Serving the claim form. Failing to serve within four months 52%

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1 Andrew Nickels Zurich Professional Welcome Serving the claim form a fundamental aspect of the litigation process. Despite a raft of case law on the issue, as well as warnings from professional indemnity insurers, many solicitors still manage to get service wrong. In our experience, after failure to issue, failures in service are the second most common cause of claims in litigation. And yet they could be so easily avoided by a full understanding of the law relating to service and by effective diary management. It s not rocket science! Serving the claim form Are you one of our claims statistics? Could you be? And it s not just the claim form that has to be served within four months: Failing to serve at all 17% Defective service 31% Failing to serve within four months 52% The Insured acted in a personal injury claim and served the claim form within the required four-month period. However, they overlooked the fact that although under CPR 7.4(1)(b) fourteen days are allowed between the service of the claim form and service of the particulars of claim, the particulars must be served no later than the latest time for serving the claim form (CPR 7.4(2)). The Insured served the particulars outside this four-month period. Failing to serve within the four-month period allowed by the CPR Inadequate critical date management is the main source of claims. Failure to appreciate the distinction between actual service and deemed service is another common cause: The Insured acted for a claimant against his former employer in connection with an injury sustained at work. They issued the claim form three days before the expiry of the limitation period but in the absence on holiday of the fee-earner with conduct, did not post it until the day before the deadline for service. In accordance with CPR 6.7 it was deemed to have been served the day after the last day for service. The defendant had the claim struck out. It was irrelevant that the defendant had actually received the claim form before the deemed date. At the hearing the judge refused to exercise his discretion to dispense with service. He did not regard the circumstances as exceptional, merely run of the mill litigation matters. The Insured were instructed in a clinical negligence claim and issued for limitation purposes. The fee-earner with conduct had every intention of serving the claim form in time, but omitted to do so as she had concentrated upon the medical evidence and lost sight of the four-month date for service. The claim form was eventually served five days late. The defendants had the claim struck out. The Court of Appeal in Totty v Snowden [2001] EWCA Civ 1415 ruled that under CPR 3.10 the courts have a discretion to extend the time for service of the particulars of claim. Even so, better to serve within the four months so you don t have to rely on the courts discretion to bail you out. Defective service Failing to identify who to serve is the primary problem: The Insured acted in a professional negligence claim. Three days before the final date for service, as a result of a clerical error, the Insured served on the defendants insurers rather than the defendants direct. The insurers returned the claim form, but the Insured failed to serve the defendants until the day after the final date for service. The claim was struck out. Note that in RTA cases, the claimant may have a direct right of action against the insurer under the European Communities (Rights against Insurers) Regulations The Insured were instructed in contribution proceedings. They served proceedings on the defendant, but later discovered a letter on the file from the defendant s solicitors stating that they were authorised to accept service. The proceedings were struck out and could not be re-issued as limitation had expired. Page 1 of 6

2 Or it could be the other way round: The Insured acted for a claimant in clinical negligence proceedings and should have served the defendant direct. Instead they served the claim form on the defendant s solicitors who had not been nominated to accept service. The claim was struck out. More obscure legal rules also catch out solicitors: The Insured acted in a claim against the Ministry of Defence. Under the Crown Proceedings Act 1947 the claim form should have been served on the Treasury Solicitor. Despite being informed of this requirement by the MOD s solicitor and of the fact that the Treasury Solicitor would accept service, on the day before the deadline for service, the Insured attempted to effect service on the MOD. The court refused the Insured s application for an extension of time. It s not just who you serve, what you serve is also important: The Insured acted in a RTA case. Close to limitation they issued proceedings and sent notice to the defendant s insurer under the Road Traffic Act A few days before the period for service was due to expire the Insured served the particulars of claim on the defendant s solicitors, but failed to include the claim form