Bethell Construction Ltd & Anor v Deloitte & Touche [2010] EWHC 3664 (Ch)

[2010] EWHC 3664 (Ch)Case No 7MA30083
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue MANCHESTER DISTRICT REGISTRY, Manchester Civil Justice Centre
1 Bridge Street West
Venue ManchesterDate Thursday, 16 th December 2010
Before
HIS HONOUR JUDGE HODGE QCsitting as a Judge of the High Court
Between
BETHELL CONSTRUCTION LIMITED AND ANOTHERClaimantsDELOITTE & TOUCHEDefendant
MR. JOHN DAGNALL (instructed by HEATONS LLP) for ClaimantsMR. THOMAS PLEWMAN (instructed by REYNOLDS PORTER CHAMBERLAIN LLP) for DefendantHearing Hearing dates: Thursday 16 th December 2010
JUDGMENT
[1]This is my extemporary judgment in the case of Bethell Construction Limited and another as claimants and Deloitte & Touche as defendants (Claim Number 7MA30083). The claim form in this matter was issued as long ago as 22nd February 2007. By it, the claimants seek damages for professional negligence against Deloitte & Touche, the well known firm of accountants and auditors, relating to the accounts for companies within the group of which the claimants are members for the accounting years ended 30th September 2000 and 2001.[2]The claim form was provided to the solicitors acting for the defendants – Reynolds Porter Chamberlain – but expressly not by way of service. The parties agreed an extension of time for service of the claim form and particulars of claim. There was an application for what was effectively standard disclosure by reference to what were then draft particulars of claim, which came before me as long ago as 3rd June 2008 when I made an order for mutual standard disclosure and directed that the costs should be in the case. The evidence in support of that application, which was by the claimants, was contained in the witness statement of Miss Julie Ann Wynter Dormer dated 12th May 2008. She was a solicitor with the claimants’ then solicitors, Halliwells LLP. My understanding, from paragraph 11 of her witness statement, was that the claim form had then actually been served, and that the parties had agreed an extension of the time by which the particulars of claim were to be served. That understanding was reinforced by the final paragraph of her witness statement, paragraph 29, in which Miss Wynter concluded by asking the court to give directions with regards to statements of case, including any extension of time for particulars of claim or for amendment. In fact, the claim form had not then been served.[3]In July 2010 the claimants decided to recommence the litigation process. That decision coincided with the unfortunate entry into administration of the claimants’ solicitors, Halliwells LLP, and the transfer of instructions, but not at that stage the files, to the claimants’ present solicitors, Heatons LLP. Although the same fee earner, Mr Ian Austin, was dealing with the matter both at Halliwells originally and later at Heatons, the actual notice of change of solicitors from Halliwells to Heatons was in fact given on 16th July 2010. In October 2010 the new solicitors for the claimants, Heatons, served particulars of claim, which made no reference to any claim in respect of the 2000 audit year, and confined the claim to the 2001 audit. Although particulars of claim were served, no claim form was served. The defendants, through Reynolds Porter Chamberlain, took the point that it was, in the light of the correspondence, too late for the claimants to serve the claim form. These applications principally concern the consequences of what is said by the defendants to be the failure to serve the claim form either before, or with, the particulars of claim.[4]There are in fact two applications before the court. The first is the claimants’ application dated 17th November and issued on the following day. That seeks, effectively, an order that the claim form should be treated as validly served or, alternatively, that service should be dispensed with. There is a cross-application by the defendants, dated 6th December 2010, seeking a declaration that the court no longer has any jurisdiction to hear the claim because the claim form was not served in time.[5]The evidence in support of the application originally comprised two witness statements from the relevant fee earner, Mr Ian Dafydd Austin, a solicitor and member of Heatons LLP, dated 19th November 2010 together with exhibits IDA1 through to IDA3, and his second witness statement of 1st December 2010 together with exhibits IDA4 through to IDA6. The evidence in answer comprised the witness statement of Miss Jane Elizabeth Howard dated 6th December 2010 together with exhibits JEH1 and JEH2. She is a solicitor and a member of Reynolds Porter Chamberlain LLP. In reply to Miss Howard’s witness statement, Mr Austin made a third witness statement dated 10th December 2010. In the immediate run up to this hearing, Miss Howard made a second witness statement dated 14th December 2010, to which Mr Austin responded by way of his fourth witness statement the following day. In the event, nothing turns on the contents of those two most recent witness statements.[6]I have had the benefit of detailed written skeleton arguments from Mr John Dagnall of Counsel, who appears for the claimants and applicants, and from Mr Thomas Plewman of Counsel, who appears for the defendants and respondents. Mr Dagnall in fact produced two written skeletons. One was for the hearing when it was originally listed for Wednesday, 8th December 2010. It was that skeleton argument that I had pre-read. He then produced a longer skeleton argument, incorporating the contents of his earlier skeleton with amendments, for the purposes of today’s hearing. I have referred to that throughout the course of Mr Dagnall’s oral submissions. In addition, Mr Dagnall filed, I think yesterday, a supplemental skeleton argument, directed to the new evidence and correcting certain minor typographical errors in his principal skeleton; but in the event nothing turns on the contents of that supplemental skeleton.[7]Mr Dagnall addressed me this morning for about two-and-a-quarter hours, and then again this afternoon on an issue relating to costs. In the event, having pre-read Mr Plewman’s detailed written skeleton argument, extending to some 61 paragraphs and 28 pages, I found it unnecessary to call on Mr Plewman, except on the issue of costs. That is because I have formed a clear view as to the merits of the claimants’ application, and the corresponding, and mirror, cross-application by the defendants. I should say that both counsel have argued the case extremely well on paper and, in Mr Dagnall’s case, orally. Mr Plewman has been equally lucid and eloquent in his brief oral submissions on the issue of costs. Since I had formed a clear view, it seemed to me that it would only be productive of a waste of court time to call on Mr Plewman to elaborate upon his written submissions; and also, given the current inclement state of the weather, the time of day, and the fact that both counsel and the defendants’ solicitors have to return this afternoon to London, it seems to me the appropriate course is to give this extemporary judgment now.[8]I have briefly to set out the background to this application. In summary, the claimants say that the claim form was originally provided to the defendants’ solicitors not by way of service, and it has been held by them ever since. That limitation, they say, was impliedly lifted when the particulars of claim were served under cover of Heatons’ letter of 14th October 2010, and the claim form should be treated as having then been served. The claimants say that the defendants have impliedly accepted that, and are estopped from denying it. If that is wrong, then it is said that the defendants have not, in particular by their letter of 22nd October 2010 and references in it to determining a stay, determined the agreed extension of time for service of the claim form and particulars of claim, and that the claim form has been thereafter served within time. If that is wrong, then the claimants’ next argument is that the court should, under CPR 6.15, retrospectively authorise service by the claimants’ original delivery of the claim form and subsequent letter of 14th October 2010 as there is good reason to do so. If the court is against the claimants on that, then the court should find exceptional circumstances justifying it in dispensing with service of the claim form pursuant to CPR 6.16.