expected value of claim must be included in the claim form.

3.png

The claimant’s professional negligence solicitor presented the claim form with a court fee of £1,250. This was the appropriate fee for a claim valued between £10,000 and £25,000.

The claim form was received by the Court on 29 March 2016, 2 days before limitation expired. The claim form was then issued on 7 April, 7 days after limitation expired. Following service of the claim form, in August, the claimant subsequently refused an offer of settlement for £25,000, plus costs, which was at the top of the CPR 16.3(2)(b)(ii) bracket.

As a result, the defendant asserted that the claimant’s solicitor had ‘deliberately misstated’ the value of claim to avoid paying a higher court fee, and further alleged that this amounted to an abuse of process. If the claim had not in fact been ‘brought’ when the court received the claim form, but instead, the belated date of issue, then the claim would fall foul of the limitation period.

Accordingly, the defendant made an application for strike out and/or summary judgment, on the basis that the alleged abuse of process had the automatic consequence of statute barring the claim.

The ‘Abuse of Process’ Issue

At 1st instance, His Honour Judge Gargan concluded that the statement of value of claim did not constitute an abuse of process.

On appeal, Mr Justice Turner disagreed with the 1st instance judge. He reasoned, at paragraph 18:

‘The ordinary and proper use of the court process when providing the statement of value on a claim form involves the recording of the unvarnished truth. Deliberately departing from this ordinary and proper use for tactical reasons, such as removing the risk that the issue fee may subsequently be challenged when costs are being assessed, is significantly different from the ordinary and proper use of the court process’.

Even though the High Court judge was satisfied that there had been an abuse of process, strike out was not mandatory and had to be balanced against the overriding objective.

The Limitation Issue

In coming to a decision on whether the claim was ‘brought’ after the limitation period expired, Turner J considered various case authorities on the issue. In the case of Barnes v St Helens Metropolitan Borough Council [2007] 1 WLR 879, the judge noted that Practice Direction 7A, paragraph 5, ‘makes no reference to the adequacy of the statement of value or fee’.

Turner J went on to review the outcome of cases where inaccurate court fees were paid and limitation was contested. In Bhatti v Ashgar [2016] EWHC 1049, Warby J summarised these cases:

‘... appear to identify a clear principle by which the court is to determine whether a claim has been "brought" for the purposes of stopping the limitation from running, the principle being that a claim is only brought for those purposes when the party concerned has done all that is in his power or to set the wheels of justice in motion ... Doing all that is in one's power often, and perhaps ordinarily, involves proffering the correct fee to the court office at the same time as presenting the claim form and the applicable particulars of claim’.

However, Turner J dismissed the claimant’s appeal. He departed from the ‘clear principle’ at paragraphs 61 and 62:

‘... despite the claimant's solicitor's abuse of the process of the court, the claim was brought for limitation purposes at the time the claim form was received by the court and not when it was later issued. The relationship between the claimant and the Court ceased to be transactional at the earlier date.

... delay ... in the issuing of the form was entirely unconnected with the abuse ... Where, as here, the abuse falls very short of such a[n] [egregious] level and has no impact on the timing of the issue of the claim then it may be thought that it would be wrong in principle to permit the provisions of the 1980 Act to be deployed as a tool of retrospective and disproportionately draconian discipline’.

The Court of Appeal has been urged, by Turner J, to provide authoritative guidance and clarity on this issue, which we reviewed in edition 214 of BC Disease News (here).

Full text judgment can be accessed here.

It is worth noting that, although this case concerned a claim in professional negligence, identical analysis of the relationship between Practice Direction 7A and the Limitation Act 1980 would also apply to personal injury claims, governed by the 3 year imitation period, under s.11 of the Act.