In a recent appeal in Liverpool County Court, His Honour Judge Pearce refused to lift stay where the claim had been issued under Part 8 and stayed for nearly 3 years. The case not only demonstrates the risk to claimants in issuing proceedings and then doing nothing, but also illustrates an opportunity for insurers to seek appropriate remedies when there has been a potential abuse of the Practice Direction 8B process.

The facts

  • The claim was commenced in the RTA Protocol following a collision on 22 August 2011.
  • A CNF was submitted by the Claimant’s solicitors via the MOJ Portal on 5 September 2011 and liability was admitted by the Defendants on 22 September 2011.
  • On 14 March 2012 the Claimant issued an Interim Settlement Pack stating “The Claimant’s medical evidence is incomplete. The Claimant has failed to recover in line with the expert’s prognosis and re-examination by a Consultant Orthopaedic Surgeon has now been recommended.”
  • On 29 July 2014 the Defendant was served with the order of 7 July 2014 imposing a general stay to proceedings. The stay continued whilst the Claimant obtained a range of medical evidence
  • On 28 February 2017 the Claimant notified the Defendant the claim was likely to exceed £25,000 and they were intending to ask the Court to transfer the matter to Part 7.
  • On 7 March 2017, just over 5 ½ years since the date of the accident, District Judge Newman made an order lifting the stay and transferred the case to Part 7.
  • The Defendant sought an order setting aside the order lifting the stay and sought to strike out the claim.

First instance

At first instance District Judge Sanderson allowed the Defendant's application to set aside an order lifting a general stay following the issue of protective proceedings by the Claimant in accordance with paragraph 16 of Practice Direction 8B.

Practice Direction 8B is concerned with claims where the parties have followed the relevant Protocol, however they are unable to agree damages before limitation expires.

Paragraphs 16 and 17 set out a code relating to limitation. Where compliance with the Protocol is not possible before limitation expires, a claimant can start proceedings under CPR Part 8 stating the stay is required in order to comply with the Protocol. There are obvious costs benefits to the defendant in enabling such claims to continue, as it removes the need for the claim to exit the Protocol and Part 7 proceedings to be issued.

The procedure works well in situations where both parties are committed to dealing with the claim within the Protocol to conclusion. However this case addresses the position where a claimant has secured a stay under Part 8, but subsequently does nothing to progress the claim.

The appeal

The Claimant appealed the first instance decision

  1. The issues for His Honour Judge Pearce to consider were:
  2. Whether the court has the power to direct that proceedings issued pursuant to CPR Part 8 and stayed in accordance with paragraph 16 of the Practice Direction 8B, can be continued as Part 7 proceedings.

Whether the court should lift the stay in this specific care and allow the claim to continue as a Part 7 claim.

His Honour Judge Pearce upheld the decision that it was open to the Claimant to lift the stay so that directions could be sought pursuant to Part 7.

However, it is incumbent on the Claimant to review the potential value of the claim on a regular basis and to give notice when it appears the value exceeds the upper limit. The failure to give such notice is capable of amounting to an abuse of the process, as the Defendant is deprived of a potential defence and the court is prevented from carrying out case management of the claim.

It was accepted at the time of issuing proceedings that the Claimant was entitled to do so using the provisions within Practice Direction 8B. However, as further medical evidence was obtained and a further diagnosis of fibromyalgia was made by a rheumatologist, a reasonable Claimant should have realised the claim exceeded £10,000.

The Claimant failed to apply to lift the stay for a further two years and within the application to lift the stay conceded the value of the claim was now in excess of £200,000.

The Judge agreed with the findings of the District Judge that the prejudice to the Defendant was obvious. He noted that "the state of affairs offends against every aspect of the CPR and the overriding objective".

Whilst mindful of the consequences of striking out a case which may be worth a significant amount, it was considered the Claimant's persistent failures and delay increased expense and prejudice to the Defendant. Accordingly the Claimant's appeal was dismissed.

What can we learn?

  • It was never the intention of the procedure within Practice Direction 8B to circumvent inactivity by the claimant; however the judgment is clear that not all cases of delay in applying to lift the stay will be an abuse of process. The decision will turn on a strict case by case analysis.
  • The delays in this case were significant, as the claim had been stayed without any progress since 7 July 2014. It will remain to be seen what steps the court may take when the delay is shorter. However this decision may be seen as a turning of the tide and should serve as a warning to claimant's seeking to gain a potential unfair advantage by invoking the procedure within Part 8.
  • The following key parts of the Judgment are a sensible starting point when assessing whether an application is warranted:
    • Has an update been requested from the claimant and is the response automatic?
    • Has there been any indication the claimant may be removing the claim from the process, but has thus far failed to do so?
    • Has there been a breach of the PI protocol?:
      • Have any of the claimant's experts been nominated in accordance with the Protocol and has the defendant been afforded the opportunity to object to them?

      • Pursuant to Paragraph 8.1.1 (a) of the Protocol, the claimant is obliged to send the Defendant “any medical reports obtained under this protocol on which the Claimant relies”. Has the claimant held back reports which have clearly been on file for considerable period of time?

      • Has a meaningful schedule of loss been served?

    • Is the valuation of the claim clear cut?
  • A delay by itself is unlikely to be sufficient to be considered an abuse of process, it seems there will also have to be failures to communicate, failures to disclose evidence and breaches of the PI protocol for an application to succeed on this point.