Woolf - a year on: Striking out of claims

Introduction

Traditionally, cases were only struck out once the limitation period had expired, regardless of how extensive the delay in prosecuting them had been while the limitation period was still running. Despite fears that cases would be more readily struck out by Judges for delay following the commencement of the Civil Procedure Rules in April 1999, this expectation has not been entirely realised.

Cases since Woolf

Strike-out has been one of the most canvassed areas of the CPR and already there is considerable case law on the subject. The first major case was Biguzzi v Rank Leisure plc [1999] 1 WLR 1926. Despite extensive delay in the case, an application to strike it out for want of prosecution was dismissed because it was still possible for a fair trial to take place. However, the District Judge held that there had been a “wholesale disregard of the rules” and struck it out on that ground instead.

On appeal, the Circuit Judge recognised that there had been defaults on both sides, and a degree of obstruction by the defendant’s solicitors. The case was reinstated. The Court of Appeal agreed with the Circuit Judge’s decision. Lord Woolf stated “The fact that a judge has [the power to order a strike out] does not mean that in applying the overriding objective the initial approach will be to strike out the statement of case. The advantage of the CPR over the previous rules is that the Court’s powers are much broader than they were. In many cases there will be alternatives which enable a case to be dealt with justly without taking the draconian step of striking the case out.”

The cases which have been decided since Biguzzi have been interesting in their interpretation of the Court of Appeal’s findings.

In Target Holdings Ltd v Oxborough & ors Court of Appeal (Civil Division) 28.10.99, proceedings had been commenced in 1990. Protracted settlement negotiations ensued. In July 1998 the defendants applied to have the claim struck out for want of prosecution or abuse of process. An order on both these grounds was made on 5 October 1998 by a District Judge. In February 1999 a High Court Judge held that the plaintiff had not been guilty of contumelious default, inordinate or inexcusable delay, wholesale disregard of court rules or abuse in the form of bringing proceedings with no intention of bringing them to a conclusion. Notwithstanding these findings, the action was struck out as an abuse of process on the ground that it was unconscionable for the plaintiff to proceed having had such little regard to its responsibilities to progress the action. The plaintiff appealed and succeeded in having the claim reinstated. The Court of Appeal said that even in light of the current greater readiness of courts to strike out for non-compliance with the rules, such action was still only to be taken where it was fair and just to do so and where there had been “complete, total and wholesale” disregard with the full awareness of the consequences. As found by the judge, the plaintiff could only be condemned for failing to progress the claim expeditiously. However such allegations were dressed up, they only amounted to delay, which on its own could not be a sufficient reason to strike out a claim

In UCB Bank plc -v- Halifax (SW) Ltd, CA, 6.12.99: NLD, 6.12.99, however, the Court of Appeal took a much tougher line. The claimant had commenced proceedings against the defendant firm of surveyors in October 1995, seeking damages for breach of contract or negligence, alleging that they had over-valued a property. The claimant repeatedly failed to comply with the rules and orders of the court, notwithstanding the defendant’s repeated reminders. In May 1999 the defendant applied to have the claimant’s action struck out. The action was struck out as an abuse of process on the grounds of the claimant’s wholesale disregard of the rules and orders of the court. The claimant appealed. The Court of Appeal dismissed the appeal, holding that the judge’s decision was correct notwithstanding the decision in Biguzzi and was entirely in line with the underlying purpose of the new rules. The decision of Biguzzi did not exclude striking out as being the proper approach where the abuse was sufficient to justify such an extreme remedy.

In Purdy v Cambran Court of Appeal (Civil Division) 17.12.99, the claimant sustained severe injuries in a road traffic accident in July 1989. Proceedings claiming damages for injuries sustained were commenced in November 1992 shortly before the expiration of the primary limitation period. In March 1993 the defendant admitted liability and in September 1994 the claimant obtained judgment for damages to be assessed. Thereafter the action failed to progress. In January 1999 the defendant applied to have the action struck out for want of prosecution as an abuse of the process of the court. The application was refused by the District Judge. The defendant appealed and succeeded in having the action struck out by a Judge. The claimant appealed to the Court of Appeal on the ground that the judge had wrongly exercised his discretion. The appeal was dismissed. The Court of Appeal held that the strike out application in issue was a transitional case in that it was started under the old regime but was heard by both the District Judge and Judge after the introduction of the CPR. Accordingly the CPR applied and the powers to strike out to be considered were those to be found in CPR rr 3.4(2)(c), 3.1(2)(m) and 3.1(1). The Court considered the two previous cases of Biguzzi and UCB Bank plc and reiterated that the CPR was a new procedural code with an overriding objective enabling courts to deal with cases justly and ensure that cases were dealt with expeditiously and fairly. When considering an application to strike out a claim, earlier authorities were no longer generally relevant when the CPR applied: Biguzzi. The decision in Biguzzi emphasised the range of powers available to the court under the CPR in its search for justice but did not indicate that any one power was more appropriate. The decision to strike out depended on all the circumstances of the individual case. In UCB Bank plc the court did not differ from that approach but emphasised that the underlying thought processes of previous decisions should not be completely thrown overboard. Under the CPR, judges exercising their case management powers were not to have their decisions interfered with unless they had contravened relevant principles; see Biguzzi. Accordingly, on the facts of the present case the judge had exercised his wide discretion fairly and justly in all the circumstances and the court would not interfere.

The Human Rights dimension

A new dimension has recently been added to strike-out criteria with the reporting of Arrow Nominees Inc and another v Blackledge and others, in which judgment was handed down on 2 November 1999. The case itself had none of the hallmarks of greatness, being a simple application to strike out a petition for relief under section 459 of the Companies Act 1985 on the basis that one of the parties had forged certain documents in the proceedings. For various reasons the Judge decided that the forgery was not such a gross contempt of court that the claim ought to be struck out, and it was allowed to continue. He did, however, add the comment that the striking out of a case, notwithstanding the Court’s decision that a fair trial could follow, might well be a breach of Article 6 of the European Convention on Human Rights, which protects citizens’ rights to a fair trial. In light of the imminent enactment (on 2 October 2000) of the European Convention by means of the Human Rights Act 1998, this argument may begin to be seen more frequently.

Conclusion

Parties who are found guilty of a wholesale disregard of the rules of the Court may have difficulty resisting applications for the striking-out of their claims (or defences) at first instance. Nevertheless, in the absence of actual prejudice to the opposing party, the Court of Appeal may be reluctant to uphold those decisions, especially in light of Arrow Nominees.

For further information contact Tim Hardy, Head of Commercial Litigation and Dispute Resolution on +44 (0)20 7367 3000 or e-mail
[email protected].