Out-Law News | 07 Jan 2016 | 5:24 pm | 3 min. read
The individuals in this case, each of whom was pursuing law firm Ward Hadaway for negligence, all ultimately paid the appropriate court fees when they amended their claims at a later date. Deputy High Court judge John Male QC said that it would be disproportionate to strike out the claims entirely, but ruled against the individuals on the grounds that their claims were now out of time.
Civil litigation expert Alan Sheeley of Pinsent Masons, the law firm behind Out-Law.com, said that the case should act as a warning to lawyers to pay the correct court fees when issuing a claim. Court fees have recently increased substantially, and the suggestion in this case was that the individuals only wanted to stop the limitation period running before paying the correct, higher fee at a later date, he said.
"The individuals in this case saved thousands of pounds in the short term, but this case has determined that if the payment of the correct court fee is after the limitation date for issuing a claim form then the claimant will be time barred from pursuing the claim," he said.
"It must be remembered that a claim form is supported by a statement of truth. Therefore, claimants and their solicitors must consider the likely damages that will be sought from the defending party and only sign the claim form if they truly believe, at the time of signing, that the sum to be claimed is as accurate as possible. This can be difficult to do in some cases, such as in fraud cases where a claim in support of a freezing order or a disclosure order must be issued as quickly as possible. However, as long as the claimant can support his rationale for the sum detailed on the claim form there will be no abuse of process," he said.
All the claim forms at issue in this case had been submitted by the same law firm, despite four previous rulings from various district judges that these tactics amounted to an abuse of process. Ward Hadaway argued that this deliberate behaviour should be sufficient grounds on which to have the claims struck out entirely. However, the judge said that this would lead to "substantial prejudice" against the individuals, who would be "deprived of the opportunity to have their arguable claims for substantial sums of money tried" on their merits.
Under the Civil Procedure Rules (CPR), which govern proceedings in the civil courts, judges' powers are limited by an overriding objective to "determine cases justly". Deputy Judge Male stated that there were "other sanctions open to the court" apart from striking out the claim entirely, such as penalising the claimants on costs at a later stage in the proceedings.
However, the judge upheld a separate claim by Ward Hadaway for summary judgment in favour of the firm on the grounds that the individuals' claims were now time barred. Previous case law on the question of whether a case had been "brought" under the terms of the 1980 Limitation Act had established that the claim form had to be delivered to the court on time "accompanied by a request to issue and the appropriate fee", but the appropriate fee in these cases had not been paid until after the limitation period had expired, he said.
"In these circumstances … I consider that the claimants did not do all that was in their power to do to set the wheels of justice in motion," the judge said.
"It was within the power of the claimants to conduct themselves in a manner which was not an abuse of process. They could have done so by paying at the outset the fees properly due for the claims which they always intended to make. Equally ... I consider that the claimants did not do all that they could reasonably have done to bring the matter before the court for its process to follow," he said.
Alan Sheeley said that the judgment should not be seen as barring claiming parties from revising their claims as set out on a claim form at a later stage where this was "appropriate".
"This may require claimants and their solicitors to demonstrate their 'workings' and rationale for the claim figure being arrived at in the first instance," he said. "This often occurs in fraud cases where further investigations take place, and preliminary disclosure is obtained, following a search and seize order after having already issued the claim form; although the claim form may not yet have been served on the alleged fraudster."