When the Supreme Court gave its decision in Barton v Wright Hassall earlier this year, many litigators thought that it simply affirmed the position as we had always understood it. A party to litigation doesn’t ordinarily owe their opponent any duty to point out to them when they have made a mistake. The significance of the Supreme Court’s decision was to make it clear that the position is no different when your opponent is a litigant in person. In light of that decision, it might reasonably have been assumed that there could be no doubt of the position where your opponent is represented.
It was therefore of surprise to many when Master Bowles, in Woodward v Phoenix Healthcare Distribution Ltd, concluded that the overriding objective required a party to tell his opponent of their error in serving proceedings in a defective manner. In this case, the claimants, represented by solicitors, served proceedings on solicitors (Mills & Reeve) acting for the defendant. We had not been asked, and had not confirmed, that we were instructed to accept service. As such, the purported service on this firm was defective. By the time the proceedings were served on the defendant itself, the claim form had expired, and the defendant would therefore have a prospective limitation defence if fresh proceedings were issued.
The Master characterised the defendant’s failure to tell the claimants’ solicitors of their error before the claim form expired, to be “technical game-playing” and in breach of the overriding objective.
An appeal was last week heard by His Honour Judge Hodge QC, sitting as a Chancery Division Judge. He has allowed the appeal setting aside the order of Master Bowles and has restored what, we suggest, is the expected position. His decision was given orally so it will be a while before there is an approved transcript, but his views were as follows:
- It is important to appreciate that the mistake was not of the defendant’s making
- The Master had insufficiently taken into account the Denton principles which were essentially addressing inappropriate resistance to relief from sanctions
- The culture introduced by the CPR does not require a solicitor who has in no way contributed to a mistake made on the part of an opponent, or by an opponent’s solicitors, to draw attention to that mistake. There is no such requirement in CPR 1.3 and the failure to draw attention to the failure does not amount to technical game playing
- Neither the CPR nor the overriding objective requires the court to impose on a party a duty to inform an opponent of an error which has been made, even if there is time for the opponent to cure that error. Defendants’ solicitors are not under a duty to correct errors where they have in no way contributed to those errors.
- Parties are not obliged to inform others of mistakes when it is not in their best interests to do so; each side must look after itself
- There is no obligation to correct a misunderstanding where it would deprive a defendant of a substantive limitation defence
- In this case, unlike Barton, there was no inequality of arms. The parties were on an equal footing. Both had reputable and competent firms acting
- The approach taken by the claimants and their solicitors courted disaster since leaving service until last minute involves risk. It doesn’t matter if the claimant thinks there is good reason to wait until the last minute but in doing so and if something goes wrong, as in this case it did then the claimant will suffer the consequences.
Many might have thought that the decision was inevitable. The lesson to be learned is age-old. If a party chooses to issue and serve proceedings at the very end of the limitation period, they should do so with extreme care, and at their own risk, especially if they are represented. If they get it wrong, they risk disaster and they need be shown no quarter by their opponent, or their solicitors, if they do make a mistake.
The outcome might be very different if a defendant or their lawyer causes or contributes to the claimant’s error. For instance, if a defendant provides inaccurate information about the defendant’s identity, one can assume that a court would be reluctant to make an order dismissing an action when the claimant pursues the defendant they were told to pursue.
However, where the defendant has co-operated and has not contributed to the claimant’s error, their co-operation does not need to be at the expense of their potential defences, especially when limitation is in play. The significance of the decision lies in the fact that the decision of Master Bowles should no longer be relied up to suggest that litigants are practising in some form of non-adversarial dispute in which the parties work together to achieve a particular outcome. If your opponent makes a mistake, your client is perfectly free to take advantage of that error, so long as the error is that of the opponent alone.
If you would like any further information then please feel free to contact Niall Innes of Mills & Reeve’s insurance team. Alternatively you can contact Rachael Somerset, who assisted Richard Dawson-Gerrard with the appeal on behalf of Phoenix.