[9]The defendants’ position is that service is out of time, and that the claim should be struck out and the costs of the claim awarded to the defendants. What the defendants say is that the irresistible inference from the evidence of Mr Austin is that he simply made a mistake and failed to appreciate the need to serve the claim form as well as the particulars of claim. They say that that is one thing, among many alternative constructions of the facts, which the claimants have failed to acknowledge. Instead, the defendants complain that the claimants blame the defendants for the problem, accusing them effectively of entrapment, and are seeking to escape the consequences of the non-service of the claim form by reference to concepts of implied service and estoppel. Alternatively, the claimants seek to invoke the court’s assistance under rules 6.15 or 6.16 of the Civil Procedure Rules. In substance, the defendants say that these applications raise the issue whether the claimants – or more properly Mr Austin and Heatons – can and should be relieved of the consequences of their mistake. They say that the principles of limitation of actions have never been, and are not, subject to discretionary relaxation; and the defendants contend that they clearly mean that this claim is at an end, and the normal costs consequences of that should, the defendants say, follow.[10]The claim for alleged professional negligence against the defendants, in their capacity as auditors and financial accounting advisers, in respect of the audit year ending in 2001 is said to run into some millions of pounds. The limitation period, it is common ground, had expired by the latest in 2008, but more probably at some time in 2007. It is common ground that the claim form that was issued in the matter was within time; but the effect of its issue means that there is no prospect of any extension of the limitation period by invoking the provisions introduced into the Limitation Act 1980 by the Latent Damage Act.[11]It is appropriate at this point for me to relate the history of these proceedings. That will involve reference to a number of documents. The claim form was, as I say, issued on 22nd February 2007. It had been preceded by pre-action correspondence, including a letter of 17th May 2005 from Halliwells to Deloitte & Touche in which they had requested, at page 8, pre-action disclosure of various documents for the accounting years ended 30th September 2000 and 2001. On 9th March 2007, Halliwells wrote, enclosing either an original or a copy – it is common ground that for present purposes it matters not – of the claim form that had been issued on 22nd February. The letter was a long one. In the first paragraph it was said that in view of the lapse of time the claimants had had to issue a protective claim form (which they described as ‘the 2007 claim’), a copy of which, in its present form, they enclosed, but expressly “not by way of service”. The letter continued that in principle they would wish to have a proper pre-action protocol process, and therefore suggested an agreement with regards to extending time for service of the claim form and/or particulars of claim. However, the claimants were said to reserve the right to proceed with the litigation in the ordinary course pending any sufficient agreement. The letter concluded, at page 13, by stating that in the absence of an agreed extension, Halliwells proposed to serve the claim form, but would seek to agree a further standstill, subject to the need to comply with CPR time limits.[12]Reynolds Porter Chamberlain (RPC), the defendants’ solicitors, responded on 16th March 2007. They said that a three-month period would be a reasonable time to be allowed for them to respond to the letter of claim of 9th March in a meaningful manner. If that could be agreed, they said that their clients had no objection to granting a general extension of time for service of the claim form and the particulars of claim, terminable upon 14 days’ written notice being given by one party to the other. On 19th March Halliwells wrote back suggesting an extension of the time for service of the claim form and particulars of claim to 19th July 2007, i.e. four months, or 14 days after written notice was given by one party to the other, such notice to be given after 19th July 2007, whichever was the later. RPC were asked to confirm in writing that they agreed. The writer does not appear to have appreciated that if there was to be an extension of time to 19th July, or 14 days after written notice was given, such notice only to be given after 19th July, effectively the extension to 19th July was meaningless, and the extension would be to 14 days after the date on which written notice was given, such notice being given only after 19th July 2007. Be that as it may, on 20th March, in a letter received by Halliwells the following day, RPC confirmed that they were agreeable to Halliwells’ proposals regarding the extensions of time for service of the claim form and particulars of claim. It is to be noted that those agreements expressly referred to extensions of time for service of both the claim form and the particulars of claim.[13]On 3rd July 2007 RPC provided their clients’ detailed response to the request for information contained in the pre-action protocol-type letter of 9th March. On the first page, RPC recorded that although the claimants had commenced proceedings against the defendants, it had been agreed that time for service of the claim form and/or particulars of claim should be extended to enable the pre-action protocol to be complied with. On 19th July, Halliwells responded, saying that they would need time to consider the lengthy response with the claimants. They were conscious that the claim form was due to be served on 2nd August, and they therefore requested a further extension of time of two months to enable them to respond to RPC’s letter and to continue to proceed with the pre-action protocol process. They presumed that RPC would have no issue with that, but looked forward to receiving their confirmation. The letter also noted that RPC had not responded to Halliwells’ request for copies of the defendants’ working and other papers. Halliwells said that it seemed to them to be a classic case for an order for early disclosure to be made.[14]Matters continued and, ultimately, on 26th July 2007, there was a further exchange of e-mails. At 10.59.50 on that day, RPC wrote to Halliwells saying that further to telephone conversations earlier that day, they had agreed that the time for service of the claim form and particulars of claim should be extended to 28th September or 14 days after written notice was given by one party to the other, such notice to be given after 28th September, whichever was the later. My earlier observations apply in relation to that as well: if the notice could not be given until after 28th September, the extension to that date was really irrelevant and the agreement was effectively for an extension of time for 14 days after written notice, such notice being given after 28th September. It is to be noted that, in terms, the extension was 14 days after written notice was given by one party to the other. Mr Dagnall has pointed out that the claimants would not, of themselves, contemplate giving notice that they were going to serve the claim form but would simply do so, but that was the way in which the agreement was expressed. At 12.19.18 on the same day, 26th July, Halliwells e-mailed back to RPC, thanking them for their e-mail and confirming their agreement to the extension of time as set out in RPC’s e-mail.[15]There matters effectively remained. As I have mentioned, I made an order on 3rd June 2008, without opposition, for mutual standard disclosure by exchange of lists, and the matter proceeded to disclosure. I am informed, although, quite properly, I have not been directed to their contents, that there have been mediations in the meantime. However, matters came to life again for present purposes on 7th July 2010. On that day, Halliwells wrote a letter to RPC on a without prejudice basis. Subsequent letters were also written on a without prejudice basis, but it has been agreed, in a letter from RPC of 18th November 2010, that they are content, so that the full story can be put before the court, to waive privilege in relation to certain parts of the without prejudice letters so that the court can see how matters developed with regard to the service of the particulars of claim. On 7th July 2010, Halliwells, in the person of Mr Austin, wrote to RPC. The disclosed part of the letter reads as follows:
“In the circumstances it seems to us that our clients’ only option now is to pursue the litigation in this respect and serve the claim form and particulars of claim.”
