Lincolnshire County Council v Mouchel Business Services Ltd & Anor [2014] EWHC 352 (TCC)

[2014] EWHC 352 (TCC)

Case No HT-13-259

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 21/02/2014

Before

THE HONOURABLE MR JUSTICE STUART-SMITH

Between

Lincolnshire County CouncilClaimant

(1) Mouchel Business Services Limited1 st Defendant

(2) R.G. Carter Building Services Limited2 nd Defendant

James Leabeater (instructed by Lincolnshire Legal Services) for Claimant

Lynne McCafferty (instructed by Beale and Company LLP) for 1st Defendant

Hearing Hearing dates: 13 February 2014

Judgment

Introduction

[1]Where a party issues protective proceedings hard up against the expiry of the limitation period, it is expected to pursue those proceedings promptly and effectively; and if it subsequently seeks and obtains orders extending time for the service of the Claim Form or Particulars of Claim without notice to the other party, it dices with procedural death. These simple propositions should be known to all professionals conducting litigation. They were established long before the recent reforms of the Civil Procedure Rules.

[2]The First Defendant [“Mouchel”] applies to set aside the order of Edwards-Stuart J made on 15 January 2014 on the Claimant’s application without notice for an extension of time for service of the Claim Form and Particulars of Claim. The application had been issued on 23 December 2013. Edwards-Stuart J extended time to 18 April 2014 and gave Mouchel permission to apply to vary or discharge his order. His order was the second occasion on which the Claimant [“Lincolnshire”] had obtained an extension of time for service of the Claim Form and Particulars of Claim. Having issued these proceedings on 19 July 2013, Lincolnshire promptly sought and obtained an extension of time for service (without notice to Mouchel) to 18 January 2013. That order was made by Akenhead J on 23 July 2013. It may therefore be seen that the combined effect of the orders of Akenhead J and Edwards-Stuart J has been to extend time for service of the Claim Form and Particulars of Claim by five months.

[3]Mouchel’s application is supported by evidence from Mr Charles Aitchison, a solicitor at Beale & Co. Lincolnshire relies upon two witness statements from Mr Jeremy Hanley, the in-house solicitor having conduct of the matter for Lincolnshire, and one from Mr Michael Watson, an employee of Lincolnshire.

The Factual Background

[4]Mouchel is an architect. It is alleged that Lincolnshire outsourced architectural services to Mouchel by a contract executed by way of deed on or about 3 April 2000. Later in 2000 Lincolnshire wanted to procure the extension of a science block at Boston Grammar School, which was then a school under Lincolnshire’s control as local education authority. The School is now an academy but Lincolnshire has retained the right to bring these proceedings. Lincolnshire alleges that Mouchel carried out the design of the building. The works were carried out by a building contractor which is now the second Defendant [“the Contractors”].

[5]The building works started on site in about May 2001. About a year after construction was finished it became apparent that the building had problems with rising damp. The exact date on which this became apparent is not clear, but practical completion was achieved on 28 March 2002, which indicates that it was in about March 2003. The Protocol Letter sent by Lincolnshire to Mouchel on 3 December 2013 alleges various problems including a failure to seal sheets of the damp proof membrane together or to the damp proof course, the failure to implement a suitable slope away from the outside of the building, and a failure to incorporate a “step” or “toe” in the design of the concrete raft to prevent water pooling on top of the concrete slab.

[6]Three points may immediately be noticed: i) Although the Protocol letter alleges failures of inspection and supervision, the Claim Form advances a claim in respect of failure of design but no express claim in respect of failures of inspection or supervision; ii) Neither the Protocol letter nor the Claim Form identifies when Mouchel prepared its design of the relevant parts of the structure; however iii) Since the defects are all related to the ground slab, with the possible exception of landscaping, it is probable that the design would have been completed and implemented relatively early on in the construction process. All that is known is that works started on site in May 2001 and were practically complete in March 2002. This strongly suggests that the floor slab works would have been carried out well before the end of 2001. The implications of these dates for limitation when proceedings are issued in July 2013 and not served within the four months prescribed by the rules are obvious.

