Kerry Underwood

UNDERPAYMENT OF COURT FEES: AN ABUSE BUT NO STRIKE OUT

with 4 comments


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In Atha & Co Solicitors v Liddle [2018] EWHC 1751 (QB) (09 July 2018)

the High Court was considering an appeal in a case where there had been an underpayment of the issue fee and whether failure to pay the correct fee before limitation expired resulted in the claim being statute barred.

The High Court held that negligently issuing a case without due regard to the correct court fee is an abuse of process, but nevertheless the High Court declined to strike out the case and the High Court Judge said that he realised that he was only able to reach that conclusion by declining to follow previous decisions of the High Court in the cases of

 

Lewis v Ward Hadaway [2016] 4 WLR 6; and

 

Bhatti v Asghar [2016] EWHC 1049 (QB).

 

Here the claimant had brought personal injury proceedings, but following receipt of a joint experts’ report, those proceedings were discontinued and in due course the claimant instructed new solicitors to bring negligence proceedings against her first solicitors.

The six year negligence limitation period expired on 31 March 2016 and the claim form was received by the court on 29 March 2016, but not issued until 7 April 2016, and it was common ground that the relevant date for limitation purposes was the date of receipt by the court, and not the date of issue.

The defendant maintained that as the incorrect issue fee had been paid, that amounted to an abuse of process and the automatic consequence of that was that the claim was not brought until the claim form was issued, that is 7 April 2016, and thus the claim was out of time.

The Circuit Judge held that the statement of value, and consequent underpayment of the court fee, did not amount to an abuse of process, and therefore the matter had been presented to the court in time.

The High Court allowed the appeal in relation to the abuse of process point, finding that there had been an abuse of process, but that this did not automatically lead to a case being struck out or proceedings issued within time being declared to be an abuse and thus issued outside the limitation period.

The judge specifically disagreed with the finding in Lewis v Ward Hadaway that an abuse of process meant that proceedings were issued outside the limitation period.

Here the court referred to the case of

 

Attorney-General v Barker [2000] 1 FLR 759

 

where the court characterised an abuse of process as “a use of the court process for a purpose or in a way which is significantly different from the ordinary and proper use of the court process.”

Here the court said:

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.”

 

The court went on to say that it was entirely satisfied that, but for the implications arising out of the context of the operation of the limitation period in this case, the abuse would not have been serious enough to warrant striking out the claim.

In the court below the parties had agreed that if the court were to find that there had been an abuse of process, then the defendant’s application would automatically succeed and the claim would be struck out, and that was initially how it was presented on appeal to the High Court.

However, the High Court was not satisfied that that was the law and considered the Limitation Act and the Civil Procedure Rules and Practice Direction in relation to the issuing of proceedings.

 

The court ended its decision by saying:

 

However, I would add by way of postscript that the proliferation of irreconcilable first instance decisions over the last few years is such that the time is now ripe for authoritative guidance from the Court of Appeal.”

 

 

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Written by kerryunderwood

August 3, 2018 at 8:24 am

Posted in Uncategorized

4 Responses

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  1. Good morning Kerry,

    Is the book the latest edition dealing with topics on your autumn tour?

    Sent from my iPhone

    Ashiq Patel

    07974 150 777

    ashiq patel

    August 3, 2018 at 8:39 am

  2. Dear Kerry

    On the subject of issue fees we are facing challenges as to the recoverability of issue fees where the Defendants argue the Claimant should have applied for exemption of fees. We have also seen the point pleaded in defence’s.

    Is the onus on the Defendant to establish the claimant qualified for help with fees or is it on the claimant to prove they didn’t qualify?

    Regards

    John

    John Bennett

    August 8, 2018 at 11:44 am

    • John

      My view is that it is on the claimant’s solicitors to show that the claimant did not qualify; essentially it is the same as the duty to mitigate. Also hard to see how it can be a reasonable expense if it was avoidable and unnecessary and on the standard basis it is for the receiving party and not the paying party to show reasonableness and necessity.

      Must also be negligent not to advise the client re fee remission, and the indemnity principle means that the paying party stands in the receiving client’s shoes.

      In any event, cashflow means that every solicitor will want to explore fee remission, so I am with the defendants on this one.

      Kerry

      kerryunderwood

      August 8, 2018 at 12:45 pm


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