I note the reference to both the claim form and the particulars of claim. The letter continues:
“We believe that on 20th March 2007 it was agreed that there should be 14 days’ notice period for service of the same. I would be grateful if you would confirm that we may have 28 days in which to serve the claim form and particulars of claim. We look forward to hearing from you by return.”
[16]On 16th July, Heatons wrote to RPC enclosing notice of change of solicitor, and they also filed a copy with the court. On the same day, RPC wrote back in response to the letter of 7th July. That letter was addressed to Halliwells. It was headed, “Without Prejudice.” The disclosed part of the letter reads as follows:
“Thank you for your letter of 7th July 2010.”
There is then about a page that is redacted, and the disclosed part of the letter continues as follows:
“As far as termination of the stay agreed back in March 2007 is concerned, our clients have no objection to your request for more time, a request that would not have been needed had you simply prepared the particulars of claim and lifted the stay when you were ready to proceed. We do not propose imposing a particular time limit on you for service of the claim form and particulars of claim but would simply ask that our clients be given a minimum of 56 days from service of the particulars of claim in which to serve their defence thereafter. Whilst we have had sight of draft particulars, we assume that those particulars will change materially to reflect the advice on evidence and on the merits which your clients will have received in the intervening period and so as properly to particularise your clients’ case on scope of duty, reliance, causation and loss. We also assume that the claim in relation to the 2000 audit is to be dropped, a matter evidenced by your clients’ not instructing Mr Wilkinson to address that audit at all in his report. It may also be sensible for a case management conference to be convened in the short term. We expect the court will seek an explanation as to what has happened since the matter was last before it, and that further directions will be required, especially given that disclosure has now taken place. Finally, given the financial position of your clients, as shown in their latest financial statements, you will be unsurprised to hear that we have been considering the issue of security for costs with our clients. Before we advance a formal application for security we would invite you to provide proposals as to what security for costs your clients and/or Mr Kilroe are willing to provide to our clients on a voluntary basis.”
It should be noted that that letter referred in terms to termination of “the stay” agreed back in March 2007. It seems to me clear from the letter that the writer at RPC was using the expression “the stay” as referring to the agreement as to extending time for service of the claim form and particulars of claim.[17]The response to that letter from Heatons on 28th July, insofar as it has been disclosed, reads as follows:
“With regard to the service of the particulars of claim, we would be content to convene a case management conference and thereafter set out the timetable for the progression of the claim. If you agree, please confirm in open correspondence. With regard to security for costs, our clients are satisfied that they can meet any costs orders.”
There was apparently no response to that letter from RPC. Accordingly, on Thursday, 14th October Heatons wrote an open letter to RPC as follows:
“We now enclose by way of service upon you our clients’ particulars of claim. Previously you indicated that you would prefer a case management conference to be fixed to progress the claim. May we suggest that you serve your defence, say within the next 21 days and thereafter the case management conference is arranged. Perhaps you would let us have your thoughts on our proposal. We look forward to hearing from you.”
In paragraph 8.3 of his first witness statement Mr Austin says:
“I would point out that this letter and its proposal proceeded on the unequivocal basis that the claim form had the status of served as otherwise the particulars of claim could not be so served. I understood (and the subsequent response did not suggest to me otherwise) that the defendants were and would be satisfied simply with receipt of the finalised particulars of claim document.”
[18]At the outset of this hearing, I enquired whether it was proposed that there should be any cross-examination either of Mr Austin or of Miss Howard, and I was told that that was not proposed, and that the parties would live with the consequences of that. It seems to me, in the absence of any challenge by way of cross-examination, that I have to accept the evidence of each of Mr Austin and Miss Howard at face value, and insofar as it goes. The above letter was sent on Thursday, 14th October. There is no evidence as to when it was actually received, and therefore the presumption would be that it was received on the second working day thereafter, which would have been Monday 18th October.[19]Miss Howard relates her reaction to that letter at paragraphs 25 and 26 of her witness statement. She says that she was surprised by the service of the particulars of claim for the following reasons: first, the letter flew in the face of the proposals RPC had made on 16th July and did not even refer to the material part of that letter; secondly, the letter did not refer to the extension agreement; thirdly, no claim form was attached (or otherwise served or even referred to); and, finally, the attached particulars of claim were at odds with the old unserved claim form, and contained no allegation of negligence in relation to the audit for the year ended 30th September 2000. Indeed, the particulars of claim asserted that the financial statements for that year were correct. Miss Howard makes the point that the allegation of negligence in relation to the 2000 audit had been the primary case that her clients had been defending for more than five years. She goes on to say that she was unsure what to make of all of that. She determined that the best way forward was to deal with the claim formally and properly. The first step was obviously that the extension agreement had to be brought to an end. Accordingly, on 22nd October 2010 RPC wrote to Heatons.[20]Breaking off from Miss Howard’s witness statement for the moment, the letter of 22nd October, which was apparently sent by DX with an e-mail copy late on the day in question (which was a Friday), reads as follows:
“Thank you for your letter of 14th October 2010. It is not clear whether that letter or your without prejudice letter of 7th July 2010 were intended to constitute notice of determination of the stay agreement previously concluded between our clients as you did not accept the proposals we made in our letter of 16th July 2010. In the circumstances, we hereby give the requisite 14 days’ formal notice of determination of the stay but would be agreeable to treating your letter of 14th October as a form of implied notice if you would prefer.”