[7]Returning to the chronology, correspondence between the parties about the defects started in 2009 or, at the latest, early 2010. By May 2010 Mouchel had carried out a preliminary investigation with the Contractors and had written to the School identifying four factors which could have contributed to the damp in the building. These factors were that the building was low lying; the foundations were designed as a very shallow slab/raft on piles to avoid disturbance of the ground below; the finished floor level at thresholds were level with external ground level; and poor maintenance and housekeeping. Correspondence between the parties about the damage continued throughout 2010 and 2011. By April 2011 the Governors of the School had asked Mouchel and the Contractors to accept responsibility for the defective damp proof membrane and for all subsequent remedial works but that acceptance was not forthcoming from either party.

[8]Lincolnshire instructed its Legal Services Department [“LSL”] in August 2012. In December 2012 and February 2013 expert consulting engineers instructed on behalf of Lincolnshire undertook intrusive investigations and reported on the causes of the damp. The February 2013 report concluded that Mouchel’s design was “fundamentally flawed”.

[9]In July 2013 Mr Hanley took over from the colleague who had been handling the matter until then. He appreciated the danger of limitation problems and arranged for the issue of proceedings against Mouchel and the Contractors on 19 July 2013. He also issued the application which requested an extension of time for service to 18 January 2014 but no other directions. The application was said to be brought under section 2.3.2 of the TCC Guide. In support of the application it was said that Lincolnshire had not complied with the relevant pre-action Protocol before issuing proceedings and that Lincolnshire “is desirable of completing the steps set out [in] the Protocol. Accordingly, the Claimant submits that an extension of time for service of the Claim Form and Particulars of Claim is necessary to enable the parties to take the steps set out in the Protocol. As the parties will need to inspect the works as part of the Protocol steps, it is anticipated that the steps to be taken under the Protocol will take up to 6 months to complete.” LSL did not give notice of the application to the Defendants.

[10]On 23 July 2013 Akenhead J granted the extension, ordering that “the time for service of the Claim Form and Particulars of Claim be extended to 18 January 2014 to enable the parties to comply with the Protocol for Construction and Engineering Disputes.” The order thus had two constituent parts: proceedings had to be served by 18 January 2014 and Protocol was to be complied with by then.

[11]Two things should have been obvious to Lincolnshire. First, it was not entirely in its hands whether the Protocol would be complied with, since it applied to the Defendants too. Second, and more importantly, having set the timetable itself, it was imperative that Lincolnshire should act promptly if it was to be in a position to serve the proceedings having complied with the Protocol on or before 18 January 2014 For the purposes of this judgment I ignore the inconvenient fact that 18th January 2014, to which date Lincolnshire had requested and obtained its extension of time, was a Saturday. .

[12]The need for prompt action is demonstrated by considering when the protocol steps would have to be carried out in order to meet that deadline. Working backwards, the Protocol envisages a pre-action meeting for the parties to agree the main issues in the case and to resolve the dispute without resort to litigation if possible. That meeting is to take place within 28 days after receipt of a Defendant’s letter of response. Assuming that the meeting would have to take place about a week before 18 January if it was to serve its purpose and still allow time to serve proceedings if necessary, it would be necessary for the letter of response to be received by about 14 December 2013. The Defendant has 28 days in which to respond to the letter of claim, which means that the letter of claim was required to be sent by about 16 November 2013.

[13]What in fact happened was that Lincolnshire did not issue its letter of claim until 3 December 2013, four and a half months into the period allowed by Akenhead J’s order. On the evidence, LSL took no effective steps to progress its claim or the protocol procedure between 19 July and mid-September 2013. Mr Hanley’s explanation for this is that it took him some time to get to grips with the papers in order to provide detailed instructions to an expert and that between July and September he had two weeks annual leave and had to cover for other members of his team who had annual leave during that period.