itself. This was not noticed until two months later when the defendant s solicitors informed the Insured that they had not received the claim form. The Insured s application for an extension of time was refused and they were unable to re-issue proceedings as limitation had expired. Failing to serve at all The Insured acted in a personal injury claim. Proceedings were issued close to the limitation period. The file was transferred from one of the Insured s offices to another. It was then mistakenly sent to the Legal Services Commission who in turn sent the file to the defendant s solicitor. The Insured did not realise the file had been missing until it was returned by the defendant s solicitor. By this time the four-month period for service had expired. The Insured were instructed in a personal injury claim. The fee-earner who had been dealing with the matter left the firm and failed to tell anyone that proceedings had been issued. He had also failed to register the issue of proceedings in the Insured s computer diary. The case was transferred to another fee-earner, but for several months she was unable to locate the file and failed to tell the partners that it was missing. When the file was eventually located it became apparent that the date for service had been missed by four months. If you do get service wrong the courts are unlikely to rescue you leading cases Vinos v Marks & Spencer [2001] 3 All ER 784 (CA) Under CPR 7.6(3) the power to extend the time for service can only be exercised if the conditions in that rule are satisfied: a) the court has been unable to serve the claim form; or b) the claimant has taken all reasonable steps to serve the claim form but has been unable to do so; and c) in either case, the claimant has acted promptly in making the application. Kaur v CTP Coil Ltd [2001] CT Rep 34 Difficulties in preparing evidence to serve with the claim form did not amount to taking all reasonable steps to serve it. Smith v Probyn Times, March The defendant must have expressly authorised his solicitor to accept service. A solicitor does not generally have implied authority to accept service of a claim form on behalf of a client. Nanglegan v Royal Free Hampstead NHS Trust [2001] EWCA Civ 127 When solicitors have been nominated to accept service, service on them is mandatory. Elmes v Hygrade Food Products [2001] EWCA Civ 121 The claimant served the defendant s insurers rather than the defendant. The court refused to correct this error. Godwin v Swindon Borough Council [2001] EWCA Civ 1478 The deemed date of service is not rebuttable by evidence that the defendant actually received the claim form earlier than the deemed date. The Court also held that service could not be dispensed with to extricate a claimant from the consequences of late service where CPR 7.6(3) was unavailable. Page 2 of 6

3 ! Mummery LJ in Anderton there will be... very few (if any) acceptable excuses for future failures to observe the rules for service of the claim form. The courts will be able to adopt a strict approach, even though the consequences may sometimes appear to be harsh in individual cases. Anderton v Clwyd County Council [2002] EWCA Civ 933 Under CPR 6.7 Saturday and Sunday are not excluded from the calculation of deemed day of service by first class post. This can lead to surprising results: a claim form sent by first class post at 5.15pm on a Friday is deemed to be served on Sunday; a claim form served by fax at 5.15pm on a Friday is deemed to be served on Monday; a claim form served personally at 5.15pm on a Friday is deemed to be served on Monday. Under CPR 6.9 and only in exceptional circumstances the courts have power to dispense with service retrospectively as well as prospectively. This will not be used to circumvent the restrictions on granting extensions of time in CPR 7.6(3). A distinction was drawn between two types of cases: 1) Where no attempt has been made to serve the claim form by a permitted method (Category 1 cases). This is caught by Godwin and any application for service to be dispensed with will fail, as it would be an attempt to circumvent CPR 7.6(3). 2) Where a claimant has made an ineffectual attempt to serve the claim form within the four-month period and the defendant has received or had his attention drawn to the claim form by a permitted method of service within that four-month period or an extension thereof (Category 2 cases). In exercising its discretion on whether to dispense with service the court may consider relevant circumstances such as... the explanation for late service, whether any criticism could be made of the claimant or his advisers in the conduct of the proceedings, and any possible prejudice to the defendant on dispensing with service. For an example, see Hashtroodi v Hancock [] EWCA Civ 652 where the Court of Appeal was highly critical of the conduct of the claimant s solicitor (@risk June ). Wilkey v British Broadcasting Corporation [2002] EWCA Civ 1561 This was a Category 2 case where the claim form had been served by hand on 28 February It was deemed irrebuttably to have been served on 