Mr Dagnall for the claimants has made great play of the reference in that letter to determination of the ‘stay’ agreement. I am not sure whether he went so far as to suggest that the reference to the stay agreement was deliberately intended to be misleading but, if so, I would reject that submission. I would reject any such suggestion for the simple reason that when one goes back to the RPC letter of 16th July, that letter had already referred to matters in terms of “the stay agreed back in March 2007”, and therefore it seems to me that, once again, the agreement to extend time for service was being compendiously referred to as a “stay agreement.”[21]Returning to paragraph 26 of Miss Howard’s witness statement, she refers to that letter and describes it as giving “14 days’ notice of termination”, giving Heatons still more time to serve the claim form whilst indicating that RPC would be happy to treat Heatons’ letter of 14th October as a form of implied notice if they preferred. Miss Howard does not explain why the letter was written in the particular terms it was. Mr Dagnall has a number of criticisms to make of it to which I will return. Miss Howard says that Mr Austin knew that the extension agreement related to service of the claim form and the particulars of claim as the letter of 7th July had made that clear. She says there was no “common assumption to deem service of the claim form” as suggested by Mr Austin’s second witness statement. She comments that he knew, as any solicitor does, that proceedings are instituted by the issue of a claim form, and that it must thereafter be served within four months, or such extended time as might be agreed in writing. She says it is quite wrong for him to suggest that she or the defendants ought to have explained those things to him. She says she had absolutely no reason to believe that it was necessary to do so, and that it was not necessary to do so.[22]Mr Austin sets out his response to RPC’s letter of 22nd October at paragraph 8.4 of his first witness statement. He says that there was no express mention of any need to further serve the claim form, and to which he was therefore not alive; and nothing to suggest that the defendants did not accept the service of the particulars of claim as being valid, and which he therefore assumed that they did. He points out that there was no agreement for any stay of the proceedings, but only to extend time. At paragraph 8.5 he says that in order to seek to clarify what the defendants were seeking to do, he telephoned the relevant solicitor (Jane Howard) on 3rd November to inquire but, as appears from his telephone attendance note record, he was told that she was not there and therefore he left a message for her to return his call. He points out that that was within the 14 days of the letter of 22nd October (whether such period was purportedly running from its date, its sending or its receipt).[23]In paragraph 20 of his skeleton argument, Mr Dagnall says that Mr Austin was confused as to what was meant by references to determining “the stay”, and he therefore telephoned Miss Howard on 3rd November. Mr Austin does not in terms himself say he was “confused”, but merely that he was seeking clarification of what the defendants were seeking to do. At paragraph 8.6 he says that his call was simply not returned. Instead, he says he was then sent the defendants’ solicitors’ letter of 16th November, referring to a termination of “the suspension agreement” and asserting that the claim was at an end, and asserting a claim to costs. He responded as a matter of urgency by a letter of 16th November; and then he exhibits the further correspondence, and refers to the fact that Heatons then progressed the present application which is before me.[24]Miss Howard’s evidence is somewhat different. She says that RPC received no response to the letter of 22nd October but, on 3rd November, Mr Austin left a telephone message for her. She recalls – and she says a contemporaneous note she made records the fact – that despite the assertion in Mr Austin’s witness statement, she did in fact return his call, but was told that he was on the telephone with somebody else. She says that her note also records that she left him a message to say that she would try him again later that afternoon but that, if he wished to e-mail her in the meantime, he should do so. The attendance note is endorsed on an e-mail sent from Debbie Tooke to Jane Howard at 09.52 on the morning of 3rd November. The subject is said to be, “Ian Austin telephoned.” The e-mail reads:
“Asked to speak to Jane - re Bethell/Deloitte. Please call back on [a telephone number is given.] Thanks. D. [Debbie]”
The manuscript reads:
“Returned call. He was on another line. Said I would try him again later this afternoon but that he should feel free to e-mail me in the meantime.”
That manuscript note bears Miss Howard’s initials and the date “3.11.10.” Miss Howard says that although she did not contact Mr Austin again by telephone that day “due to pressure of work”, she received no e-mail from him and, as far as RPC are aware, he made no further calls or other attempts to contact her or her associate, Ian Gordon. (I should say that Ian Gordon had been copied in on the e-mail from Debbie Tooke).[25]Miss Howard says that if Mr Austin was indeed needing to speak to her about something as potentially significant as service of the claim form, she is surprised that he did not make further contact in the days that followed. She goes on to record that, to her surprise, the claim form was not served within the 14 days which followed her letter of 22nd October. Given the passage of time, and noting that they had not heard further from them, RPC wrote to Heatons on 16th November. In that letter, she says that RPC pointed out that they had not served the claim form, and that it was by then too late to do so. The letter itself reads as follows:
“We refer to your letter of 14th October and our letter of 22nd October 2010. In your letter of 14th October you did not specifically address the extant agreement to suspend the time for service of the claim form and particulars of claim. You purported to attach particulars of claim by way of service, but not a claim form. As you know our client had only ever been given the old February 2007 claim form expressly ‘not by way of service’ and the suspension agreement specifically extended the time for both. In our letter we gave the requisite 14 days’ notice to bring to an end the agreed suspension of the time for service of the claim form and particulars of claim. That period has now expired but to our surprise, no claim form has been served. The period permitted for service of the 2007 claim form has expired. In the circumstances our view (and advice) is that the claims are now irreparably time barred under the Limitations Act. Given that your clients are responsible for the costs incurred by Deloitte to date, we are in the process of collating a summary of those costs and will forward them to you under separate cover.”
Mr Austin responded promptly, as one would expect in the circumstances, with a three-page letter dated 16th November 2010. In the course of it, he says that Heatons are concerned that Miss Howard did not see fit to mention an extant need to serve the claim form in either, he says, her letter of “14th October” – but I think he means “22nd” – or by way of return telephone call to the “letter” of 3rd November – but it must be a reference to his telephone call of that date. He then says:
“We, of course, assumed that you did not require anything else in order for the claim to properly proceed.”
In the absence of any challenge by way of cross-examination of those two solicitors and officers of the court, I accept their evidence without question or qualification.[26]That is the factual background leading to the present application. Mr Dagnall suggests that confusion in the minds of those dealing with the matter at RPC first apparently surfaced in July 2007. He refers to RPC’s letter of 25th September 2007, where the letter appears to proceed on the footing that service was required actually 14 days after notice was given, rather than within the 14 days; but he acknowledges that the matter was clarified at the time by Halliwells’ letter of 2nd November 2007, which noted that the solicitors had mutually agreed that time for service of the claim form and particulars of claim continued to be extended until the expiry of 14 days after either side served a notice of determination in order that the parties could continue to seek to comply with the pre-action protocol. Mr Dagnall says that when Halliwells wrote the letter of 7th July 2010, all the claimants had to do was to serve the documents; it was not the claimants who needed to extend time because there was no stay in place. He refers to the definition of “stay” contained in the glossary to the Civil Procedure Rules – page 2665 of the current (2010) edition of Civil Procedure – which is said to mean as follows:
“A stay imposes a halt on proceedings, apart from taking any steps allowed by the Rules or the terms of the stay. Proceedings can be continued if a stay is lifted.”
