pnBlawg

the professional negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

Adding a new cause of action after expiry of limitation

It is well known that a court can permit a party to amend its case to plead a new cause of action even though, had it been starting such a claim in freestanding proceedings, it may have been statute-barred. CPR 17.2 provides that the court “may allow an amendment whose effect will be to add or substitute a new claim, but only if the new claim arises out of the same facts or substantially the same facts as a claim in respect of which the party applying for permission has already claimed a remedy in the proceedings”.   What if the parties cannot agree as to whether the limitation period for the new claim has expired or not? Such a situation can arise where there is a dispute as to a claimant’s date of knowledge. In Chandra v Brooke North [2014] TCLR 1 Jackson LJ said (at paragraphs 65-67) that there are essentially two options. The court can treat it as a “conventional amendment application”. It will not descend into factual issues seriously in dispute, but rather will consider whether the defendant has a “reasonably arguable case on limitation”. If the court refuses permission to amend the claimant can issue fresh proceedings in respect of the new claim; the defendant can plead its limitation defence and the limitation issue can be determined at trial (often as a preliminary issue).   0 0 1 346 1973 1 Chancery Lane 16 4 2315 14.0 Normal 0 false false false EN-US JA X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:Cambria; mso-ascii-font-family:Cambria; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Cambria; mso-hansi-theme-font:minor-latin; mso-ansi-language:EN-US;} On whom does the burden lie to prove or disprove the limitation defence? That was issue for the Court of Appeal in Mercer v Ballinger [2014] EWCA Civ 996. The Master of the Rolls decided that the burden was on the Claimant to prove that the Defendant did not have a reasonably arguable limitation defence. Thus he held (at paragraph 27): “The claimant is after all in effect inviting the court to make a summary determination that the defence of limitation is unavailable. If the availability of the defence of limitation depends upon the resolution of factual issues which are seriously in dispute, it cannot be determined summarily but must go to trial. Hence it can only be appropriate at the interlocutory stage to deprive a defendant of a prima facie defence of limitation if the claimant can demonstrate that the defence is not reasonably arguable.”

Mitchell revised?

A little light relief for Friday afternoon. A decision of Males J started doing the rounds last week:  Vivek Rattan v UBS AG, London Branch [2014] EWHC 665 (Comm). It is well worth a read, not least because it is short. The case concerned misselling (or as the Claimant put in its skeleton argument “misspelling”) of investments. The Claimant took the point that the Defendant’s costs budget had been filed less than the required seven days before the relevant CMC. Applying Mitchell (which of course also involved late service of a costs budget) the Claimant contended the Defendant was only entitled to court fees. Males J described this argument as “manifest nonsense”. That might seem surprising. Is this the start of the tide turning against the harshness of the Mitchell regime? It is nothing of the kind. Reading the case itself dispels any such a notion. The Claimant’s solicitors had written to their opponents asking for confirmation that they would file their budget “on 28 February 2014”; the Defendant’s solicitors agreed that they would file it “by 28 February 2014”. They filed it on 28 February 2014. That was six, not seven, clear days before the CMC. What is the difference between this case and Mitchell? As Males J put it with heavy irony, “the unsophisticated reader might think that [the correspondence] was the clearest possible agreement that a costs budget exchanged on 28 February 2014 would be in time but [Counsel for the Claimant] submits that such a reader would have failed to grasp the true subtlety of this correspondence”. The judge rejected this submission holding: “It is clear that there was an agreement. Even if [the Claimant’s] strained construction of the correspondence had been justified, the Defendant’s solicitors understanding of the position was entirely reasonable. If relief from sanctions had been necessary, which in my judgment it was not, the case for such relief would have been overwhelming”. In this author’s view, Rattan does not signal a dilution of the Mitchell principles. Instead, it is an illustration of the difference between a genuine Mitchell point and one which is, in the words of Males J, merely “futile and time-wasting” and will be discouraged by the courts. As Leggatt J put it in Generali Romania Asigurare Reasigurare SA v Ardaf SA Insurance & Insurance Co [2014] EWHC 398 (Comm): “The decision ... in Mitchell ... has rightly been described as a “game changer” [...]. It is important for litigants to understand, however, how the rules of the game have changed and how they have not. The defendants in this case have sought to rely on Mitchell to turn to their tactical advantage a short delay by the claimants in providing security for costs which in itself had no material impact on the material impact on the efficient conduct of litigation. [...] The defendants’ stance disregarded the duty of parties and their representatives to cooperate with each other in the conduct of proceedings and the need for litigation to be conducted efficiently and at proportionate costs. It stood Mitchell on its head.”