[14]Mouchel inspected the science block on 2 September 2013 without experts being in attendance. Early on 11 September 2013 Mouchel emailed Lincolnshire asking for convenient dates for them to attend site with a contractor. Lincolnshire had not carried out any further expert inspection of its own since 18 July 2013; nor had it suggested any joint inspection. It was in possession of the two reports from its existing expert but on 11 September 2013 it instructed a further expert to report. After further correspondence, including a request for documentation by Mouchel, a joint inspection was arranged for 24 October 2013. It was arranged to take place during half term because the School did not want the inspection to be carried out during term time. There is no reason on the evidence why a joint inspection could not have taken place before term started in early September 2013. Certainly, there is no reason why Lincolnshire could not undertake any further investigations that it considered necessary between 19 July 2013 and the beginning of term.

[15]The report prepared by Lincolnshire’s new expert after the 24 October site visit was provided to Mr Hanley on 8 November 2013. On 11 November 2013 instructions were sent to counsel to draft the letters of claim against both Defendants. On 25 November 2013 Beale & Co chased LSL for a letter of claim. Counsel produced their drafts on 26 November 2013. After approval by the client, they were despatched on 3 December 2013, wrongly dated 3 November.

[16]On 19 December 2013, Mr Hanley wrote to Beale & Co:

“I appreciate that you will still be in the process of taking instructions in connection with the letter of claim. … I would … ask you to confirm by 4.00 pm tomorrow whether or not you consider that there is sufficient time for your client to respond and for a meeting to take place in compliance with the protocol prior to the existing stay ending on 18 January. In the event that I have not heard form [sic] you by then I shall instruct Counsel to settle draft Particulars of Claim to ensure that the claimant is in a position to serve the papers within the existing timescales.”

[17]Just after 4.00 pm on 20 December, Beale & Co replied that it was their intention to provide Mouchel’s response in accordance with the Protocol and that they would be available to attend a meeting in the week commencing 13 January 2014. In the event, they replied to the letter of claim on 24 December 2013, well within the 28 days permitted by the Protocol.

[18]The previous day, 23 December 2013, Mr Hanley had issued the application for a second extension. Once again, he did not request any other directions. The application was supported by his first witness statement, in which he said that preliminary letters had been sent to the Defendants in July 2013 inviting them to carry out their own expert inspections of the building. He said that the Claimant had “instructed its own expert for the purposes of the proceedings”, but did not explain that it had only done so in September. He said that “the school was not willing to allow an invasive inspection of the building to take place during term time so inspections were carried out by experts instructed by [Lincolnshire] and [Mouchel] on 24 October during the school’s half term. The second defendant’s expert inspected during the school’s summer holiday break.” He did not disclose that he had taken no effective steps between July and mid-September 2013. He said that Mouchel had not responded to the letter of claim but disclosed that Beale & Co had “indicated that it is their “intention” to respond” and that they had suggested a meeting in the week of 13 January 2013. He explained that the Second Defendant had indicated that it wanted the claim against it to be referred to arbitration and had asked for documents and information before responding to the letter of claim. He summarised the position by saying:

“In order for there to be a meaningful meeting in accordance with the protocol all parties must be ready to attend that meeting. The second defendants have indicated that they will not be in a position to do so priory [sic] to expiry of the existing stay. Although [Mouchel’s] solicitors have indicated that they anticipate being able to meet during the week commencing 13 January 2014 this is very close to the expiry of the existing stay and would not be productive without the attendance of the first defendants. In addition the existing stay does not allow time for the parties to attempt a resolution of the matter by way of mediation should that be considered a way forward.”

[19]Throughout his witness statement Mr Hanley referred to the existing order of Akenhead J and the order for which he was applying as “a stay”. This was incorrect as no stay had been imposed: what had happened was that the Court had extended time for service of proceedings and compliance with the Protocol.