1 March 2001 a day out of time. The Court of Appeal set out clear guidelines on dispensing with service: In pre-anderton Category 2 cases the court should normally exercise its dispensing power in favour of claimants. In post-anderton Category 2 cases the dispensing power should not normally be exercised in the claimant s favour except in exceptional circumstances. In Wilkey itself the court did exercise its discretion to dispense with service. However, this was a pre- Anderton case. Had it been a post-anderton case the claimant s application would probably have failed. Cranfield v Bridgegrove Ltd [2003] EWCA Civ 656 In Cranfield and associated appeals the time for service of the claim form had expired before the judgment in Anderton. So in some cases the court did dispense with service of the claim form. However, the court would not now exercise their discretion in that way. Two of the applications the court refused were: Claussen v Yeates The court sealed the claim form, gave a copy to the claimant, but stated that it would not serve until given a copy letter from the defendant s solicitors saying that they were authorised to accept service. The claimant s solicitors waited until a few days before the time for service ran out before sending the letter to the court. Despite the urgency they only asked the court to serve the claim in due course. The court failed to serve the claim form in time, or indeed at all. The Court of Appeal held that it was unrealistic for solicitors to expect the court to effect service almost immediately, and refused to extend the time for service or to dispense with service. McManus v Sharif The last date for service of the claim form was Tuesday 19 June On Friday 16 June the claimant's solicitors sent the defendant's insurers by way of service an unsigned and unsealed draft copy of the claim form, along with a letter stating that they would fax the sealed claim form the following Monday (which they failed to do). The Court of Appeal refused to dispense with service: what was purportedly served was not the issued claim form or a copy, but a draft claim form which was not sealed and did not contain a statement of truth; by saying they would fax it the following Monday the claimant's solicitors had made it clear they were not serving the claim form; furthermore, service should have been on the defendant, not on his insurers. Page 3 of 6

4 If the defendant is a company consider s.725(1) of the Companies Act 1985 In Murphy v Staples UK Limited (again part of the Cranfield tranche of cases) it was held that service on a company at its registered office under s.725 (1) of the Companies Act 1985 is an alternative to service under the CPR, even if one party has elected to have service effected by another route. However, Dyson J suggested that if parties could make a binding contract to effect service by one particular route, service by any other means may well not be effective. Court service duty to follow up? Still with Cranfield, while acknowledging the possibility a court, through neglect, might fail to serve the claim form, Dyson J raised the possibility that when a claimant s solicitor asked the court to serve, he may be under a duty to follow matters up if he doesn t receive a certificate of service or a notice of non-service within a reasonable time of the date of issue of the claim form. How have the lower courts been applying these principles? Recent case law How far does the claimant have to go in finding out the defendant s current address when serving at the defendant s last known place of business under CPR 6.5(6)? In Smith v Hughes (reported under Cranfield), the Court of Appeal, without deciding the point, inclined to the view that CPR 6.5(6) is... directed at the knowledge, which exercising reasonable skill and care, [the claimant] could acquire. In Mersey Docks Property Holdings v Kilgour [] EWHC 1638 (TCC) the claimant s solicitors had attempted to serve an architect who had moved away from the address at which they had attempted service. Judge Toulmin QC held that the proper construction of CPR 6.5(6) is the... last place of business known to the claimant. He described this as... relatively onerous since in order to acquire the requisite knowledge a party must take reasonable steps to find out at the date of service what is the current place of business or the last place from which the party carried on its business it will be a matter of evidence whether or not a party has discharged the obligation to have the requisite knowledge at the time of service. It was held that the claimant s solicitors had not taken all reasonable steps to find out the architect s last place of business. They had initially obtained his details from seven year old project documents. They carried out an internet directory enquiry search against the name of the architect and the name of his former company which only revealed his address prior to They carried out a search of the Royal Institute of British Architects directory of practices which did not reveal any entries as the architect was practising under a different