UK: No Duty On Solicitor To Inform Opponent Of Error In Service

Last Updated: 10 September 2018
Article by Herbert Smith Freehills

The High Court has held that there was no good reason to validate service retrospectively where the claimant's solicitors had served proceedings on the defendant's solicitors shortly before expiry of the claim form without having obtained confirmation that the solicitors were instructed to accept service: Phoenix Healthcare Distribution Ltd v Woodward [2018] EWHC 2152 (Ch).

The Master had found that there was good reason to validate service on the basis that the defendant's solicitors had engaged in "technical game playing" by deciding not to draw the claimant's attention to the error in service while there was still time to correct it. Although the Master accepted that there was no breach of any duty to the claimants, or any professional duty, he considered that this was a breach of the defendant's duty to the court to help further the overriding objective.

The High Court disagreed, emphasising that the culture introduced by the CPR does not require a solicitor who has not contributed to an opponent's mistake to draw attention to that mistake. This is in line with comments of Lord Sumption in Barton v Wright Hassall LLP [2018] UKSC 12 (considered here), where he said the defendant's solicitors were under no duty to notify the claimant's solicitors that service was invalid (in that case because the claimant served by email without the defendant's consent), even if they realised that was the case in time for the error to be corrected. The Master had considered those comments but, rather surprisingly, reached a different conclusion, saying he did not regard Barton as having given a definitive answer on the point.

This decision gives welcome clarification, in circumstances where the Master's decision had muddied the waters. It should not, however, be regarded as giving carte blanche to solicitors to stay silent in all circumstances where an opponent has made an error. The decision suggests that there would or may be a duty to speak out where a party's own conduct has contributed to an opponent's misunderstanding on a significant matter. It also leaves open the position where the situation calls for a response from the party who is aware of the error, as for example if the claimant's solicitors in this case had sought specific confirmation that service was to be treated as effective. The judge said he did not need to consider that situation.

Background

The claimant issued proceedings on 19 June 2017, one day before its causes of action (in contract and misrepresentation) became potentially time-barred. On 17 October 2017, the claimant's solicitors sent the claim form and particulars of claim to the defendant's solicitors, expressly by way of service, by email and first class post. The defendant's solicitors provided a "read receipt" to the email, but otherwise did not respond until 20 October, the day after the four-month period of validity of the claim form had expired.

On that day, the defendant's solicitors wrote to the claimant's solicitors pointing out that they were not authorised to accept service of the claim form; therefore service was invalid and there were no live proceedings. The claimant's solicitors immediately took steps to serve the claim form at the defendant's address, but that was one day too late.

The claimant applied for an order retrospectively validating service under CPR 6.15. This provides that, where it appears to the court that there is a good reason to authorise service by a method or at a place not otherwise permitted by CPR Part 6, the court may make such an order, including an order that steps already taken to bring the claim form to the attention of the defendant amount to good service.

The Master granted the application. He did not consider that a solicitor had any duty to an opposing party to draw attention to their mistake, where the mistake was not of the solicitor's making and arose in a situation not calling for a response. Nor was there any professional obligation to do so. However, he considered that the defendant's solicitors were in breach of a duty to the court, under CPR 1.3, to help the court to further the overriding objective. This, together with the fact that the purported service had resulted in the claim form coming to the attention of the defendant within its period of validity, meant there was good reason to make the order under CPR 6.15.

The defendant appealed.

Decision

The High Court (HHJ Hodge QC sitting as a High Court judge) allowed the appeal and set aside the Master's order.

The judge held that CPR 1.3 does not require a solicitor who has in no way contributed to a mistake on the part of his opponent, or his opponent's solicitors, to draw attention to that mistake – even if there is still time for the opponent to rectify it. Such conduct does not amount to "technical game playing".

The judge referred to Abbott & Anor v Econwall UK Limited & Anor [2016] EWHC 660 (IPEC), which the claimant sought to rely on. In that case, HHJ Hacon granted an order validating service retrospectively in circumstances where the defendant failed to correct the claimant's misunderstanding as to the extent of an extension of time which had been offered, and as a result the claimant failed to serve proceedings in time.

In the present case, HHJ Hodge said he agreed with HHJ Hacon that the overriding objective does require parties to take reasonable steps to ensure, so far as reasonably possible, that there is a clear understanding between them as to the issues and procedural arrangements in the litigation. But the duty to speak out requires there to have been a genuine misunderstanding that has arisen regarding a significant matter. The present case was different because the defendant and its solicitors had not contributed to the mistake, and it had arisen in a situation which did not call for a response on the part of the defendant.

HHJ Hodge noted that the claimant's solicitors could have sought specific confirmation that service was to be treated as effective. He left open the question of what the position might have been if they had done so, saying he did not need to consider that.

HHJ Hodge was also critical of the claimant's solicitors' reasons for delaying service until the end of the claim form's period of validity. The Master had concluded that the decision to delay service until particulars of claim could also be served was a wholly reasonable one. HHJ Hodge disagreed, saying that by leaving service to the last moment they had "courted disaster".

In his view, the claimant's solicitors should have served the claim form and then sought an extension of time for service of the particulars of claim, either by agreement with the defendant or on an application to the court. An application to extend time for service of particulars is not subject to the stringent requirements governing service of originating process in CPR Part 6, but is instead determined pursuant to the court's general case management powers. Once the claim form had been served, the judge commented, the court would have had significant flexibility to grant extensions of time for service of the particulars.

Finally, HHJ Hodge said that his conclusions as to the overriding objective were given further support by the Supreme Court's decision in Barton, referred to above. Although on the facts of Barton there would have been no opportunity to remedy the defective service within time, Lord Sumption went on to address the situation if there had been time. His view was that there was no duty to warn the claimant's solicitors of the defect, and they could not have done so without taking their client's instructions, in which case Lord Sumption thought it was hardly conceivable that the client would have authorised them to do so and thereby deprive the defendant of a limitation defence. Although Lord Sumption did not refer to CPR 1.3, he could not have thought it was appropriate for the defendant to have refused to authorise their solicitors to give such a warning if he had regarded it as inconsistent with their duties under the overriding objective.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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