Hansom & Ors v Makin & Anor [2003] EWCA Civ 1801

[2003] EWCA Civ 1801Case No A2/2003/0810
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN’S BENCH
DIVISION (HH JUDGE PREVITÉ QC SITTING
AS A DEPUTY JUDGE OF THE HIGH COURT)
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 18 December 2003
Before
THE PRESIDENTLORD JUSTICE MANCELORD JUSTICE KEENE
Between
JONATHAN MEURIG HANSOM and OTHERSAppellantsE REX MAKIN and NORMAN WRIGHTRespondents
Mr. Nigel Cooksley QC (instructed by Messrs Uppal Taylor) for AppellantsMr Nicholas Davidson QC (instructed by Messrs Weightman Vizards) for First RespondentMr Hugh Evans (instructed by Messrs Addleshaw Booth & Co.) for Second RespondentHearing Hearing date: 4 November 2003
JUDGMENT

Introduction

[1]There are before the court appeals in four sets of proceedings commenced by four different individual claimants, Mr. Hansom, Mr Maher, Mr Parker and Mr Williams. In all sets of proceedings a firm of solicitors, E. Rex Makin ("Rex Makin"), is a defendant. In the proceedings brought by Mr Hansom, counsel, Mr Wright, is the second defendant. The proceedings are brought for alleged negligence in relation to advice given to the claimants that they could not successfully pursue their claims against Clwyd or Gwynedd County Council for child abuse while in care in North Wales in earlier years. The position in respect of the first action, against Rex Makin and counsel, differs from that in the other actions; counsel is alleged to have advised negligently in writing on 14th April 1993, leading Rex Makin to serve notice of discontinuance on 4th July 1993. Rex Makin is alleged to have been negligent in failing to heed or observe that counsel’s advice was incorrect and failing to deal with certain matters. In the case of the other three actions, Rex Makin’s advice was allegedly given at some date after the decision of the House of Lords in X v. Bedfordshire CC on 14th October 1994; and it is said that, as a result, the claimants’ legal aid certificates were discharged on 27th September 1995 and that Rex Makin served notices of discontinuance on 19th December 1995.[2]The present actions were begun on 15th March 1999 by Messrs. Nelsons, acting for the claimants. After 25th April 2000, they were all subject to the automatic stay imposed by CPR 51 on any action commenced under the old rules, which had not come before the court, at a hearing or on paper, between 26th April 1999 and 25th April 2000. An application to lift the stay was made on 9th May 2002 in Mr Hansom’s action; whether any formal applications were ever issued in the other actions (as should have been the case) is not entirely clear, but the evidence filed in relation to Mr Hansom’s action covers all four actions, as do the decisions below which have given rise to this appeal. At a hearing on 5th November 2002, Master Ungley refused to lift the stays in respect of any of the four actions, and struck out the three actions begun by Mr Hansom, Mr Maher and Mr Williams. On an appeal heard before HHJ Previté QC, sitting as a deputy judge of the High Court, on 27th March 2003, he refused to disturb the master’s decision. This appeal is now brought against that refusal by permission of Simon Brown LJ; he accepted the submission in counsel’s skeleton that it would raise an important point of principle, namely whether it was or should be incumbent on the Court to be satisfied that there was a substantial risk of the impossibility of a fair trial, before it could be proportionate to (in effect) dismiss any of the claims.

