Court of Appeal clarifies the effect of a stay.

A rather simple question, but not previously subject to authority, had to be answered by the Court of Appeal this month: does a stay of proceedings apply to service of a Claim Form? This was the question answered in Grant v Dawn Meats (UK) [2018] EWCA Civ 2212.

Background

The Claimant was employed by the Defendant and suffered an accident at work on 30 September 2013. Liability was admitted but the parties were unable to agree quantum. The Claimant therefore issued a Claim Form on 24 June 2016, prior to limitation expiring on 30 September 2016.At the same time, due to the need for up-to-date medical evidence, the Claimant sought a stay of the proceedings, which the Court ordered 13 days later on 7 July 2016. The stay expired on 30 November 2016.

The Claimant ultimately served its Claim Form on 6 March 2017, just under 4 months after expiry of the stay.

The Defendant applied to strike out the claim on the grounds that the Claim Form had not been served in time. The Defendant argued that the stay did not affect the Claimant’s obligation to serve the Claim Form within 4 months of issue i.e. by 24 October 2016. The Claimant argued that the stay applied to service of the Claim Form as well. Given that limitation had expired in the meantime, if the Claimant was wrong then his claim would have been out of time.

Decision

The Court of Appeal considered the High Court case of UK Highways A55 Limited v Hyder Consulting (UK) Limited [2013] BLR 95 which answered the same question in relation to service of Particulars of Claim. There, the Court found that a claimant had the balance of the usual 14 days remaining Grant v Dawn Meats (UK) + London | Bristol | Dublin | Dubai www.beale-law.com following the expiry of the stay in which to serve the Particulars of Claim. The Defendant argued that different rules apply to Claim Forms and that proceedings do not “really have a legal life until they are in fact served” – i.e. effectively there are no “proceedings” to stay until the Claim Form is served.

The Court of Appeal rejected that argument and reversed the High Court decision, holding that the stay also applied to time to serve the Claim Form. The stay meant that time had “frozen” until the stay expired or was lifted. Given that the stay was ordered 13 days after the issue of proceedings, this meant the Claimant had 4 months less 13 days to serve the Claim Form after the stay expired on 30 November 2016. Service was therefore in time. The Court said that any other interpretation would make the stay effective for some issues but not others, introducing an unnecessary level of complexity into what should be a straightforward situation.

Conclusion

Whilst the Court of Appeal was clear that it did not find the question “particularly complex” and it was not a surprising decision, Defendants and their insurers should still carefully scrutinise any purported service of proceedings. The courts take a strict approach in scrutinising whether the service of proceedings has been effected properly or not. There have been a raft of decisions in the last year where claims have been struck out due to defects in service, including two High Court cases where Beale & Company have acted for the successful Defendants:

 Failure to serve a Claim Form within time following it being sent previously “for information” only (Higgins v ERC Accountants & Business Advisers Ltd [2017] EWHC 2190 (Ch)) –– see our article here.

 Failure to effect proper personal service on a defendant by serving on a defendant’s receptionist (Peak Health Distribution Limited v Harris Lacey & Swain (a Partnership) (2018) – see our article here.

 Failure to obtain permission to serve via e-mail (Barton v Wright Hassall LLP [2018] UKSC 12).

 Failure to serve properly due to the negligent advice on service abroad from the claimant’s foreign solicitors (Société Générale v Goldas [2018] EWCA Civ 1093)