Kerry Underwood

PORTALS: PUTTING CASE ON WRONGLY: WRONGLY USING PART 8 AND NOT PART 7: NO STRIKE OUT

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The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

These principles, and the whole issue of Qualified One-Way Costs Shifting, is dealt with in my book – Qualified One-Way Costs Shifting, Section 57 and Set-Off – Available from me here for £15.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

Cable v Liverpool Victoria Insurance Co Ltd [2020] EWCA Civ 1015

the Court of Appeal held that an action should not be struck out because the claimant had wrongly used the portal and Part 8 procedure, instead of Part 7.

In so doing, it overturned the decision of the District Judge, which in turn had been upheld on appeal by the Circuit Judge.

The claimant placed the matter, which arose out of a road traffic accident in September 2014, on the Road Traffic Accident portal, but a subsequent medical report indicated that the claimant was absent from work and the claim would be much higher than the portal limit.

The defendant sought further information but got little response, with the claimant engaging in what the District Judge termed “radio silence”.

In July 2017 the claimant issued a Part 8 claim form and a stay was granted until August 2018 and the court ordered that a copy be sent to the defendant by August 2017, but this was not done until February 2018.

Part 8 is the procedure for dealing with the matter under Stage 3 of the portal system.

In August 2018 the claimant’s solicitors informed the defendant that the case was substantial and applied to lift the stay and for the matter to proceed under Part 7, and that application was granted without notice.

The defendant applied to set aside the without notice order; the District Judge did so and refused permission for the matter to proceed by way of Part 7 and the claimant’s appeal to the Circuit Judge was dismissed and the effect was that the claim was stuck out.

 

The Court of Appeal put the issue in this way: 

 

“2. But what happens if, following the making of a claim under the RTA Protocol, Part 8 proceedings are started and then immediately stayed on the false premise that the claim is or remains a low value RTA claim, when it is (or should have been) obvious to the claimant’s solicitors that the claim was worth almost a hundred times more than £25,000? That is the question raised in this appeal. In the light of the many failures on the part of the appellant’s solicitors, the district judge declined to lift the stay and transfer the claim to CPR Part 7. In consequence, she struck out the claim altogether. The circuit judge upheld her order. The issue for this court is whether she was right to have done so.”

 

The Part 7 claim form claimed £2.2 million.

The Court of Appeal stated that the real issue is whether the claimant’s conduct warranted the draconian penalty of his claim being struck out, as that was the effect of refusing to lift the stay.

The key issue therefore was whether the claimant’s conduct was an abuse of process.

Firstly, the court has to determine whether the claimant’s conduct was an abuse of process, and if it was, then the court has to exercise its discretion as to whether or not to strike out the claim, with particular reference to the proportionality of that penalty.

The lower courts had erred in not recognising that the true nature of the decision was a strike out and consequently had failed to address the issues to be determined on strike out.

 

“66. The consequences of this flawed approach can be seen most obviously at [67] and [68] of her judgment. At [67] she said that, in all the circumstances, it would not be a proper exercise of her discretion to allow the appellant’s solicitors to transfer this case to Part 7, “so I’m not going to exercise that discretion”. As she recognised at [68], “that leaves that claim form in limbo. The stay has expired. I have not granted permission to lift that stay and therefore the court has no other option but to strike a claim out”.

67. For the reasons that I have given, I do not think that that was the right approach. The striking out of a claim should never become the sort of administrative afterthought which DJ Campbell describes in these passages. For that reason, therefore, I have concluded that it is necessary for this court to consider afresh the two stages of the test identified in Asturion. Was there an abuse of process and, if so, what is the appropriate sanction for that abuse? In particular, was it proportionate to strike out the claim?”

 

The Court of Appeal then proceeded to consider the matter afresh.

It found that there was an abuse of process by the claimant.

However, in the exercise of its discretion, taking into account that the defendant had admitted liability and the claim had been issued in time, the Court of Appeal held that there was no prejudice to the defendant, except delay, whereas there was obvious, severe prejudice to the claimant in having his admitted claim struck out.

He would then need to sue his solicitors for negligence, and that would be a loss of a chance claim, and not necessarily for the full value.

As a sanction the Court of Appeal ordered that the claimant pay the defendant’s costs on the indemnity basis up to and including the hearing before the District Judge, and recover no interest on special damages before the same date, 17 October 2018.

The stay was lifted, and the matter transferred to Part 7.

My write-up of the Circuit Judge’s decision appears here in my blog

£2.6 MILLION CLAIM SHOULD NOT GO ON THE PORTAL: CLAIM STRUCK OUT

Written by kerryunderwood

August 4, 2020 at 12:34 pm

Posted in Uncategorized

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