The detailed course of the actions

[3]The circumstances in which no action came to be taken within the period of one year identified in CPR 51 involve matters of some detail. Defences were served by Messrs Weightmans acting for Rex Makin on 21st May 1999, and in the first action by Messrs Addleshaw Booth & Co. acting for Mr Wright on 7th June 1999. Following a without prejudice suggestion made by Addleshaws on 14th June 1999, Addleshaws (no doubt after contacting Weightmans) confirmed on 3rd August 1999 that a stay for settlement negotiations appeared agreeable to all parties, and suggested that a consent order be lodged accordingly. On 4th August 1999, Weightmans wrote to Nelsons in relation to Mr Parker’s claim, suggesting a stay pending the outcome of proceedings which Mr Parker was pursuing against the operators of a private home run by Bryn Alyn Community (Holdings) Ltd; they requested to see the pleadings in that action. The reason for these suggestions was the potential inter-relationship between any findings or recovery in such proceedings and any claim which Mr Parker may have had and discontinued against the local authorities in whose care he had also been for some periods.[4]Nelsons agreed on 9th August 1999 to the proposal for a stay relating to Mr Hansom’s action, and wrote enclosing such an order for approval. Addleshaws on 23rd August 1999 confirmed their client’s agreement to a two or three month stay; but they now advised that Weightmans were awaiting more information and did not wish to enter into full scale negotiations at that point, but preferred to hold off signing the consent order until early September 1999. Addleshaws also asked for some information. On that basis, Nelsons by letter of 26th and Addleshaws by letter of 31st August agreed to postpone any consent order until 21st September 1999. On 1st October 1999 Addleshaws pointed out that no detailed schedule of Mr Hansom’s alleged loss had been received and informed Nelsons that Weightmans had not agreed any stay (beyond early September), but that they (Addleshaws) would chase them. On 30th September 1999 Nelsons wrote to Weightmans in connection with the action brought by Mr Parker, referring to the ongoing North Wales Tribunal of Inquiry (conducted by Sir Ronald Waterhouse). Weightmans replied on 9th November 1999, evidently referring to the lack of quantification of that claim, and also wrote with regard to Mr Hansom’s claim. On the same day, Nelsons wrote to Addleshaws suggesting a general stay of Mr Hansom’s claim, determinable 14 days after publication of the Inquiry’s Report but in any event not later than 14th February 2000. Addleshaws agreed this on 6th December 1999 and said that they had contacted Weightmans. They reminded Nelsons then and on 23rd December that they had still not received a full quantification of Mr Hansom’s alleged loss, and asked for a consent order. By letter dated 22nd December which must have crossed with Addleshaws’ letter, Nelsons said that they would supply a draft consent order and quantification of losses in early New Year.[5]Despite reminders by Addleshaws, nothing happened until 8th February 2000, when Nelsons apologised for their delay. They said that, as the Inquiry Report was now imminent, they were sure that matters could now "progress in accordance with previous discussion" (i.e. presumably by settlement discussions), and suggested that they had thought that Addleshaws would be preparing a draft order, which they asked them to do. Addleshaws responded on 11th February by supplying such an order; having had no response even to this, they wrote on 22nd February, pointing out that the Waterhouse Inquiry Report had now been published and saying:
"That being the case, we suspect that the Consent Order is now surplus to requirements? Do you agree?"
Weightmans evidently requested time to consider the Report, and on 24th February 2000 Nelsons wrote to Addleshaws mentioning this, agreeing to summarise the Report and saying: "We have also agreed to summarise our client’s matter in view of the report to them and we shall of course copy the same to you.[6]On 29th February 2000 Nelsons wrote to Addleshaws enclosing Addleshaws’ consent order in the first action which they had signed, together with identical signed consent orders (presumably also for passing on to Weightmans) in the actions brought by Mr Parker, Mr Maher and Mr Williams. Addleshaws replied on 1st March 2000 referring to a hearing on damages due to take place on 27th March 2000 in a number of other ongoing actions which involved other claimants (C v. Flintshire C.C.,subsequently tried before Scott Baker J); they suggested and enclosed a draft amended consent order providing for a stay to 14th April 2000, which they asked Nelsons to sign and forward to Weightmans for their signature before "lodgment at court". Nelsons on 2nd March would only agree a stay to 31st March, and enclosed a consent order to that effect. Addleshaws on 9th March 2000 repeated their request, saying that their clients would need until 14th April to consider the information following the assessment of damages. Nelsons on 14th March 2000 pointed out that the 27th March was the start of a 3½ week trial. They agreed the requested extension to 14th April, but advised that "our clients would not be prepared to agree any such further extensions at this stage". Addleshaws on 16th March then wrote saying that the stay had originally been agreed because the claimants had been unable to quantify their clients’ losses, and that the claimants should in the circumstances do so now by return. The first statement seems to have been an over-simplification. While Addleshaws were asking for detailed information about loss, stays were also proposed from time to time with a view to awaiting and considering the outcome of the proceedings ultimately tried before Scott Baker J and, in the case of Mr Parker, Connell J. Addleshaws followed their letter of 16th March with a reminder on 31st March 2000. Nelsons on 5th April 2000 provided an unparticularised list of heads of legal and other costs incurred in the proceedings discontinued against the local authorities, and said that they were in the hands of the local authorities and were "attempting to rectify matters", but that "No doubt …. you will appreciate that full consideration of the Waterhouse Report and also, inevitably, the judgement in the main civil proceedings (currently being conducted before [Scott Baker J] will lead to a better determinate [sic] of the value of these claims for the purpose of settlement."