[20]The application was issued two working days after Mr Hanley’s email to Beale & Co on 19 December 2013. He did not give Mouchel notice of the application either before or after issuing it. 23 December was his last day in the office until 2 January 2014, so he was not there when Mouchel’s response to the letter of claim was sent the following day. When he returned, he did not acknowledge receipt of the letter of response; nor did he take steps to arrange a meeting with the Defendants. Beale & Co emailed him on 8 January 2013 asking him to acknowledge receipt and for his current proposals for a pre-action meeting “and more generally the ongoing progress of this matter.” When he replied the next day, Mr Hanley confirmed receipt of Beale & Co’s letter, saying that he would respond to it “very shortly” and said “In the meantime please confirm by return if you are instructed to accept service.” He did not make any proposals for the suggested meeting and did not give notice of his application for a further extension. He did not then know the outcome of his application, though he had been informed that he should ring the Court that afternoon to find out. In the event, the Court rang him on the afternoon of 15 January 2014 to tell him that Edwards-Stuart J had made the order. At 15.38 that day Beale & Co confirmed that they were instructed to accept proceedings. They reserved the right “to bring to the Court’s attention, and take such action as is required in respect of your client’s breach of the Order dated 23 July 2013 in failing to comply with Pre-Action protocol requirements.” Two days later, on 17 January 2014, LSL responded to Beale & Co’s letter of 24 December 2013 and informed them that time for service had been extended to 18 April 2014. On 23 January 2014 Beale & Co notified LSL of their intention to apply to set aside the order. They issued the application on 24 January: hence this hearing.

The Principles to be Applied

[21]The CPR state that a Claim Form must be served before 12.00 midnight on the calendar day four months after the date of issue of the Claim Form: CPR 7.5(1). Particulars of Claim must be served on the defendant no later than the latest time for serving a Claim Form and, subject to that, must be served with the Claim Form or within 14 days after service of the Claim Form: CPR 7.4(1) and (2). The Claimant may apply for an extension of time for serving the Claim Form. Such an application must generally be made before the expiry of the four month period set by CPR 7.5(1); it must be supported by evidence and may be made without notice: CPR 7.6 (1), (2) and (4). If an extension of time is granted for service of the Claim Form, that will have the effect of extending the latest time for service of the Particulars of Claim. This case does not concern a separate application for an extension of time for service of the Particulars of Claim. It is therefore sufficient to note in passing that there is no provision equivalent to CPR 7.6(4) allowing applications for extensions of time for service of the Particulars of Claim to be made without notice. Applications for extension of time for serving a Claim Form are therefore an exception to the general rule that a copy of the application notice must be served on each respondent: see CPR 23.4(1) and (2).

[22]The Court will expect the parties to have complied with any relevant pre-action protocol and will take any failure to do so into account when exercising its general powers of management, including its power to grant relief from sanctions under CPR 3.9: see CPR 3.1(4) and (5) and the Pre-Action Conduct Practice Direction at 4.1 and 4.2. The Pre-Action Protocol for Construction & Engineering Disputes applies and the following provisions are of prime relevance to the present case: i) The objectives of the Protocol are(i) encouraging the exchange of early and full information about the prospective legal claim,

(ii) enabling the parties to avoid litigation by agreeing a settlement of the claim before the commencement of proceedings, and

(iii) supporting the efficient management of proceedings where litigation cannot be avoided: see [1.3]; ii) In all cases the costs incurred at the Protocol stage should be proportionate to the complexity of the case and the amount of money which is at stake: see [1.5]; iii) Within 28 days from the date of receipt of the letter of claim, or such other period as the parties may reasonably agree (up to a maximum of 3 months), the defendant shall send a letter of response to the claimant. Within 28 days after receipt by the claimant of that letter, the parties should normally meet to agree the main issues in the case and, if possible, to resolve some or all of them: see [4.3.1], [5.1] and [5.2]; iv) “If by reason of complying with any part of this protocol a claimant’s claim may be time-barred … the claimant may commence proceedings without complying with this Protocol. In such circumstances, a claimant who commences proceedings without complying with all, or any part, of this Protocol must apply to the court on notice for directions as to the timetable and form of procedure to be adopted, at the same time as he requests the court to issue proceedings. The court will consider whether to order a stay of the whole or part of the proceedings pending compliance with this Protocol.”: see [6].

