Time’s Up

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On 22 October 2010 the Court of Appeal handed down judgement in Aktas v Adepta [2010] EWCA 1170 and the related appeal of Dixie v British Polythene Industries Plc. The appeals succeeded and it was held for the first time that failure to serve proceedings within the 4 months prescribed by the Civil Procedure Rules is not necessarily fatal to the claimant’s ability to sue the defendant. The decision has been criticised by defendant representatives who complain that the rules are no longer certain.

Both cases concerned personal injury claims, in both cases liability was admitted either before or soon after issue of proceedings and in both cases the claimant solicitor had failed to serve those court proceedings within the period prescribed by the Civil Procedure Rules. In both instances the primary limitation period had expired after issue but before service of proceedings. In both cases a subsequent set of proceedings was issued, out of time, and the court was asked to exercise its discretion to extend time retrospectively in order that the claims should proceed. In both cases at first instance the defendant successfully argued that the subsequent set of proceedings amounted to an abuse of process, those proceedings were accordingly struck out and leave granted to appeal.

Time limits for claimsFailure to serve proceedings within the allotted 4 month period prescribed by the Court Rules has hitherto been regarded by claimant and defendant solicitors alike as so serious an omission as to render the claim incapable of being resurrected as against the defendant. The only recourse left to the claimant in those circumstances was to pursue his own solicitor for professional negligence.

Failure to issue proceedings within the allotted 3 year limitation period prescribed by statute has, in contrast, long been recognised to be not necessarily fatal to the Claim by virtue of the statutory discretion granted by Parliament in the form of Section 33 of the Limitation Act 1980.

Time limits are of course necessary for sound commercial reasons in order that each party may know where they stand and in the case of the defendant in order that they may know when they can close their books on a potential risk. However at least in the case of Personal Injury claims, parliament has deemed that it is not always fair to apply the rules inflexibly and that the court should have discretion to consider the circumstances of the case and the prejudice to the parties.

In the words of Lord Justice Rix, who gave the leading judgment:

"What therefore is primarily at issue in this appeal is the tension between on the one hand the strictness with which it is clear that mere failure to serve in time is regarded by rules of procedure and the Courts and on the other the statutory concession which Parliament has seen fit to allow to Personal Injury claimants under the provisions of Section 33"

In the Aktas and Dixie appeals the Court of Appeal asked itself "Why should failure to serve in time be treated more harshly than failure to issue in time?", and in a landmark decision held that both omissions should be treated in the same way, with consideration given to prejudice to the parties and the circumstances of the case.

The decision will be welcomed by claimants and their advisers. It will not open floodgates. The vast majority of claims will continue to be issued and served correctly. On the rare occasions when a mistake does happen, the claimant will now be able to ask the court to review the circumstances and assess the prejudice to those concerned, and ultimately in appropriate cases to allow a second set of proceedings to be issued and served 'out of time'.

Defendant insurers might not know where they stand quite so certainly as they did before the judgement, however they will have a pretty good idea that in those cases where they are in active dialogue with the claimant and their representatives, where they have made admissions and even made interim payments, that if the service deadline is inadvertently missed the claimant is likely to be able to rely on this Judgement and succeed.

It is an equitable decision. There are degrees of culpability and it is right that the court should have power to ensure that the sanction should fit the breach.


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