The addition of parties after limitation has expired

elliot_kay_pi

By Elliot Kay

 

Godfrey Morgan Solicitors (A Firm) v Michael Arms [2017] EWCA Civ 323

The Appellant firm of solicitors appealed against the decision of a first instance appeal which determined that it had been properly added as a Defendant to a claim for professional negligence despite the prior expiry of the relevant limitation period.

The Respondent had issued proceedings for professional negligence against a company, Godfrey Morgan Solicitors Limited, prior to the expiry of limitation. Proceedings had been issued shortly before the expiry of limitation but had not been served. The Respondent then amended the proceedings to pursue the Appellant as a Second Defendant, Godfrey Morgan Solicitors (a firm), either jointly or in the alternative after the expiry of limitation.

The Appellant applied to have the amendment disallowed pursuant to CPR 17.2 on the basis that it amounted to the addition of a new party which did not satisfy the test set out in CPR 19.5(3)(a), namely, that the new party is to be substituted for an existing party who is named in the claim form in mistake.

District Judge Rogers refused the Appellant’s application. The Appellant’s appealed that decision to HHJ Moloney QC who also dismissed it on the basis that it amounted to “substitution in the alternative”.

A second appeal was pursued to the Court of Appeal where it was allowed. Lord Justice Burnett, who delivered judgment in the Court of Appeal observed that the relevant provisions draw a clear distinction between the addition of a party on the one hand and substitution on the other.

“Substitution” connotes the replacement of one person or thing with another. Here, the Appellant sought to pursue proceedings against two entities as opposed to one and it must therefore amount to the addition of a party not the substitution of one. The importance of that distinction was that CPR 19.5(3)(a) did not permit the addition of a new party following the expiry of limitation, but only the substitution of one. The Court of Appeal held there was no basis of the concept of “substitution in the alternative” and that the amendment must be disallowed.

The link to the judgment of the Court of Appeal can be found here:

http://www.bailii.org/ew/cases/EWCA/Civ/2017/323.html

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