[23]The TCC Court Guide reflects the flexible framework within which litigation in the TCC is habitually conducted: see [1.1.2] of the Guide. It is not a substitute for the CPR and parties and their advisors are expected to familiarise themselves with the CPR and, in particular, to understand the importance of the “overriding objective of the CPR”: see [1.1.4] of the Guide. [2.3.2] of the Guide mirrors [6] of the Protocol, including the mandatory requirement that a claimant who does not comply with the Protocol because his claim may become time-barred must apply for directions as to the timetable and form of procedure to be used. It does not state that such an application must be made on notice, but that does not detract from the requirement in the Protocol that it should be.

[24]Accordingly, while an application for an extension of time for serving the Claim Form may be made withoutnotice pursuant to CPR 7.6, a party issuing proceedings to which the Pre-Action Protocol for Construction & Engineering Disputes applies without complying with the Protocol because his claim may become time barred is obliged by [6] of the Protocol to apply to the Court on notice for directions as to the timetable and form of procedure to be adopted. There are (at least) two obvious rationales for this separate requirement. First, an application for directions on notice enables the Court to review the position in the light of any relevant submissions made by each affected party. This promotes the overriding objective of the CPR by providing the Court with full information on which to make its case management decision and ensures a level playing field from the outset. Second, if the order is made without notice, there is always the risk that one or more affected parties will apply to set the order aside as has happened in this case. The requirement that the initial order for directions is made on notice thus removes the risk of further costly and time-consuming satellite litigation.

[25]The amendments to the CPR that heralded a new and more robust approach to case management are, or should be, well known to any lawyer undertaking litigation since their introduction. From an early stage, the Courts have endorsed the adoption of the more robust approach by reference to the addition of CPR 1.1(2)(f) and, where appropriate, to the amendment of CPR 3.9; and they have done so specifically in relation to extensions of time for the service of a Claim Form: see Venulum Property Investments v Space Architecture & Others

[2013] EWHC 1242 (TCC)

at [54]. The approach reflects the view expressed in [6.5] of the Jackson Report and endorsed by the Court of Appeal even before the amendments to the CPR were introduced in Fred Perry v Brands Plaza Trading

[2012] EWCA Civ 224

“… courts at all levels have become too tolerant of delays and non-compliance with orders. In so doing they have lost sight of the damage which the culture of delay and non-compliance is inflicting on the civil justice system. The balance therefore needs to be redressed.”

[26]Even under the earlier, more tolerant, regime there was clear authority on how the Court should exercise its undoubted discretion where parties issue proceedings late. In Hashtroodi v Hancock

[2004] 1 WLR 3206

the Court of Appeal declined to provide a check-list of factors that would determine whether or not an extension of time should be granted; but, at [19] it explained that:

“If there is a very good reason for the failure to serve the claim form within the specified period, then an extension of time will usually be granted. Thus, where the court has been unable to serve the claim form or the claimant has taken all reasonable steps to serve the claim form, but has been unable to do so … the court will have no difficulty in deciding that there is a very good reason for the failure to serve. The weaker the reason the more likely the court will be to refuse to grant the extension.”

[27]At [34] the Court gave a clear warning:

“It has often been said that a solicitor who leaves the issue of a claim form almost until the expiry of the limitation period, and then leaves service of the claim form until the expiry of the period of service is imminent courts disaster.”

