All is fair in love and law: Is there a duty to inform the opposing party of its mistakes?

Thu, 20 Jun 2019

The recent decision of the Court of Appeal in Woodward v Phoenix Healthcare Distribution Ltd [2019] EWCA Civ 985 provides an important clarification as to whether lawyers have a duty to inform the opposing party of their mistakes when conducting litigation. 

Background

The claimant appealed against a decision which overturned an order made by Master Bowles to retrospectively validate service of the claim form under CPR r.6.15(2) on the defendant’s solicitors, who had not notified the claimant that they were authorised to accept service.

The claimant issued the claim form on 19 June 2017, the day before the expiration of the limitation period on 20 June 2017. Pursuant to CPR r.7.5(1), the claim form had to be served no later than midnight on 19 October 2017. On 17 October 2017, two days before the expiry of the time allowed for service, the claimant sent the claim form, particulars of claim and a response pack by first class post and email to the defendant’s solicitors. The defendant’s solicitors were not authorised to accept service. They had not notified the claimant that they were so authorised, nor had the claimant asked them. The defendant’s solicitors took instructions and decided that they would not inform the claimant that service had been invalid until after the expiry of the deadline.

On 20 October 2017, the defendant’s solicitors duly notified the claimant that they were not authorised to accept service. The claimant took immediate steps to comply with service and the necessary documentation was properly served on the defendant by courier, first class post and email just after 11am on 20 October 2017, 11 hours after the deadline.

The claimant successfully applied for retrospective validation of service pursuant to the court’s discretion under CPR r.6.15(2). Master Bowles held that the defendant had an obligation to the Court under CPR r.1.3 to give effect to the overriding objectives rather than indulging in “technical game playing”. This decision was reversed by HHJ Hodge on appeal.

Judgment

The Court of Appeal unanimously dismissed the appeal of HHJ Hodge’s decision. LJ Asplin made the following findings in her judgment:

  1. The Supreme Court in Barton v Wright Hassall LLP [2018] UKSC 12 was clear that there is no positive duty to advise an opposing party of its own error. This finding was therefore inconsistent with Master Bowles reasoning that there had been a breach of CPR r.1.3 occasioned by the failure to warn. Further, Denton v White[2014] EWCA Civ 906 did not apply to the issues raised here.  The comment at paragraph 41 of Denton v White that it was "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.[1] 

  2. The defendant’s decision to accept the advantage given by the claimant’s failure was not “technical game playing”. The defendant solicitors had acted legitimately by taking its client’s instructions on how to proceed and deciding not to notify the claimant before the deadline. The situation could be distinguished fromAbela v Baadarani [2013] UKSC 44 as the defendant’s solicitors had not contributed to the claimant’s error or tried to obstruct service.

  3. The claimant had courted disaster with its last-minute approach to service. LJ Asplin affirmed Lord Sumption’s comments in Barton, that such an approach can have only a very limited claim on the court's indulgence”. The claimant should have served the claim form and sought an extension of time for service of the particulars of claim. There was far more leniency in the rules relating to an extension compared to the rules regulating service. It had been unreasonable for the claimant to risk failing to comply with the deadline by delaying service to such an extent.

Observations

The judgment is a reminder of the importance of ensuring absolute compliance with the rules on service, particularly where a limitation deadline is approaching. It is always a risk to rely on the Court to correct errors, even if the failure to comply appears to be merely technical. Prompt service of the claim form and particulars of claim will find favour with the Court as the claimant’s dilatory approach to service was an important factor in the Court’s decision. 

It is important to note that the situation is no more lenient when dealing with a litigant in person. Although Woodward v Phoenix did not concern a litigant in person, the Supreme Court in Barton clearly stated that the defendant was under no duty to warn the claimant litigant in person that service was invalid.[2] 

The fact that there had been time for the defendant to warn the claimant of its error, unlike in Barton, did not impose a duty on the defendant to do so. The judgment, however, leaves the door ajar on this issue as LJ Asplin notes that: “the position may well be different if there is a substantial period before the expiry of the limitation period”.[3]

 

[1] [2019] EWCA Civ 985, [48]

[2] [2018] UKSC 12, [22]

[3] [2019] EWCA Civ 985, [46]

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