Mr Dagnall makes the point that there was no true stay; all that there had been was an agreement extending time for service of the claim form and particulars of claim.[27]In relation to RPC’s response of 16th July 2010, Mr Dagnall notes that it proceeds on the basis that a stay is in place. He also comments that the indication given by that letter was that time would continue to be no problem, although, he says, the wording of the letter lacked technical clarity. He makes the point that, as related by Mr Austin in his latest witness statement, it was at that point that Halliwells went into administration, and Mr Austin left to go to Heatons, taking the claimants’ case with him. Unfortunately, the administrator of Halliwells sold that firm’s work in progress to another firm, HBJ Gateley Waring (Manchester) LLP, and that firm refused to deliver any files to Heatons prior to agreement on a work in progress figure. It was that which is said to have delayed the obtaining of all the relevant files until a work in progress figure was actually agreed after 16th November 2010. Mr Dagnall makes the point that RPC never responded to Heatons’ letter of 28th July 2010.[28]Mr Dagnall accepts that no further copy of the claim form accompanied Heatons’ letter of 14th October, nor was any response pack sent with it. A response pack was required by CPR 7.8(1), although I accept that failure to serve a response pack does not invalidate the service of the particulars of claim. By CPR 9.1(1) and 10.3(1), the time for the defendants to acknowledge service of the proceedings was 14 days after service of the particulars of claim. It is for that reason that a response pack should be served with particulars of claim if they do not accompany the claim form itself. Mr Dagnall makes a number of submissions in relation to the letter of 14th October. He makes the point that, as far as Mr Austin was concerned, that letter proceeded on the unequivocal basis that the claim form had the status of being served. Otherwise, he says, the particulars of claim could not have been validly served. As a matter of law, Mr Dagnall acknowledges that the subjective intention or understanding of Mr Austin is strictly irrelevant. That was a point made in the speech of Lord Steyn in the leading case of Mannai Investment Co. Ltd. v Eagle Star Life Assurance Co. Ltd [1997]AC 749at page 767, between letters G and H. There Lord Steyn said that the question was not how the actual landlord had understood the notices – the construction of the notices must be approached objectively – but the issue was how a reasonable recipient would have understood the notices. In considering this question, the notices must be construed taking into account the relevant objective contextual scene.[29]Mr Dagnall places reliance on all that is said by Lord Steyn at pages 767 D through to 768 H. He places particular reliance on a statement at page 768 E that says:
“Prima facie one would expect that if a notice unambiguously conveys a decision to determine a court may nowadays ignore immaterial errors which would not have misled a reasonable recipient.” 30. He places reliance even more particularly on the statement at page 768 G to H: “Even if notices under contractual rights reserved contain errors they may be valid if they are ‘sufficiently clear and unambiguous to leave a reasonable recipient in no reasonable doubt as to how and when they are intended to operate.’”
That test is said to postulate that the reasonable recipient is left in no doubt that the reserved right is being exercised. It acknowledges the importance of such notices. The application of that test is said to be principled and cannot cause any injustice to a recipient of the notice; and Lord Steyn gratefully adopts it. Mr Dagnall makes the point that, from the claimants’ perspective, and that of their solicitors, the claim was now proceeding. There was no intention, or any need, he says, to serve a claim form by way of a separate document.[30]He then refers to the response of RPC of 22nd October. He makes the point that that letter does not take any issue with the service of the particulars of claim, nor does it say that there is any need to serve a claim form, nor does it purport to determine any extension of time for service of the claim form and particulars of claim. Mr Dagnall says that it is effectively acknowledging what is said to be implicit in the letter of 14th October, that the claim form should be treated as having already been served. He makes the point that had any issue been taken either with the service of the particulars of claim, which he says pre-supposed service of the claim form, or with the need to serve the claim form, or had the extension of time for service of the claim form been expressly determined, then the matter would have been made clear to Mr Austin and the claimants, and matters would have proceeded very differently. He says that that, and Mr Austin’s perception, are relevant to the construction of the letter of 22nd October and, in particular, whether it has the effect of determining the extension of time; in particular whether, in its context, any reasonable person would have said that it was determining the extension of time for service of the claim form. He subjected the letter of 22nd October to a detailed and sustained analysis. He said that if there is any potential for mistake, then it does not satisfy the test laid down by Lord Steyn in Mannai. He says the question is whether no reasonable recipient would have understood it otherwise than as determining the extension of time that had already been agreed between the parties for service of the claim form. It is in this context that he applied the test postulated by Lord Steyn that the reasonable recipient should be left in no doubt that the extension of time for service of the claim form was being determined, and that it was being required to be served within 14 days.[31]As I have indicated, Mr Austin’s subjective understanding of what the letter was doing is not strictly relevant; it is how the reasonable recipient would have construed the letter. Mr Austin clearly had some concerns about it because otherwise he would not have telephoned RPC on 3rd November. I find it surprising that he did not follow up his telephone call when he failed to get through to Miss Howard. I cannot criticise her for being too busy to return the call more than once. It seems to me that the burden was upon Mr Austin, if he was concerned about any uncertainty in the letter of 22nd October, to put his inquiry to RPC, even if only in the form of an e-mail. Had he done so, the present situation might not have developed.[32]I acknowledge that in referring to determination of the ‘stay’ agreement, the writer of the letter is expressing herself infelicitously; but it was the way in which the matter had previously been expressed in RPC’s letter of 16th July, and I acquit RPC of any deliberate intention to mislead. Having said that, and absent any explanation as to how the letter came to be phrased in what seems to me to be the very careful and calculated way in which it was, it does seem to me that considerable attention had been given to the way in which the letter should be expressed: it made no reference to the particulars of claim; it made no reference to the need for service of the claim form in express terms. I have little doubt that RPC were seeking to set a trap for Heatons; but, equally, it seems to me that the fact that a trap was being set is clearly apparent from the face of the letter itself, if any reasonable solicitor looks at it with any degree of care. The overriding feature of it is that it gives the requisite 14 days’ formal notice of determination of the stay. I accept Mr Dagnall’s submission that it was not a stay that was being determined, but an extension of time. However, any reasonable recipient of that letter, knowing the background – knowing that the only relevant agreement had been one as to an extension of time for service of the claim form – must undoubtedly have construed this letter, had he or she thought about it with any degree of care, as operating, and operating only, to determine the agreement for an extension of time for service of the claim form, and requiring the document that remained outstanding, namely the claim form, to be served within 14 days. It seems to me that the 14-day period would run from receipt of the letter by the recipient. In fact it was received on 26th October, having been sent on Friday the 22nd, the 26th being the second working day since it was sent. It was also sent by e-mail. I do not consider the time would run until the e-mail had been followed up by a hard copy, but I acknowledge that that might be open to some debate. However, the fact is that whether you take 14 days from the receipt of the e-mail, or 14 days from receipt of the hard copy of the letter, the claim form was not served within that time.