[28]In Hoddinott v Persimmon Homes (Wessex) Ltd

[2008] 1 WLR 806

the Court of Appeal gave a warning that was equally unambiguous at [50]:

“Thus if a claimant applies for and obtains an extension of time for service of the claim form without giving notice to the defendant, he does so at his peril. He should know that an order obtained in such circumstances may be set aside. He can take no comfort from the fact that the court has made the order. He cannot be heard subsequently to say that it was the court’s fault that the order was made.”

[29]In Hashtroodi’s case at [18] the Court of Appeal cited with approval a passage from Zuckerman’s Civil Procedure where the author pointed out that “whether the limitation period has expired is also of considerable importance. If an extension is sought beyond four months after the expiry of the limitation period, the claimant is effectively asking the court to disturb a defendant who is by now entitled to assume that his rights can no longer be disputed.” Hoddinott also considered the principles to be applied where questions of limitation may arise. At [52] the Court said:

“Where there is doubt as to whether a claim has become time-barred since the date on which the claim form was issued, it is not appropriate to seek to resolve the issue on an application to extend the time for service or an application to set aside an extension of time for service. In such a case, the approach of the court should be to regard the fact that an extension of time might “disturb a defendant who is by now entitled to assume that his rights can no longer be disputed” as a matter of “considerable importance” when deciding whether or not to grant an extension of time for service: see Hashtroodi’s case, para. 18.”

[30]The reasons underpinning the Court’s approach where limitation questions may arise were developed in an illuminating judgment by Rix LJ in Aktas v Adepta

[2011] QB 894

. At [91] he said:

“The reason why failure to serve in time has always been dealt with strictly (even if CPR r 7.6(3) represents a still further tightening of the rules where a retrospective request for an extension is made out of time) is in my judgment bound up with the fact that in England, unlike (all or most) civil law jurisdictions, proceedings are commenced when issued and not when served. However, it is not until service that a defendant has been given proper notice of the proceedings in question. Therefore, the additional time between issue and service is, in a way, an extension of the limitation period. A claimant can issue proceedings on the last day of the limitation period and can still, whatever risks he takes in doing so, enjoy a further four-month period until service, and his proceedings will still be in time. In such a system, it is important therefore that the courts strictly regulate the period granted for service. If it were otherwise, the statutory limitation period could be made elastic at the whim or sloppiness of the claimant or his solicitors. For the same reason, the argument that if late service were not permitted, the claimant would lose his claim, because it would become time-barred, becomes a barren excuse. But even where the claimant is well within the limitation period despite his delay in serving, there is a clear public interest in the rules and the courts curtailing the efficacy of a claim form which, because it has not been served, is not very different from an unposted letter. Therefore, the strictness with which the time for service is supervised has entirely valid public interest underpinnings which are quite separate from the doctrine of abuse of process. It is sufficient for the rules to provide for service within a specified time and for the courts to require claimants to adhere strictly to that time limit or else timeously provide a good reason for some dispensation. There is no need for that procedure to be muddled up with the different doctrine of abuse of process.”

[31]If there had been any residual doubt about the approach that will now be adopted when considering applications for extensions of time, it should have been removed by the decision of the Court of Appeal in Mitchell v News Group Newspapers Ltd

[2013] EWCA Civ 1537

. At [40-42] the Court said: “40 We hope that it may be useful to give some guidance as to how the new approach should be applied in practice. It will usually be appropriate to start by considering the nature of the non-compliance with the relevant rule, practice direction or court order. If this can properly be regarded as trivial, the court will usually grant relief provided that an application is made promptly. The principle “ de minimis non curat lex ” (the law is not concerned with trivial things) applies here as it applies in most areas of the law. Thus, the court will usually grant relief if there has been no more than an insignificant failure to comply with an