[7]Addleshaws replied on 12th April that their client could not "even begin to consider settlement proposals until firm figures are provided"; they again asked "for full quantification, at which point we will consider the position further". Nelsons on 5th June indicated that Flintshire C.C. had said that they would quantify their costs in the discontinued and other proceedings by the end of June, whereupon Nelsons hoped "to be able to engage in constructive talks". Addleshaws pointed out on 8th June that the claim was now automatically stayed under Part 51 of the transitional provisions of CPR. Nelsons on 12th June noted this, and said "We assume that this matter can be dealt with in the usual way by consent at the relevant time". Addleshaws’ response on 15th June pointed out (correctly) that, given the stay was imposed by the CPR, they suspected that any lifting of the stay would need to be approved by the Court; since they had still not received full quantification, they suggested that the stay remained until such quantification, which they trusted would take place by the end of June. Despite an expression of hope by Nelsons on 20th June, Addleshaws had to write again on 21st July pointing that that nothing had happened. Nelsons on 21st July replied that they had still not heard from the local authorities with their costs, but anticipated Scott Baker J’s judgment by the end of July and that they would be able to quantify all their client’s losses within four weeks thereafter. On 2nd August Nelsons wrote enclosing the judgment delivered by Scott Baker (in favour of the claimants before him) on 26th July 2000. They said of this that there were "no real generic elements, however, it is instructive together with previous judgments to [sic] the issue of quantum" and that they had once again chased the local authorities’ solicitors regarding their costs. Addleshaws on 9th August 2000 looked forward to hearing with further quantification. Thereafter there was no correspondence with Addleshaws until 8th May 2002, when new solicitors acting for the claimant, Uppal Taylor, wrote asked for an immediate response to a request to lift the automatic stay.[8]An appeal by the defendants in the action which had been tried by Scott Baker J was dismissed on 12th February 2001. Proceedings brought by a number of claimants (though not, it seems, those issued by Mr Parker) against Bryn Alyn Community (Holdings) Ltd. were decided by Connell J on 26th June 2001. During 2001, and despite the stay of the present actions, certain not insignificant activity and communications took place in relation to Weightmans. Nelsons wrote on behalf of Mr Parker on 20th April 2001 requesting consent to an interim payment of £2,500 under CPR 25. Weightmans refused, and by fax dated 23rd July 2001 served a witness statement responding to the request; this challenged the claimant’s "application" on grounds which (inter alia) referred to Mr Parker’s alleged lack of prospects and problems of causation, as well as the failure to quantify his claim, despite a request in October 2000 that he should complete mandates authorising disclosure of medical, army and institutional records. The statement also said that:
"g) Given the difficulties on causation the Defendant proposes to obtain its own medical evidence. Dr Carnwath, Consultant Psychiatrist, is due to examine the Claimant on 9 August 2001. Pending receipt of this evidence the Application is premature. …. 4. Whilst it is admitted that the Claimant’s solicitors issued proceedings in 1999, the Defendant is not at fault for the delay which has occurred. Indeed, the claim is presently stayed pursuant to Part 51 of the CPR as the Claimant’s solicitors failed to ensure that this matter came before a Judge at a hearing or on paper between 26 April 1999 and 25 April 2000. We have not taken any issue on this as we accept it was appropriate for the Claimant to await the outcome of the group action of Coxon & Others v Flintshire County Council listed before His Honour Mr Justice Scott Baker last summer. The Claimant has not sought to prosecute the action with any more urgency since judgment was handed down. On the contrary, he has failed to deal with our correspondence including letters dated 2 October 2000, 6 November 2000, 29 November and 13 July 2001."
[9]All four claimants were then examined by a consultant psychiatrist at Weightmans’ request: Mr Parker on 9th August 2001, Mr Maher on 16th August 2001, Mr Williams on 23rd August 2001 and Mr Hansom on 13th September 2001. It was accepted before us that Addleshaws (who it is clear worked closely with Weightmans on various aspects of these claims) were aware of this examination at the time – and they were very probably kept informed of the reports, which have not however been disclosed to the claimants.[10]On 24th July 2001 and (it seems) 30th November as well as 20th December 2001, Nelsons wrote disclosing some documents and listing others. On 24th January 2002, Weightmans replied, again drawing attention to the stay, but saying that "notwithstanding this" they welcomed sight of the documents. In response to a letter from Nelsons dated 22nd March 2002, Weightmans wrote on 2nd April, refusing to consent to the lifting of the stay or to indicate what their clients’ attitude would be to a formal application for its lifting. An application to lift the stay in Mr Hansom’s case was then issued on 9th May 2002. Similar applications were thereafter pursued on behalf of the other claimants.