[33]The test laid down by Lord Steyn is, to my mind, clearly satisfied. If Mr Austin did not read the letter in that way, then it seems to me that he was not displaying the characteristics of the reasonable recipient. The test is whether the properly informed reader, acting reasonably, would have understood the letter as determining the extension of time for the service of the claim form; and, in my judgment, he or she would.[34]Whilst I have considered all the points that Mr Dagnall has made, both in written and in oral submissions, it seems to me that there is no potential for mistake. Mr Dagnall referred me, in the context of mistake, to observations of Sir John Chadwick, with which both Lords Justices Maurice Kay and Longmore agreed, in the case of Crest Nicholson (Londinium) Ltd. v Akaria Investments Ltd. [2010]EWCA Civ 1331 at paragraphs 37 to 39. In my judgment, the reasonable recipient would not conclude that there was any mistake here, in the sense that RPC had thought that there was a stay rather than an extension of time for service. The reasonable recipient would have known that RPC was referring to the one and only agreement in existence with regard to the documentation in the case, namely the extension of time for service of the claim form and particulars of claim. I do not consider that the reasonable recipient might think that the sender of the document had been operating under the mistaken basis that there was a stay in place. The letter clearly intended to determine something; and the only thing it could determine was the agreement for an extension of time for service.[35]I am satisfied that the defendants’ solicitors had determined the extension of time for service of the claim form, and that it was not served in time. Mr Dagnall submits that valid service of the claim form occurred when the particulars of claim were sent on 14th October. He makes the point that the claim form had previously been delivered in 2007, expressly not by way of service, and was held by the defendants’ solicitors. He submits that the letter of 14th October removed the suspensive “not-by-way-of-service” condition so that the claim form was then to be treated as delivered and held by the defendants’ solicitors as a served claim form. He submits that that is quite clearly implicit in, and the only reasonable way for any reasonable recipient to have read, the letter of 14th October. He relies on principles of both the reasonable commercial construction of the document and that mistakes are to be overridden where the import would be clear to any reasonable recipient. He relies upon the following material: first, that the defendants’ solicitors had already received, and retained, a copy of the claim form. He says that it would be entirely arid to have required the claimants to provide a further copy. He refers to observations of Sir Anthony Clarke, the Master of the Rolls, in Olafsson v Gissurarson (No 2) [2008]EWCA Civ152 – [2008] 1 WLR 2016, in particular at paragraph 32, referring to the utter pointlessness of going through a second attempt to achieve something in law which had already been achieved in fact. He makes the point that the CPR should be applied so as to achieve justice rather than insist upon arid technicalities. He makes the point that the extension of time agreement and the subsequent correspondence all envisage the service of the claim form and particulars of claim occurring simultaneously, and it was impossible to conceive of the claimants, especially in circumstances where the defendants had not even purported to determine the extension of time agreement, serving one but not the other. He makes the point that by the letter of 7th July 2010, the claimants were saying that they proposed to serve the claim form and particulars of claim and were clearly intending that the two should be treated as served together. The claimants, in their letter of 14th October, said that they were serving the particulars of claim by way of service and suggested service of a defence within 21 days. That service could not be valid, and the point about the defence would not make sense, unless the claim form were to be treated as served. Mr Dagnall therefore submits that the claim form was served on 14th October.[36]I cannot accept those submissions. In addition to the reasons given by Mr Plewman in his written skeleton, which I will not burden this judgment by repeating, the position is that the letter of 7th July had expressly contemplated service of both the claim form and the particulars of claim. It was only the latter document that was served on 14th October. There had never been any agreement that the claim form need not be served if particulars of claim were served, and nothing was said in the letter of 14th October about the claim form. I simply fail to see how, impliedly, the 14th October letter operated to abrogate the express agreement as to service of the claim form within 14 days of it being called for. Equally, it does not seem to me that there can be any estoppel, either of a promissory nature or by way of an estoppel by convention. I acknowledge that the observations, technically and strictly obiter (because he was in a minority on the issue), of Lord Goff of Chieveley in the case of Kenneth Allison Ltd. v AE Limehouse & Co. [1992] 2 AC 105 indicate that proceedings can be treated as served pursuant to some form of estoppel by convention. In that case itself, Lord Goff acknowledged that there had been no representation capable of giving rise to a promissory estoppel – and that seems to be the case here – and I cannot see any basis for the assertion that there was anything giving rise to an estoppel by convention. There was simply no reference in the letter of 14th October to service of the claim form not being required, and nothing in the letter of 22nd October 2010 from RPC to suggest that they were proceeding on the footing that the claim form had indeed been served. Indeed, that would be entirely inconsistent with the final paragraph of that letter, “We hereby give the requisite 14 days’ formal notice of determination of the stay.” I can discern no estoppel by convention.[37]Given that I have found that the defendants had called for service of the claim form within 14 days, it was not served within that period; and nothing done after 16th November can amount to valid service of the claim form. In those circumstances, it seems to me, therefore, that Mr Dagnall must rely upon either CPR 6.15 or CPR 6.16 because I find that the claim form has not been served within the period of its validity, as extended by agreement between the parties. CPR 6.15 provides:
“(1) Where it appears to the court that there is a good reason to authorise service by a method or at a place not otherwise permitted by this Part, the court may make an order permitting service by an alternative method or at an alternative place. (2) On an application under this rule, the court may order that steps already taken to bring the claim form to the attention of the defendant by an alternative method or at an alternative place is good service.”