[32]In addition to these statements of principle, there are very many cases illustrating factual circumstances in which the Court either has or has not exercised its discretion in favour of extending the period for service of proceedings. Although such cases are primarily illustrative, the Court’s wish to achieve consistency in its approach to case management means that they should be taken by practitioners as indicative of the approach that the Court is likely to take in the future. That being so, the approach of the Court of Appeal to the facts of Leeson v Marsden and another (reported sub nom. Collier v Williams

[2006] 1 WLR 1945

) is instructive. It was a clinical negligence claim where the Claimant alleged a negligent failure to diagnose an epidural abscess in late 2000 and brought proceedings against a general practitioner and an NHS Trust. Letters of Claim were sent in August 2002. The Trust did not reply for a year and the general practitioner did not reply at all. The Claim Form was issued on 24 November 2003. In February 2004, the Claimant’s solicitors asked the Defendants to agree to a six months extension of time for service of the proceedings. The Trust agreed to extend time by three months. The doctor’s solicitor agreed to an extension of time for the service of the particular of claim, medical report and schedule of loss and damage but did not refer to or agree an extension for service of the Claim Form.

[33]The further facts as set out by the Court of Appeal were:

“108 On 9 March 2004, Ms Leeson applied without notice for an extension of time for service of the claim form until 20 September. The application notice requested that the court deal with the matter without a hearing. The grounds relied on in support of the application were: “An extension of time is required to enable the second defendant to provide a protocol letter of response to the claimant's letter of claim. Thereafter, some time will be required in order to allow the claimant to finalise particulars of claim in light of both defendants' response to the clinical negligence protocol.” 109 A further extension of time of three months was agreed by the trust by their letter to the claimant's solicitors dated 16 March. They added: “If you wish to obtain the extension ex parte and wish us to sign a consent order, please let us have a draft shortly.” 110 On 22 March (two days before the end of the four-month period from the date of the issue of the claim form), the claimant's solicitor telephoned the court to enquire about the progress of her application. The court informed the solicitor that the application had been given the wrong case number. The application was sent again to the court with the words in manuscript “limitation (service) expires on Wednesday!” 111 On the same day, the claimant's solicitor dictated letters to the solicitors of both defendants. They were not, however, placed in the DX or post until the following day. They would not, therefore, have been deemed to have been served until 25 March, i e one day out of time: see CPR r 6.7(1) . Nor had the claimant's solicitor been notified that the defendants' solicitors were authorised to accept service of the claim form.”

[34]The Court of Appeal held that the District Judge who granted an extension of time in these circumstances “plainly reached the wrong conclusion.” It did so in the following trenchant terms:

“128 In our judgment, there was no good reason for the failure by the claimant's solicitors to serve by 24 March. The witness statement by the solicitor who was dealing with the case on behalf of the claimant, makes clear that she knew that the Claim Form had to be served by 24 March. At para 6, she gave the reason why she was applying for an extension of time. It was because she had received no substantive response from the first defendant to the clinical negligence protocol letter of claim. She said: “This is a serious and potentially substantially valuable claim for the claimant and I do not believe that it is in her interests nor cost effective to serve proceedings and Particulars of Claim now until we have a substantive response from the first defendant as to what issues are still likely to remain between the parties.” 129 In our judgment, the failure of the first defendant to respond to the letter of claim was no reason at all for not serving the Claim Form. It may have been a sufficient reason for seeking an extension of time for service of the Particulars of Claim, although even that is questionable. But there was no obstacle to serving the Claim Form. It is not suggested that the claimant's solicitor did not know where to effect service. In not serving the document, the claimant's solicitor made a serious error of judgment. 130 Like the judge, we regret that we cannot share the district judge's assessment of the conduct of the claimant's solicitor. We do not consider that she acted reasonably and quickly to apply for the extension of time. By 9 March, there remained only 15 days of the four months period and this was a case where the cause of action had become statute-barred in December 2003. Even if there were difficulties in effecting service, the solicitor left matters until very late before she made a move. And when she received the order of 23 March refusing to grant an extension of time for service of the Claim Form, she could and should have taken immediate steps to serve the document so as to ensure that it was served by 24 March. She failed to send the document by first class post on 23 March and failed in any event to obtain notification from the defendants' solicitors that they were authorised to accept service.”

