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 II: The Revenge

  Mitchell has been ‘softened’.  On Friday, the Master of the Rolls delivered his judgment in the three cases of Denton v TH White Ltd: Decadent Vapours Limited v Bevan & Ors.: Utilise Limited v Davies and Ors.  In essence, the Court of Appeal declared that Mitchell had been “misunderstood” and emphasised that the new CPR 3.9 entailed a clear three stage test.  The “Guidance” section starts from paragraph 24… It is necessary to identify and assess the seriousness of the failure to comply.  If the breach is insignificant then the court is unlikely to need to spend much time on 2 & 3.  This is a shift away from the old classification of triviality, which was criticised.  Further, past defaults are immaterial; The court must consider why the default occurred, albeit this is not derived from CPR 3.9 per se; The court will evaluate all of the circumstances so as to deal justly with the application including factors (a) and (b) from CPR 3.9, namely (a) for litigation to be conducted efficiently and proportionately; and (b) to enforce compliance with Rules and Orders.  These factors were to be given particular importance. Interestingly, Jackson LJ gave a dissenting judgment.  In his view, factors (a) and (b) should be given no greater weight than “all the circumstances” of a case.  Whilst that difference in opinion made no difference in these three appeals, it certainly could do in other cases. Overall, the Denton et al. judgment has sought to engender (or reintroduce?!) more of a balancing exercise into this assessment.  The Court of Appeal further emphasised that it expected a spirit of co-operation to continue in litigation, such as I alluded to in my previous post on Mitchell.  Indeed it confirmed that the courts should penalise “opportunistic” parties in costs. Accordingly, the Court of Appeal concluded that it did not expect many 3.9 applications to be contested henceforth.  It wants an end to this genre of satellite litigation.  Nevertheless, I have a nasty feeling that we haven’t heard the end of this subject.  I will let you know if there is to be a trilogy…