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High Court refuses relief from sanctions application when permission to appeal is five months out of time

(1) Margaret Mark (2) Sherma Mark v South Bank Solicitors [2014]

Lyons Davidson’s professional indemnity team successfully defended an application made by claimants for relief from sanctions and permission to appeal five months out of time.

Lyons Davidson acted on behalf a firm of solicitors in a negligence claim brought by two claimants, which related to the conveyancing of five buy-to-let properties.  We engaged in pre-action correspendence with the solicitors acting on behalf of the claimants but at no point were we asked if we were instructed to accept service of proceedings.  On the last day that the claimants could serve the claim form, it was served on Lyons Davidson only.  No attempt was made to serve the form on the former partners of the firm of solicitors we were acting for.

Civil Procedure Rules

We made a successful application to strike out the claimants’ case on the grounds that service of the claim form was invalid and should be set aside.  Under the CPR, the claimants had 21 days to appeal the decision;  they sought permission to appeal five months out of time.

In making its decision, the High Court applied the principles laid down in Andrew Mitchell v NGN [2014] and the guidance given in Denton v T. H. White Ltd, Decadent Vapours Ltd v Bevan and Utilise T.D.S. Ltd v Davies [2014].

The three-stage enquiry set out in Denton for considering whether to give relief from sanctions are:

  • Identifying and assessing the seriousness and significance of the default that engages rule 3.9;
  • Identifying its cause; and
  • Evaluating all the circumstances of the case, including the need for litigation to be conducted efficiently and at proportionate cost (‘factor a’),  and to enforce compliance with rules, practice directions and orders (‘factor b’), so as to enable the court to deal with the application justly.

Relief from sanctions

In making its decision not to grant relief from sanctions, the court considered three points:

  • This was not a case where the court could confidently say that the claimants’ case would be back up and running had it not been for the judge’s procedural failures;
  • The issue of co-operation.  While the court was mindful of the fact that the Court of Appeal in Denton deprecated parties taking procedural, technical points to confound the efficient conduct of litigation, it did not consider that this had arisen in this case, either in respect of the original application or the subsequent opposition to the appeal.  There was a very good reason, dealing with the appeal, why the rules provide for formal procedure where a defendant should be entitled to avail themselves of the rules and simply because its solicitors had engaged in correspondence over a period of time, they should not be deprived of the opportunity to receive service in the usual form.  This was not simply a technical point that was taken.  Lyons Davidson was entitled to say: ‘We have no instruction to accept service and we are not going to notify you to that effect’;
  • Even when the claimants’ solicitors were alerted to the fact that there could have been a procedural error, there was still no urgency or promptness in pursuing an appeal.

The court found that the defendant was entitled to expect that the matter had come to an end upon the decision of the Master to set aside the claim form.  Finality in litigation was an important factor to take into consideration.

For more information on any of the issues raised in this article or on professional indemnity matters in general, please contact Alex Denyer on 0117 904 7003 or email adenyer@lyonsdavidson.co.uk.


Posted on Jul 1st, 2015 by Lyons Davidson