Issue in haste, repent at leisure

Issuing a claim form is important because it stops time running for the purpose of limitation. Where a claimant is up against the end of a limitation period, the claim form may be issued before the particulars of claim can be drafted or have even been thought about in detail. Some of the issues that can arise in these circumstances are helpfully reviewed by Akenhead J in Travis Perkins Trading Company Ltd v Caerphilly County Borough Council.

The Travis Perkins problem

Travis Perkins Trading Company Ltd issued a claim form commencing public procurement proceedings. Particulars of claim followed about three months later, after the expiry of the 30 day limitation period. An issue arose as to whether the “brief details of claim” in the claim form were apt or sufficient to cover what was pleaded in the particulars of claim. If they were not, the causes of action pleaded in the particulars but not in the claim form would be time-barred.

The judge concluded that CPR 16.2, which requires a claim form to contain a concise statement of the nature of the claim and to specify the remedy sought, is not unduly prescriptive. Cases such as Evans v Cig Mon Cymru Ltd indicate that it is possible to look to the particulars of claim as an aid to interpretation. There the claimant had referred in the claim form to “loss and damage arising out of abuse at work” when the claim related to an accident at work. The Court of Appeal held that there was an obvious conflict between the claim form and the particulars and that applying the ordinary rules of interpretation, the words "abuse at work” were a clerical error which could be corrected to “accident at work”.

Akenhead J also said that it is legitimate to have regard to correspondence and applications sent or served at or about the same time as the claim and possibly to look further back at communications between the parties. As long as the claimant has a known genuine cause of action at the time of issuing the claim form and the irregularity is merely a failure to set it out properly, the court will not allow a surrender of substance to form unless irresistibly driven to do so.

The Nomura situation

Travis Perkins illustrates that defectively endorsed claim forms can be cured by subsequent particulars of claim, but this is only possible where the claimant has a known genuine cause of action at the time of issue. The position is very different where at the time of issue the claimant is not in a position properly to identify the essence of the tort or breach of contract complained of.

This was the case in Nomura International plc v Granada Group Ltd. Nomura had been sued in other proceedings but had agreed a standstill with the claimant in those proceedings. Nomura thought that if the claim against it was ultimately proceeded with then it might have its own claim over against Granada, but since its own claimant had not particularised its claim against Nomura, Nomura could not particularise its claim against Granada. In order to prevent the limitation period expiring, Nomura issued a claim against Granada claiming damages in contract and tort for loss suffered as a result of its liability to its own claimant.

Cooke J struck out Nomura’s claim. A claimant has no business to issue a claim form where it is in no position properly to formulate a claim against the relevant defendant and has no present intention of prosecuting the proceedings. The effect of issuing a claim form in such circumstances is to stop the limitation period running and so deprive the defendant of a potential limitation defence. This is an abuse of process.

Defendants need to be careful before entering into standstill agreements with claimants where they may have a claim against a third party and are unable to persuade the latter to enter into a back-to-back standstill agreement. This is not a problem, however, if the claim against the third party can be brought as a “same damage” contribution claim under the Civil Liability (Contribution) Act 1978, since the two year limitation period under s10 Limitation Act 1980 does not begin to run until damages are assessed (Aer Lingus plc v Gildacroft Ltd). Where a contribution claim may not be successful, the defendant should require the claimant to give adequate information about the claim before considering entering into a standstill agreement.

The Pickthall example

In Pickthall v Hill Dickinson LLP Mr Pickthall issued proceedings against Hill Dickinson, alleging professional negligence because the claim was about to become time-barred, even though he knew that the cause of action was vested in his trustee in bankruptcy. He had asked for the cause of action to be assigned to him but this did not happen until after the limitation period had expired.

The Court of Appeal held that it was an abuse to start proceedings in which, even if the claimant proves all the facts he wants to prove and establishes all the law he wants to establish, he will still lose because he does not have a right to sue. It might, however, not be appropriate to characterise the proceedings as an abuse if the claimant does not know, or is uncertain, as to whether he has title to the relevant cause of action (see the recent example of this in Pathania v Adedeji) but Mr Pickthall was aware that he did not have the right to bring the action.

Click here to read the judgment in Travis Perkins Trading Company Ltd v Caerphilly County Borough Council