The legal principles

[11]The legal framework within which the applications fell to be pursued has been considered in a number of authorities in this court. It has been held that the failure to bring an action before the court, at a hearing or on paper, between 26th April 1999 and 25th April 2000 constitutes a failure to comply with a rule, and that the automatic stay imposed in consequence constitutes a "sanction", in each case within the meaning of CPR 3.9 (cf Audergon v. La Baguette Ltd. [2002] EWCA Civ 10 and Woodhouse v. Consignia plc [2002] EWCA Civ 275; 1 WLR 2558, paragraphs 29-30), with the result that, on an application by a claimant to lift such a stay, the court is required under CPR 3.9 to consider all the circumstances, including those specified in that rule. In Woodhouse v. Consignia plc, Brooke LJ, after referring to previous judgments which he had given in this court, said at paragraph 41 that:
"Judges …. should submit themselves to the discipline of considering each of the matters listed in CPR r. 3.9 which appear to them to be relevant to the case they have to decide. If they fail to do so, there may be a serious danger that an appeal court may overturn their decision for omitting to take a material consideration into account."
[12]The principles stated in these authorities do not mean that CPR 3.9 was specifically crafted with applications to lift an automatic stay arising under CPR 51 in mind. Both the imposition of an automatic stay under CPR 51, and the need for an application to lift it, are transitional phenomena. The core subject-matter of CPR 3.9 is the more conventional failures to comply with rules, directions or court orders which will doubtless continue to occur in litigation long after the automatic stays imposed under CPR 51 have ceased to interest anyone other than procedural historians. The focus in CPR 3.9(c), (d), (f) and (g) on the claimant’s failure to comply and its impact is understandable in this light. In the context of an automatic stay imposed under CPR 51, the application of these sub-rules needs some care. The reality is that it is the effect of the sanction, as much as if not more than that of the "failure", that is likely to be of interest. The underlying situation after an automatic stay may be more akin to that which used to exist under the former rules where a plaintiff failed to prosecute his, her or its claim with due expedition. The length of the delay in applying to lift the stay and the effect of such delay become of primary interest. In this context, the focus is likely to shift towards sub-rule (b), whether the application for relief has been made promptly, and sub-rule (i), the effect which the granting of relief would have on each party; I return later to the possibility that sub-rule (g), whether the trial date or the likely trial date will be met if relief is granted, may also be relevant. How far, under these sub-rules or under the general requirement to "consider all the circumstances", the court should, when deciding whether to lift an automatic stay, attach importance to the possibility that there could still be a fair trial, is at the heart of the point of importance which led Simon Brown LJ to grant permission to appeal.

