Written by Peter Yates
Woodward & Ors v Phoenix Healthcare Distribution Ltd  EWCA Civ 985 is the latest procedural skirmish in the ongoing battle between Claimants and Defendants. Following on from the Supreme Court’s judgment in Barton v Wright Hassall LLP  UKSC 12, it is an important reminder – if any were needed – that Claimants must be familiar with the rules on service of claim forms, and with the other side’s procedural stance.
The Claimants in Woodward alleged breach of contract and misrepresentation. The claim was said to have had a value in excess of £5 million. Limitation expired on 20th June 2017. The claim form was issued on 19th June 2017 and should therefore have been served by no later than midnight on 19th October 2017.
The claim form, particulars of claim and annexes were sent to the Defendant’s solicitors by first class post and by email on 17th October 2017. However, the Defendant’s solicitors were not authorised to accept service, and neither they nor the Defendant had ever confirmed in writing that the solicitors were authorised to accept service. The proceedings had not been served on the Defendant directly. The Defendant’s solicitors: took the view that they were not required to notify the Claimants of their mistake; took instructions from their client; and waited until 20th October 2017 to inform the Claimants of their error.
The Claimants immediately took steps to serve the Defendant directly, and the claim form and particulars arrived with the Defendant just after 11am on 20th October 2017.
The Claimants sought a declaration that their purported service on the Defendant’s solicitors had been good service, or that service should be dispensed with or the time for service extended.
The Claimants succeeded at first instance, and a declaration was made pursuant to CPR 6.15 that there was “good reason” to validate service of the claim form retrospectively. The Defendant’s appeal succeeded.
The Court of Appeal dismissed the Claimant’s subsequent appeal. Barton was cited extensively, and Asplin LJ (giving the judgment of the Court of Appeal) held that this case was “all but indistinguishable” from Barton. Several points of significance arise from the judgments:
- CPR 16.5 and 3.9 (on relief from sanctions) are entirely different. The latter involves a “disciplinary factor” which is less important in considering the rules on service of claim forms. The rules governing service of claim forms “do not impose duties … [t]hey are simply conditions on which the court will take cognisance of the matter at all”.
- Whether there is “good reason” for validating non-compliant service of a claim form is fact-specific.
- The test is whether “in all the circumstances, there is good reason to order that steps taken to bring the claim form to the attention of the defendant is good service”.
- Although the question of whether the content of a document has been brought to the attention of the recipient is “a critical factor”, “the mere fact that the defendant learned of the existence and content of the claim form cannot, without more, constitute a good reason to make an order under rule 6.15(2)”.
- “The question is whether there is good reason for the Court to validate the mode of service used, not whether the claimant had good reason to choose that mode”.
- “In the generality of cases, the main relevant factors are likely to be (i) whether the claimant has taken reasonable steps to effect service in accordance with the rules and (ii) whether the defendant or his solicitor was aware of the contents of the claim form at the time when it expired, and, I would add, (iii) what if any prejudice the defendant would suffer by the retrospective validation of a non-compliant service of the claim form, bearing in mind what he knew about its contents”.
- Defendant solicitors are under no duty to advise Claimants that service is invalid.
- A Claimant who waits until the very end of the limitation period to issue a claim form, and until the very end of the four-month period thereafter to attempt to serve it, “courts disaster” and “can have only a very limited claim on the court’s indulgence in an application under CPR rule 6.15(2)”.
- The potential prejudice to a Defendant if defective service is retrospectively validated is “palpable”; they would be deprived of an accrued limitation defence.
- The observation at paragraph 41 of Denton v White  EWCA Civ 906 that it is “wholly inappropriate” to take advantage of an opponent’s mistake “was directed at inappropriate resistance to applications for relief from sanctions which are bound to succeed and was made in a different context”.
- A Defendant solicitor who notices that service is invalid, researches the position, advises his or her client and takes the point that service is invalid is not playing “technical games”. The position is different where the Defendant has deliberately obstructed service (as, for example, in Abela v Baadarani  UKSC 44, where the Defendant, who was outside the jurisdiction, had declined to disclose an address at which service could be affected).
The judgment is a helpful reiteration of the duties of the different parties in litigation. Those seeking absolute clarity, however, are inevitably disappointed. The Claimant had attempted to distinguish this case from Barton on the basis that in this case, but not in Barton, there had been time to rectify the mistake, if the Claimants had been warned. The Court of Appeal rejected this reliance on “fine timing” and cited the observation of Lord Sumption in Barton, that even if there had been time to warn, there was no duty to advise of the error. Asplin LJ immediately goes on, however, to state: “Of course, depending on the facts, the position may well be different if there is a substantial period before the expiry of the limitation period.” It is difficult to see how this can be squared with Barton. How long must the period before purported service and the expiry of limitation before the position “may well be different”? What other facts may be relevant? All this remains to be seen.