In Woodward & another v Phoenix Healthcare Distribution Ltd1 the Court of Appeal applied the Supreme Court's decision in Barton2 and found that the Defendant had no duty to correct an opponent's mistake when serving proceedings, despite a short window of opportunity to do so.

Background

The Claimants sought over £5M from Phoenix for alleged breaches of contract and misrepresentation. Proceedings were issued on 19 June 2017, one day before limitation expired. Just before expiry of the four month service window, proceedings were served on the Defendant's solicitors by first class post (with copies sent by email). However, the Defendant's solicitors ("M&R") had not confirmed they were authorised to accept service of proceedings. M&R were aware of attempted service before the deadline expired, but on instructions let it pass before confirming Phoenix's position: that service was defective.

The Claimants sought an Order that service was good, alternatively it be dispensed with, or retrospectively validated. At first instance, service was retrospectively validated; the Master decided there was a good reason to do so (per CPR 6.15) as M&R and its client had engaged in technical games, and failed – contrary to the Overriding Objective – to warn that service was defective before the deadline expired.

On appeal HHJ Hodge reversed the decision: Phoenix in no way contributed to the Claimants' mistake, and owed no duty to correct it. The Judge relied upon Barton (which concerned a similar service error, albeit in Barton the Defendant was unaware of the mistake before the deadline passed) where Lord Sumption found there was no duty to warn. Whilst the Overriding Objective requires parties to take reasonable steps to ensure, as far as reasonably possible, there is a clear common understanding between them on the issues in the litigation and related matters (including procedural arrangements), that did not impose a duty to speak here.

Court of Appeal Decision

On a second appeal the Court of Appeal unanimously upheld HHJ Hodge's decision, finding that the facts were indistinguishable from Barton. Whilst Lord Sumption in Barton did not expressly refer to the Overriding Objective, it was implicit that he had considered it. Lady Justice Asplin commented:

"It is hard to see that taking the point that service was invalid, as in Barton, together with acting in a proper professional manner in researching the position, advising the client and taking their instructions can be recast as "technical games"."

Implications

This is a decision about service of proceedings. The Court of Appeal reinforced the distinction between (1) rules concerning service of proceedings, and (2) procedural rules governing the conduct of a claim after valid service. As such, the case law3 around inappropriate opposition to applications for relief from sanction (where a litigant has failed to comply with procedural rules during the course of litigation) is unaffected by this judgment.

In relation to service of proceedings, the door on applications for retrospective validation of service is not closed completely. Depending on the facts, the Court could still find there is a good reason to allow a claim to proceed. For example, the Court of Appeal recognised that the outcome could have been different if there had been a substantial period between defective service and limitation expiring. However, the overriding message is that those acting for Claimants are taking risks by delaying service of proceedings until the end of the relevant period, and they should take heed to ensure that service is effected properly.

Footnote

1 [2019] EWCA Civ 985

2 [2018] UKSC 12

3 E.g. Denton v White [2014] EWCA Civ 906

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