Application of CPR 3.9

[13]In the light of Woodhouse, both the Master and the judge considered each of the matters specified in CPR 3.9. However, they analysed the relevance of these somewhat differently. As to sub-rule (a), the interests of the administration of justice, the Master related these to the court’s duty under the CPR to ensure that cases are "dealt with expeditiously and fairly", and invoked as relevant in this connection the long period elapsed since the alleged negligent advice (which he put as occurring in all actions in 1995). The judge pointed out that this was a duty on the court. CPR 1.2 provides that it is a duty to which the court must give effect when it exercises any power given by the Rules or interprets any rule, whereas CPR 1.3 requires the parties "to help the court to further the overriding objective"; the duty is therefore one that arises under the CPR when a matter comes before the court, which the present actions never did until 2002. The judge had in mind that in Woodhouse this court had not regarded delay which had occurred in pursuing Mr Woodhouse’s action (between its commencement in 1998 and the imposition of the automatic stay in April 2000) as relevant under sub-rule (a), and had treated the interests of administration of justice as a neutral factor. He indicated, rightly in my view, that the master should not have identified the claimants’ past delay as relevant under sub-rule (a), but that the court had to have regard to the consequences of any order (e.g. under sub-rule (i)), in deciding what order to make.[14]As to sub-rule (b), whether the applications for relief were made promptly, both the master and the judge held, rightly in my view, that they were not. The master pointed both to the delay since the automatic stay and to the delay after the judgments given by Scott Baker J on 26th July 2000 and Connell J on 26th June 2001. The reference to these judgments recognises that both defendants were until August 2000 interested in seeing Scott Baker J’s judgment, with a view to holding discussions thereafter. What the master might have mentioned is that the defendants must, presumably, also have been interested to see the outcome of the appeal, which was only decided on 12th February 2001. Connell J’s judgment was only of potential relevance in Mr Parker’s action, and the master might have mentioned that an appeal was still outstanding in 2002. That appeal was in the event only decided on 10th June 2003: see KR v. Bryn Alyn Community (Holdings) Ltd. [2003] EWCA Civ. 85; [2003] QB 1441. In addition, I consider that both the master and the judge could have identified, in relation to sub-rule (b) or as a relevant general consideration, the not insignificant steps that took place during 2001, as summarised in paragraphs 8-10 above. Although the claimants were not pursuing their actions with proper despatch, it is clear that neither they nor the defendants can have been viewing them as at an end.[15]As to sub-rule (c), whether the failure to comply was intentional, the master thought that it was, because he regarded the failure to apply to lift the stay as intentional. The judge pointed out, correctly, that sub-rule (c) looks to the failure to bring the action before a court in the period between 26th April 1999 and 25th April 2000, rather than the failure thereafter to apply to lift the resulting stay. He referred to the intention to lodge an agreed order for a stay, which would have avoided any automatic stay, and held that the claimants’ conduct could not be regarded as intentional within sub-rule (c).[16]As to sub-rule (d), whether there was a good explanation for the failure, the master again referred to the delay in applying to lift the stay in holding that there was no such explanation; and the judge likewise. But the logic of the wording, and of the judge’s own reasoning in relation to sub-rule (c), suggests that both the master and the judge ought to have been considering whether there was a good explanation for the failure to bring the actions before the court in the period between 26th April 1999 and 25th April 2000. If one looks at the protracted and somewhat confused course of communications over that period, it is not easy to identify any "good" explanation for that failure. The claimants’ advisers did not focus on the need to take any step, and did not show any real grasp or despatch in relation to the finalising and lodging of any consent order for a stay. On the other hand, there was a considerable identity of purpose between all the solicitors over this period, namely that the actions should tread water pending the resolution of other proceedings (even though Addleshaws were also seeking further information on loss before there could be meaningful discussions), and latterly that consent orders should be made. Weightman’s statement of 20th July 2001 quoted in paragraph 8 above speaks powerfully in that respect; this aspect is one which (although mentioned in the judgments below) merited in my view greater emphasis than the master and judge gave it when considering how the automatic stays came about. In particular, the failure to bring the actions before the court in the year ending on 25th April 2000 could not and would not in my view have been of any significance, had it not been for the long delays after the imposition of the automatic stays.[17]I turn to sub-rule (e), the extent to which the claimants have complied with any other rules, practice directions, court orders or relevant pre-action protocols, The master pointed out that the pre-action protocols never applied to these actions, and that the claimants were not in breach of any rule. The judge agreed that sub-rule (e) did not as such apply, but noted the failures to serve medical reports (apparently still continuing in at least the Hansom action, although there has been the medical examination of all the claimants in summer 2001) and the continuing failures to provide particulars of loss. The master, he said, rightly took the latter into account at a different point in the exercise under CPR 3.9. I agree with the master and judge both on their approach to sub-rule (e) and as to the more general relevance of the claimants’ failures to provide particulars of loss. On the other hand, no particular prejudice is suggested to have arisen from this, and the actions cannot have been being viewed on any side as at an end: see paragraphs 8-10 and 14 above.[18]As to sub-rule (f), whether the failure to comply was caused by the party or his legal representative, the master and judge both treated this as referring to the failure to apply promptly to lift the stay, which they attributed to the claimants’ legal representatives, adding however that this was "perhaps not really of very great assistance [i.e. to the claimants] in determining whether the stay should be lifted where the length of delay is so great". As I have pointed out, the failure here is the conduct allowing an automatic stay to come into existence. That seems clearly to have been the claimants’ solicitors’ responsibility. Delay in applying for a stay is not relevant under sub-rule (f), but has already been considered under sub-rule (b).