In those circumstances, as orally amended during the course of this hearing, Mr Dagnall seeks an order pursuant to CPR 6.15 that the provision of the claim form to the defendants and their solicitors in 2007, and the sending and contents of the letter from the claimants’ solicitors to the defendants of 14th October 2010, serving the particulars of claim, should be treated as good service of the claim form. He says that there is good reason for the court to make such an order. He points out that CPR 6.15 is a new rule, dating from 1st October 2008, which expands the old concept of authorising prospective substituted service so as to permit the court to authorise retrospectively the bringing of a claim form to the attention of the defendant as having effect by way of substituted service where there is good reason to do so, and to mitigate the restrictive effect of cases decided before the new rule was introduced. He submits that CPR 6.15 has to be read in the context of the overriding objective in CPR 1.1 to deal with cases justly, and also Article 6 of the European Convention of Human Rights as to the parties having a right to have their civil rights and obligations determined by the court within a reasonable time.[38]He draws attention again to what was said by Sir Anthony Clarke in the case of Olafsson v Gissurarson (No 2). He has drawn my attention to a decision of Mr Justice Andrew Smith in the case of Andrew Brown vInnovatorone Plc and others [2009] EWHC 1376 (Comm),where that judge held that the power to permit service by an alternative method required “good reason”, and that that was less than “exceptional circumstances”. Mr Dagnall acknowledges that on the facts of that case, simply using an inappropriate method very late in the day had been held not to be sufficient; but he makes the point that Sir Anthony Clarke MR’s observations in Olafsson at paragraph 32 had not been drawn to Mr Justice Andrew Smith’s attention. He also has taken me to the decision of His Honour Judge David Cooke, sitting as a Judge of the Chancery Division in the Birmingham District Registry, in the case of Brooks v AH Brooks and Co. (a firm) [2010] EWHC 2720(Ch). In that case, the effect of service had been to bring the claim form to the relevant defendants’ attention, in that case by other defendants sending a copy of the document to them, so that the relevant defendants had had an opportunity to participate in the defence. He submits that in this case, the court would be authorising service by the previous provision in 2007 of the claim form, combined with the letter of 14th October 2010, which could only make sense if the claim form was then being treated as already served. He submits that there is good reason to authorise service so as to have retrospective effect. That is because, first, the defendants, and their solicitors, have had a copy of the claim form for a very substantial period, and there has been a court application for disclosure and a mediation on two occasions in relation to the litigation of which the claim form constitutes a key element. He says that the claim form had been brought to the defendants’ attention a long time before, and had been considered and acted upon by the defendants, and even by the court on an application between parties. He says that in Olafsson and in Brooks the fact that the defendants had a copy of the claim form was of great relevance. He says that the claimants had not delayed in serving the claim form because the parties had agreed an extension of time, so that this was not a case of service at the last minute. He says that the claimants were clearly proceeding, by the letter of 14th October, on the basis that the claim form was now to be treated as served, and without the need to engage in the arid exercise of resending the document. Such letter was sent well within the extension of time which, on any basis, had not then been the subject of any notice of determination. Again, he says it was not a question of the claimants having left matters to the end of the service period, as in Brown.[39]Mr Dagnall also says that the defendants’ response by their letter of 22nd October appeared to accept the situation of service since it did not challenge the service of the particulars of claim and thus, he says, by extension the claim form. It used extremely inapposite language if it was seeking to say that the claim form still needed to be served, and also that a time limit was being imposed regarding such. He says that when Mr Austin sought to clarify matters within time, there was no second attempt to return his telephone call. He says that there is therefore sensible conduct by the claimants, and full knowledge and appreciation of the claim form and its contents by the defendants, and that the result which the claimants are seeking to achieve, of having perfected the claim form and particulars of claim stageof the litigation, is a meritorious one, and that an inappropriate and effectively “trappy” – the word he uses – approach is being adopted by the defendant.[40]I do not accept those submissions. I do so principally because it seems to me that it would subvert the whole basis of the agreement reached between the parties as to the extension of time for service of the claim form and particulars of claim. It seems to me that it is in the interest of the overriding objective for parties to be able to reach agreement for an extension of time for service of the claim form if this enables them to achieve a resolution of litigation without over-extensive resort to the courts, with a consequent expenditure of legal costs and use of court time. However, for the parties to proceed in this way, it is also important that the court is seen to be upholding the basis upon which they have agreed that they will proceed. Mr Dagnall’s approach, it seems to me, would operate to subvert the parties’ contractual autonomy, and it would fail to give effect to the important principle of freedom of contract. This case, it seems to me, is very different from the case of Brooks and also the case of Olafsson. In both of those cases, objectively viewed, the claimants had attempted to effect service of the claim form on the relevant defendant in time, and in an appropriate way. Here there was no such attempt to effect service. The cases of Brooks and Olafsson were effectively cases of mis-service and not of non-service.[41]Adopting the language employed by Lord Justice Neuberger in the case of Kuenyehia and others v International Hospitals Group Ltd. [2006] EWCA Civ 21at paragraph 36, this was not a case of “a minor departure from a permitted method of service or an ineffective attempt to serve by a permitted method within the time limit”. This was not a case of mis-service but one of non-service. The claim form had been delivered in 2007 expressly “not by way of service”. The defendants agreed to that; and the parties agreed that either party could determine what was effectively the standstill agreement by giving 14 days’ notice for service of the claim form. That is what the defendants’ solicitors did by their letter of 22nd October. The Heatons letter of 14th October had said absolutely nothing about service of the claim form. It seems to me that the parties should be held to what they had agreed; and, after all, it was the claimants’ solicitors who had originally proposed it back in 2007. For those reasons, to hold that there was good service would be to subvert the express agreement between the parties, and fail to give effect to the important principle of freedom of contract and the contractual autonomy of the parties. It would be a wholly inappropriate exercise of the court’s discretion to effectively allow the claimants to rewrite the agreement between the parties. It does not seem to me here that there is any good reason to authorise service contrary to what the parties had agreed.[42]The claimants’ final fallback position is to rely upon CPR 6.16: the power of the court to dispense with service of the claim form. That enables the court to dispense with service of a claim form in “exceptional circumstances”. This case seems to me to be miles away from the case of Olafsson v Gissurarson (No 2) relied upon by Mr Dagnall. There a claim form had been served by the Foreign and Commonwealth Office, but not in a manner that complied with Icelandic law, as the law of the place in which the service was to take effect. That was not the fault of the claimant’s solicitors. At paragraphs 24 through to 28, Sir Anthony Clarke described the circumstances in which service had come about. He began, at paragraph 24, by describing the case as “a truly exceptional” one; and he reiterated that at paragraph 32. He concluded that paragraph by saying the following:
“In my judgment, on the particular facts of this case, where the claim form was issued in time and delivered to the defendant within the period for service by a method of service which the claimant and his solicitors could reasonably have thought was a reasonable method of service, and where the defendant knew precisely what the claim was from the claim form, it would be unjust and contrary to the principle of the overriding objective that cases should be determined justly to refuse the relief.”
