The Woodwards’ claim was very stale, and (we thought) of very limited merits. Despite that, they continued to pursue it. Proceedings were issued just within the limitation period and, with only two working days to go before the claim form expired, those proceedings were served on Mills & Reeve. Although we were acting for the defendant we had never been asked if we would accept service, and nor had we suggested that we would.
What should a defendant, or its lawyers, do in such a situation? Should they tell the Woodwards’ solicitors, before the expiry of the claim form, that service was ineffective. If we did so the proceedings would then be validly served and satellite litigation would be avoided, but we might be in breach of our duty to our own client. If we did nothing then the proceedings would probably expire, and any new proceedings would be statute barred. Clearly an outcome that brought the claim to an end was in our client’s best interest. Following discussion with the client, we did not tell the Woodwards’ solicitors that service was ineffective until after the claim form lapsed. The Woodwards applied for service to be validated, and/or the need for service to be set aside.
Barton remains the right approach
This is the background to the Court of Appeal’s decision this morning in Woodward v Phoenix. This case looked like it might lead to an arguable reduction of the generally understood effect of Barton v Wright Hassall and a risk that a defendant, who has done nothing to contribute to a mistake by their opponent, might owe a duty to warn their opponent of an apparent mistake. Any obligation to warn an opponent of a mistake could seriously undermine the adversarial system. At its extreme, could it be argued that a defendant (or their lawyers) have an obligation to tell their opponent that they have failed to spot a better cause of action than the one they are actually bringing?
Pleasingly for litigators, the Court of Appeal’s approach is what many would probably have expected. Barton, which was handed down after the first instance decision in Woodward, remains the correct approach. The decision provides helpful guidance on the inter-relationship between the service rules in CPR 6.15, the overriding objective under CPR 1 and the provisions for relief from sanction under CPR 3.9. However, we think that the most important aspect is the discussion around a litigant’s duty to the court and their opponent.
Key messages from the Court of Appeal
There are three key messages from the case. The first is that the rules around service of proceedings remain particularly important for the proper conduct of litigation. A party who ignores them, or courts disaster by doing everything at the last minute, does so at their own risk. The message is clear. Allow yourself time to effect service properly.
Second is that the Court of Appeal expressly rejected the argument that there was a duty owed to the court by a party to litigation, or their lawyers, to warn their opponent of an error. It had been suggested at first instance that it was part of the overriding objective to do so in order to help aid the effective running of the court process. The Court of Appeal has accepted that so long as that party has neither caused nor contributed to the other side’s mistake, it will not amount to “playing technical games”. The decision relates to the issues of service arising under CPR 6.15, but the principles might well be considered when assessing a parties’ conduct of litigation once proceedings are safely underway.
And third, it is “quite proper” to consider your own client’s interests only, even though there would be time for the mistake to be rectified if you did speak up.
Richard Dawson-Gerrard and Sandra Morrison of Mills & Reeve acted for Phoenix. If you have any queries about the professional indemnity aspects of this case, or the issues arising, please contact Niall Innes or any of your contacts within the Mills & Reeve insurance team.