[19]Sub-rule (g) involves considering whether the trial date or the likely trial date can be met if relief is granted. The master (while observing, pertinently in my view, that some of the wording of CPR 3.9 "sits uneasily with the application to lift [an] automatic stay") took this as requiring consideration when trials would have been likely to take place, if the actions had been brought before the court during the period ending 25th April 2000, so that no automatic stay was ever imposed. The judge pointed out that in Woodhouse this court at paragraph 34 regarded sub-rule (g) as irrelevant, because "a trial date and/or likely trial date has not been fixed …". He concluded that "the master should not have speculated about the likely date of trial where no date has in fact been fixed". In the light of Woodhouse, the judge seems to me to have been right under sub-rule (g). But the overall effect, on the date when there could and would be a trial, of the "failure" (permitting an automatic stay) and of any delay in applying for relief are relevant considerations - possibly under sub-rule (i) and certainly as one of the overall circumstances required to be considered under CPR 3.9.[20]Next there is sub-rule (h), the effect which the failure to comply had on each party. The master and judge again both related this to the effect of the overall delay arising from the failure to prosecute the action with due despatch from the time when the stay was imposed. Sub-rule (h) appears to me to deal in terms only with the effect of a failure to bring the actions before the court in the year ending 25th April 2000. The effect of a failure to apply promptly to lift the resulting automatic stay and of the grant of relief by lifting such a stay after a delay are on this basis matters arising under sub-rules (b) and (i) or as general circumstances outside any specific sub-rule. I note that this may not have been the way that the court saw it in Woodhouse, where at paragraph 48(h) Brooke LJ considered the effect of the overall delay on memory. It is necessary, on any view, to avoid double-counting for or against either party when going through the sub-rules. Indeed, at the end of the day, the right approach is to stand back and assess the significance and weight of all relevant circumstances overall, rather than to engage in some form of "head-counting" of circumstances.[21]Having said that, it is important to note what the master said about difficulties of recollection. He said:
"In a case such as this it seems likely that recollection will be dimmed. The Defendants can, of course, as in the Woodhouse case, rely upon the damage to their recollections because they should be given the benefit of the doubt." "
Notwithstanding the defendants would be entitled to the benefit of the doubt, they would be prejudiced by the delay insofar as liability depended in any way on recollection…… Mr Owen [for the claimants] submitted that liability was not a live issue and, in any event, because the advice given by the second defendant was in writing and the first defendant’s action in obtaining the discharge of the claimant’s legal aid certificate was also in writing, there would be no problem about recollection. Mr Evans [for counsel] submitted it would be necessary for Mr Wright to explain why he had so advised and the passage of time would inevitably make this more difficult. The master rightly took this aspect into account."[22]Lastly, there is sub-rule (i), the effect which the granting of relief which have on each party. The master pointed out that the lifting of the stay would enable the claimants to pursue their actions, and that these would reach trial sooner than any which they brought against their solicitors, if the stay was not lifted. The Master then went back to the overriding objective, concluded that on balance the check list in the main favoured the defendants, and then went on to refer to the "substantial prejudice" to "professional defendants in facing allegations in relation to their conduct some eight, nine years ago". The claimants on the other hand might, he thought, be prejudiced to an even greater extent if the stay was not lifted. For that reason, he found it "very difficult to decide which way I should ultimately consider the effect of the overriding objective". His reason for deciding in the defendants’ favour was:
"I take the view that ultimately the one deciding factor after balancing everything else is the duty cast on the court of ensuring that cases are dealt with expeditiously and fairly. Expedition is not a word which could in any way be applied to this litigation and I do not think that it is fair to require these Defendants to face still further delay in the prosecution of these serious claims against them."
[23]The judge repeated his observation that the overriding objective to manage cases expeditiously and fairly related to the court’s duty, not to a consideration whether the parties had acted with expedition; but he pointed out that CPR 3.9 requires the court to deal with the applications justly in the light of all the circumstances, and he identified as "the decisive factor" in the Master’s decision the prejudice suffered and yet to be suffered by the defendants, in having the claims hanging over them. He rejected a submission that the Master had failed to consider all relevant circumstances, although the Master had not mentioned the medical examinations of the claimants in Summer 2001. He rejected a submission that the Master had applied too low a test and that he ought in the light of another decision of this court (Taylor v. Anderson [2002] EWCA Civ 1680; [2003] RTR 21, at p.305) to have asked: "Can an unequivocal affirmative answer be given to the question, is there a substantial risk that a fair trial is impossible?" "require the court to refuse to give relief only where it can be shown that the stringent test on a striking out application is satisfied".[24]The appeals therefore failed, with the judge upholding the Master’s exercise of discretion. Counsel acknowledges before us that the judge (despite differing on some points from the Master) did not himself at any point re-exercise the discretion. The appeal is put before us on the basis, firstly, that the Master and judge erred in failing to treat the case as or analogously to an application to strike the actions out, in which connection reference is made to Taylor v. Anderson, and, secondly, that the judge erred in failing in any event to re-exercise the discretion having regard to the differing analysis which he adopted to the Master on several points.