name from that searched under. Toulmin J criticised the claimant s solicitors for waiting... until almost the last moment of the six years and four months before attempting service. He also pointed out that had they sent a letter before action it is likely that the claimant s solicitors would have discovered the defendant s current address or would have had an opportunity to make further enquiries before serving the claim. The claimant s application for an extension of time for service of the claim form was rejected. The claimant is currently seeking leave to appeal this decision. An even more disturbing case from a claimant solicitor s point of view Horn v Dorset Healthcare NHS Trust. CC (Southampton) (Judge Hughes QC) 4/5/ This was an appeal of a Deputy District Judge s order that the court had no jurisdiction to hear the claim as the claim form had not been validly served. The claimant s solicitors had written to the defendant several times asking it to nominate solicitors, and requesting that any solicitors nominated write to them confirming that they were authorised to accept service. After being chased, the defendant eventually nominated solicitors and gave those solicitors DX address as the address for service. However, the DX address contained a misplaced digit. A few days before the final date for service, despite having repeated their request, the claimant s solicitors had still not received confirmation that the nominated solicitors were authorised to accept service. So they followed the guidance in the Green Book and served the defendant direct. In fact, it was not until eight days after it acknowledged service that the defendant actually instructed the solicitors it had nominated. Page 4 of 6

5 The The mistake in the address Judge Iain Hughes QC held that the error in the DX address was a... mere typographical error [and] not an error such materiality to remove the case from the ambit of CPR 6.5. He found that the correct business address for the nominated solicitors had been given! Authority of solicitors to accept service The claimants argued that there has to be an actual retainer or actual authority for a solicitor to accept service. While describing this as a powerful argument the Judge nevertheless rejected it. He stated: validity or otherwise of service of a claim form ought not to depend on whether or not the solicitors nominated by a defendant to accept service had at the moment of service actual as opposed to some other form of authority to do so, or indeed no authority at all the terms of the letter [from the defendant] constitutes a representation to the claimant s solicitor that the named solicitors acted for the defendant. The claimant s solicitors were thereafter entitled to proceed on that basis and, furthermore, under CPR 6.5 were obliged to proceed on that basis The letter invested [the nominated solicitors] with ostensible authority to accept service on behalf of the defendant. The failure of the nominated solicitors to write to the claimant s solicitors stating that they were authorised to accept service. The Judge rejected the argument that CPR implies an obligation on the defendant s solicitors to confirm to the claimant s solicitors that they were indeed instructed to accept service and that in the absence of such confirmation the claimant s solicitors are entitled to serve the claim form as if no solicitors were acting for the defendant at all. The Judge held that Nanglegan... is not an authority for such a proposition Although it is true that such a letter had been written in the case itself nothing in fact turned on that point it was simply part of the surrounding circumstances and had no material bearing on the decision in that case. But what about the White Book? The notes at of Volume 1 of the edition of the White Book state: Where the defendant has nominated solicitors, who in turn have notified the claimant s solicitors that they are instructed, service of the claim form on the defendant rather than on his solicitor is not valid service. This is widely taken to mean that for service to be validly effected on a solicitor there must be a notification from that solicitor that he is instructed by the defendant. Indeed, many courts insist on evidence of such a notification before they will serve upon that solicitor (see Claussen above). However, the Judge in Horn found that the note in the White Book was not well founded and instead followed his own interpretation of the CPR. It s hard to see what else the claimant s solicitors could have done. After all, they wrote a letter before action, and followed the notes in the Green Book (which are repeated in the White Book) before serving the defendant direct. It was not the claimant s solicitors fault that the defendant was dilatory in its response and gave an incorrect address for service. However, incredibly, the appeal hearing still went against them. So what should you do in a similar situation? Unfortunately there seems to be no definitive answer. While Horn is a County Court judgment, which is persuasive only, it is the only case which