It should be borne in mind, first, that what the Court of Appeal was doing, as is apparent from paragraph 33, was holding that there was no basis upon which the Appeal Court could properly interfere with the first-instance judge’s exercise of his discretion to dispense with service under CPR 6.16. In any event, one of the key elements identified by Sir Anthony Clarke at paragraph 32 is absent from the present case: this is not a case where the claim form was delivered to the defendants within the period for service by a method of service which the claimants and their solicitors thought was a reasonable method of service. The claim form had been delivered expressly not by way of service, and was never delivered to the defendants again; nor was any statement made that by serving the particulars of claim the claimants were treating the claim form as having, by that act, been served. There was nothing to suggest that the claimants were regarding the not-by-way-of-service condition attached to the previous delivery of the claim form as in any way having been extinguished. Again, it seems to me that it would be an impermissible exercise of the power under the rule to dispense with service of the claim form in those circumstances.[43]For all those reasons, it seems to me quite clear that the claim form has not been validly served within time, and that the claim is now statute barred. What flows from that seems to me to be quite clear: that I should accede to the relief sought on the defendants’ own application by declaring that the court has no jurisdiction to hear the claim because the claim form was not served in time. It is not suggested that the resealed claim form which was later served is capable of saving the position.[44]The question then arises as to what should happen to costs. I am not here dealing with the costs of the instant applications; I am effectively dealing with the costs in the period prior to 17th November this year. As to that, Mr Dagnall’s position was that if I find that the claim form has not been served, then I should not award the costs of the claim to the defendants other than the costs referable to the present applications, as to which I have still to hear submissions. I am satisfied, since a claim form was issued, that I do have jurisdiction to make an order for costs. This is not a situation in which parties have simply gone through the pre-action protocol process without proceedings being issued. A claim has been issued here, and therefore the court has the jurisdiction to make an order as to costs. The question is whether, in the exercise of the court’s discretion, it should make an order for costs; and, if so, in what form. By CPR 44.3:(1) The court has discretion as to – (a) whether costs are payable by one party to another; (b) the amount of those costs; and (c) when they are to be paid.(2) If the court decides to make an order about costs – (a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but (b) the court may make a different order. [...] (4) In deciding what order (if any) to make about costs, the court must have regard to all the circumstances, including – [and this is the only relevant provision here] (a) the conduct of all the parties. [...] (5) The conduct of the parties includes – (a) conduct before, as well as during, the proceedings, and in particular the extent to which the parties followed the Practice Direction (Pre-Action Conduct) or any relevant pre-action protocol.” In this case, the relevant protocol is the Professional Negligence Protocol.[45]Mr Dagnall points to the fact that because of the failure to provide relevant documentation, the claimants found themselves in the position of having to issue proceedings in 2007 in order to prevent the claim becoming statute barred. He has pointed to a request for documents dating back to 17th May 2005. The relevant documents were identified at page 8 of that letter. If one then goes to the order that I made on 3rd June 2008, it was one for mutual standard disclosure of documents by reference to the issues identified in the then draft particulars of claim which, for the avoidance of doubt, was to extend to documents within the classes identified in paragraph 13 of Miss Dormer’s supporting witness statement. When one goes to that document, one sees in paragraph 13 reference to the various classes of documents identified in the letter of 17th May 2005. It is common ground that if the pre-action protocol process had been gone through without the issue of legal proceedings, there would have been no power to order costs. Thus, Mr Dagnall submits that since the only reason why proceedings were issued, giving rise to a jurisdiction to make a costs order, was the defendants’ failure to comply with requests for documents pursuant to the pre-action protocol, no order for costs should be made against his clients.[46]For the defendants, Mr Plewman says that it is not as simple as that. He goes through the correspondence and says that with the letter from RPC of 3rd July 2007, the pre-action protocol stage came to an end. Mr Plewman draws my attention to an e-mail of 26th July 2007 from RPC to Halliwells in which it was said that, having provided Halliwells with the response letter of 3rd July, RPC now considered that the deemed pre-action period, which it had been agreed was in place even though legal proceedings had been commenced, had ended, and that accordingly the pre-action process had been completed. That was reiterated at paragraph 8 of the 10th August 2007 letter, where RPC said that the claimants were now effectively seeking pre-action disclosure; and at numbered paragraph 5, that the pre-action protocol process in the present case had been completed, and the defendants had complied with their obligations in full. Mr Dagnall points to later correspondence, and in particular a letter from Halliwells of 2nd November 2007, in which Halliwells sought a further extension of time for service of the claim form in order that they could continue to seek to comply with the pre-action protocol.[47]In my judgment, looking at the matter in the round, it does seem to me that by the time Halliwells had received and had the opportunity to digest RPC’s letter of response of 3rd July 2007, effectively the pre-action protocol stage had come to an end. The defendants could have called for service of the claim form and the particulars of claim at that stage. They chose not to do so in order to save costs; but, nevertheless, costs were still being incurred, and incurred in the context of a claim that had already been issued. It does seem to me somewhat anomalous that if you go through the pre-action protocol stage before proceedings are issued, you should not be entitled to any costs, whereas the court does have jurisdiction to award costs once proceedings have been issued. However, here it seems to me that enough had been done by the time that Halliwells had had an opportunity reasonably to consider RPC’s response in their letter of 3rd July. Thereafter, it does seem to me that costs should become part of the costs of the litigation that was already on foot. It seems to me that that gives sufficient regard to the need to have regard to pre-action conduct, and the need to comply with any relevant protocol. For those reasons, it does seem to me that I should take a period, and the one which I will adopt is essentially the response to RPC’s letter of 10th August, namely the 19th September letter 2007 from Halliwells, as the point from which litigation costs should start running. I do so in the exercise of my discretion as to costs, and having regard to the factors identified in CPR 44.3. (End of judgment)

Cited in 1 later judgment