The relevance of whether a fair trial remains possible

[25]Taylor v. Anderson was decided eight months after Woodhouse, to which it makes no reference. Counsel, Mr Evans, told us that he had been informed, on enquiry, that no-one referred Woodhouse to the court in Taylor v. Anderson. The automatic stay in Taylor v. Anderson was followed by an application some 21 months later by the defendants to strike out the action under CPR 3.4(2). The district judge struck the action out. The claimants appealed. Only in their appellants’ notice did they belatedly apply to lift the stay (paragraph 9). Chadwick LJ said at paragraph 11 that:
"It is accepted on behalf of the defendants, however, in this court (and, if I may say so, properly accepted) that, on the present state of the authorities, including authorities in this court, these proceedings ought not to be struck out unless an unequivocal answer can be given to the question: is there a substantial risk that a fair trial is impossible? ….. What is required is not "considerable doubt" or recognition that "it was unlikely"; but a substantial risk of the impossibility of a fair trial. It is that risk which the other parties should not be required to accept; in circumstances where the risk has been created by the conduct or inactivity of the claimant."
[26]It is in my view impossible to derive from Taylor v. Anderson the general principle for which the claimants contend. Taylor v. Anderson was an unusual case. The primary application before the courts was the defendants’ application to strike out. No separate attention was given to the application to lift the stay, which was only introduced on the appeal. The court was not referred to Woodhouse, and counsel conceded the test which Chadwick LJ accepted and applied. The fact that the claimant was a patient represented by a litigation friend may perhaps also have had relevance.[27]No doubt there will be many cases where the possibility or otherwise of a fair trial is highly important to the exercise of discretion under CPR 3.9. In Audergon the claimant’s "substantial delays …. [had] placed such a difficulty in the way of a fair trial of the issues" that justice required that the stay should not be lifted (paragraphs 111 and 113). But it does not follow that, where a fair trial is still possible, relief will necessarily be granted. CPR 3.9 deals generally with relief from sanctions imposed for failure to comply with a rule, practice direction or court order. It could not be the case that, whenever such a sanction had been imposed, and however flagrant or persistent the failure, the defaulting party could have it set aside by showing that a fair trial was still possible. The present appeal does not, however, involve flagrant or persistent misconduct, but, rather, all too familiar inefficiency and lack of diligence, and in such a case it is likely to be very material that a fair trial is still possible. But this cannot necessarily be decisive. All the circumstances must be considered. Prejudice to professional defendants is among them; and it may exist, even though it is does not involve prejudice to the fairness of the trial process. In the present case, prejudice in the form of the detriment involved in having litigation hanging over professional defendants’ heads was a decisive factor identified by the Master and judge.

The exercise of discretion

[28]I turn therefore to the claimants’ second submission, namely that the Master’s exercise of discretion was flawed, that the judge was wrong simply to uphold it and that we should re-exercise the discretion ourselves. The Master was in my view wrong in relating the overriding objective to the claimants’ delays, in treating the "failure" (to bring the actions before the court in the year ending 25th April 2000) as an "intentional" failure in any relevant sense, and in treating sub-rule (g) as relevant. Both the Master and the judge might have taken expressly into account that there was conduct during 2001 indicating that none of the parties can have been viewing these actions as at an end. On a numerical basis, these points would seem capable of affecting the Master’s statement that on balance the check-list that he had gone through favoured the defendants. But, as I have said, a balancing of circumstances numerically is not the right approach. The Master’s judgment satisfies me that he was in reality persuaded by two factors, the first the expedition which he thought was required by the overriding objective, and the second his conclusions regarding the balance of factors relating to prejudice.[29]As to the first factor, the Master’s reasoning is (as I have said) open to the criticism that the overriding objective is a duty on the court in litigation to which the CPR applies, whereas the present applications relate to the conduct by claimants of actions made subject to automatic stays because they were not brought before the court, in such a way and at such a time as to make CPR apply. Against that it was under the old rules incumbent on the claimants to pursue these actions, regarding ancient matters, with considerably greater despatch, even though no-one was viewing the actions as at an end during 2001. As to the second factor, the prejudice found was not evidential and was not to the possibility of a fair trial process. The judge was wrong to interpret the Master as finding evidential prejudice to the defendants. The decisive prejudice in the Master’s view consisted in the proceedings hanging over the defendants’ heads.[30]Neither of the defendants suggested in evidence any reason why the delays which have occurred made a fair trial impossible, and neither the Master nor the judge relied on any risk to a fair trial. It is also right that they did not identify the fact that a fair trial was still possible as a positive reason to lift the stay. But, since no-one was suggesting that it was not, I do not find this by itself a point of real force in the claimants’ favour.[31]As to evidential prejudice, Mr Evans accepted before us that neither of the defendants claimed, in the evidence filed to resist the applications to lift the stays, that the delays caused by the claimants had led to any material diminution of recollection on their part. The evidence filed by Weightmans on behalf of Rex Makin said no more than that: "The Defendant is arguably prejudiced by the delay as it makes the Claimant’s evidence as to the events that occurred whilst resident at the Children’s homes to be less reliable".[32]That leaves prejudice by the proceedings hanging over the defendants’ heads. Weightmans said (in paragraph 56(vii) of Mr Jolly’s statement dated 2nd September 2002) that:
"It is unfair for the threat of these claims to have been hanging over the Defendant for such a length of time, not least because it has an impact on their professional negligence premiums."