directly addresses the issue. The decision does seem to fly in the face of common sense, but it must be remembered that the courts do take a stringent view of the rules which govern service of proceedings. So if faced with a similar dilemma one possible answer might be to apply to the court for directions. Explain the situation and ask for guidance. It s safer to raise the matter with the court while there is still time to take action rather than waiting until the period for service has expired. In support of this conclusion he also stated...where such a letter is required by the Civil Procedure Rules the rules make specific provision for one. If the authors of Rule 6.5 had [intended such a requirement] I would have expected express words to have been used. Page 5 of 6

6 ! Serving the claim form reduce your chances of becoming another claims statistic Always send letters before action as, in various guises, they are required by all the specific preaction protocols (construction and engineering disputes, defamation, personal injury, clinical disputes, professional negligence, judicial review, disease and illness, housing disrepair) as well as the general Pre-action Protocol Practice Direction. Make sure you are fully familiar with CPR 6.7. the deemed day of service is what counts, not the date the claim form is actually received. You must serve the actual sealed claim form, not an unsigned draft. It s not just solicitors who get it wrong. If the court is to effect service and you do not receive a certificate of service or a notice of non-service within a reasonable time of issue, chase the court, and well within the four-month service period. Don t expect the court to read your mind. If the matter is urgent tell them so, or better still, serve yourself. Always serve within the four-month period for doing so. If you don t even attempt service within this period then any application for an extension of time is unlikely to succeed. Serve the right person: the defendant, not his insurers; or the defendant s solicitors where they have been nominated. It s not just the claim form that must be served within four months of issue the particulars of claim must also be served within this period. If serving by post ensure it is by first class post, and record the date of sending. Consider whether in some circumstances it may be more advantageous to serve by first class post rather than by fax or personal service. If serving the claim form (or any other document) by fax or , always refer to the Practice Direction to CPR Part 6 to ensure that you know and meet its stringent requirements. If there is a risk that service will be out of time, use every method under CPR 6.2 to make sure a copy reaches the right person in time. Telephone to make sure it has arrived. If the defendant is a company you could always consider leaving the claim form, or sending it by post to the company s registered office under s.725(1) of the Companies Act If serving at the defendant s last known address, make sure you have taken reasonable steps to discover their most up-to-date address. If you do encounter problems apply for an extension before the period for service runs out. Have a system for marking the date for service clearly on the file. If solicitors have been nominated, mark this clearly on the file too. Maintain a centralised diary system: Enter the four-month period for service as soon as proceedings are issued. Provide for regular reminders about service on a countdown basis. Monitor the diary system and use file audits to ensure critical dates are not only entered, but are actioned on time. Establish a system of buddying so that in the absence of any fee-earner, someone else will be responsible for accessing and actioning critical diary dates, including those relating to service. If taking over a case from another firm, check at the outset whether proceedings have been issued within limitation and if they have been served. If it s absolutely unavoidable that you are issuing proceedings towards the end of the limitation period, pay particular attention to ensuring you serve the claim form and particulars on the right person within four months of issue. Get it wrong; you won t be able to re-issue and you will almost certainly become one of our claims statistics. Contact Zurich Professional Contact Zurich Professional PP111668A11 (10/04) TSW Risk Management Andrew Nickels Tel riskman@zurichprofessional.co.uk General Enquiries and Sales Tel solicitors@zurichprofessional.co.uk Claims Helpline Claims Fax Zurich Professional 90 Fenchurch Street London EC3M 4JX The material contained is issued by Zurich Professional Limited and does not establish, report or create the standard of care for solicitors, nor does it represent a complete analysis of the topics presented or constitute legal advice. It is intended to highlight issues which may be of interest to our customers. Readers should conduct their own appropriate research on how to act in any particular case. A member of the General Insurance Standards Council. Copyright Zurich Professional Limited Page 6 of 6