In paragraph 59(i) Mr Jolly repeated the point in similar terms:

"As indicated above, the Defendant has had these claims hanging over them for a considerable length of time. It has had an effect on their professional indemnity premiums. If the stay is lifted then the claims will no doubt progress to a trial in the summer of 2003. This will mean that the claims are hanging over the Defendant for another 12 months or so."
[33]On behalf of Mr Wright, Mr Preece of Addleshaws said on 23rd September 2003 in relation to the effect of the failure to comply:
"Put simply, Mr Wright has now had this hanging over him for some considerable time. It is a very serious matter to accuse a senior barrister of negligence, and one of utmost professional embarrassment. Liability is firmly denied. Any such claim, bearing in mind it is against an Officer of the Court, must surely be advanced with utmost expedition. This claim has not been done so [sic]."
[34]In my view, the prejudice suggested by Rex Makin through Weightmans did not justify the weight placed on it by the Master and the judge. The prejudice suggested by Mr Wright through Addleshaws is somewhat more substantial, though it is diminished in the particular circumstances of this case by the relative shortness of the period for which any claim had been outstanding against him. It is also an unavoidable fact that if the claim against Rex Makin is allowed to proceed, but the claim against Mr Wright is not, Mr Wright is at risk of being brought back in through a contribution claim. I do not, however, think that this consideration, relating to Mr Wrights’ position, constitutes a sufficient reason for refusing to lift the stay against Rex Makin, if otherwise it should be lifted to enable the claimants to pursue them.[35]One very relevant circumstance which both the Master and the judge overlooked is that, if the claims are not allowed to proceed, the effect will be to remit the claimants to proceedings against those acting as their solicitors in the period between early 2000 and early 2002 for failing diligently to pursue proceedings against those who acted as their solicitors in the years 1993 (in the case of the Hansom action) or 1994-95 (in the case of the other actions). The measure of recovery in any successful claim against solicitors for allowing litigation to be (effectively) struck out does not derive from an exact determination of the likely outcome on the balance of probabilities, but from a percentage assessment of prospects. So the claimants, if generally successful, would still have been unlikely to recover in the present actions more than a percentage of their maximum claims as against the relevant local authorities; and, if they were now to be remitted to a claim against their solicitors in the years 2000-02, they would be likely to suffer a further discount, by reference to their prospects of succeeding against Rex Makin and Mr Wright in relation to the events of 1993-95. Leaving on one side the thought that it is a sad enough comment on the English legal system that there should be litigation against solicitors for failing to pursue litigation against local authorities and that it is even more discordant to contemplate litigation against solicitors for failing to pursue solicitors for failing to pursue local authorities, the potential double discounting involved in the last scenario seems to me to constitute real detriment which should have been put in the balance against such prejudice as the defendants were asserting, effectively as a result of the delays occurring during a period of at most two years. The Master, when he came to compare the position if relief was given with the position if it was not, referred to a delayed trial, in terms which postulated that a trial against the solicitors acting in 2000-02 would represent a simple and effective substitute for a trial against the solicitors acting in 1993-95. But the potential double-discounting means that that is not so.

Conclusion

[36]Looking at the matter overall, I have come to the conclusion that the Master’s exercise of discretion was flawed for three main reasons:(a) the emphasis he laid on the expedition required by the overriding objective, even though this is to some extent counter-balanced by the consideration that it was, quite apart from CPR, incumbent on the claimants to prosecute these actions with due despatch which they did not do;(b) the significance he attached to what was, in the case of Rex Makin, insufficient evidence of prejudice and, in the case of counsel, limited prejudice as a result of the litigation "hanging over" the defendants during the period of under two years over which delays occurred as a result of and after the automatic stay; and(c) his failure to take into account the element of double-discounting, if relief were not granted. Exercising the discretion afresh, as is necessary in these circumstances, I would regard these as factors which, together with the other circumstances analysed as I have done already, tipped the balance in favour of lifting the stays. I would allow these appeals and lift the automatic stays accordingly. But I would only do so on stringent terms as to the further pursuit of these actions, so that there is no room for further delay. I would also hear counsel on the question whether the stays should be lifted on any terms as to costs.[37]I agree.[38]I also agree.

Cited in 11 later judgments

and 2 more of the most senior