[35]In other words, neither the fact that the provisions of the pre-action protocol had not yet been complied with nor the prospect that serving proceedings might lead to an increase in costs because of that non-compliance was a good reason for failing to serve the Claim Form. While all cases are dependant upon their precise facts, the message is clear.

Should the Order of Edwards-Stuart J be Set Aside?

[36]Faced with this barrage of authority, Mr Leabeater for Lincolnshire tried to sustain the order extending time; and he did so with tenacity and skill. He submitted that there is a tension between two separate principles, namely the need to serve proceedings promptly (particularly where limitation issues are in play) on the one hand and the requirements of the Protocol for Construction & Engineering Disputes on the other. Pointing out, correctly, that there is no other Protocol that includes a provision in (or even approaching) the same terms as [6] of the Protocol for Construction & Engineering Disputes, he submitted that the Protocol and the TCC Guide attach particular importance to giving time for compliance with its terms, with a view to saving costs in the long term. He argued that the authorities to which I have referred above are not directly in point because none was subject to the Protocol; and he relied upon the decision of Ramsey J in Charles Church Developments Ltd v Stent Foundations Ltd & Peter Dann Ltd

[2007] EWHC 855 (TCC)

as showing the paramount importance of complying with the protocol in TCC cases.

[37]In Charles Church the Claimant took no steps to comply with the Protocol. The claim related to three incidents, the earliest of which occurred in August 2000. The Claimant issued proceedings on 14 February 2006 and served the Claim Form on 8 June 2006. A CMC was held on 31 October 2006 at which directions were given leading to a stay of proceedings from 13 April to 25 May 2007 for a mediation to take place. The first Defendant then applied for its costs of the claim up to 13 April 2007 because the Claimant had failed to comply with the pre-action protocol. Ramsey J held that the first Defendant was “entitled to recover costs to reflect the increased work carried out because of the exchange of information taking place, not in the lower-cost atmosphere of pre-action protocol procedure, but in the higher-cost of court proceedings.”: see [41]. En route to that decision he said, at [22-23]:

“22 I consider that where, as appears to be the case here, active consideration was being given by CCD, and obviously had been given by February 2006, in relation to a claim against Stent, the TCC pre-action protocol could and should have been commenced prior to any limitation date. While paragraph 6 of the pre-action protocol allows an exception where there are possible limitation dates, it is not there to encourage parties to delay commencement of the TCC pre-action protocol until there are limitation difficulties. Rather, parties should generally commence the pre-action protocol process at an earlier stage. 23 However, whatever the general position, the importance for a party to apply for directions, if proceedings are commenced under paragraph 6 of the TCC pre-action protocol, cannot be over-emphasised. On such an application, the court would usually stay proceedings so that the pre-action protocol could be carried out. In this case, there are no grounds for thinking that there would be a departure from that usual position, and indeed the contrary was not argued.”

[38]I accept that the Protocol shows the importance attached by the Court to compliance with its requirements. I am, however, quite unable to accept the submission that Construction and Engineering Disputes are subject to a special regime or special principles pursuant to which the Court’s wish to ensure compliance with the Protocol is of paramount importance or in any way “trumps” the principles that are generally applicable to applications for extensions of time for the service of proceedings. Neither the Protocol nor the TCC Guide states or implies the existence of such a regime or principles. On the contrary, [6] of the Protocol and [2.3.2] of the TCC Guide complement the normal and well established principles by requiring the Claimant to bring the case before the Court for directions on notice. Such an application ensures that the Court is in the best possible position to assess the significance of the failure to comply with the Protocol before the issuing of proceedings; it can then decide what steps should be taken for the future, whether by imposing an immediate stay for compliant steps to be taken or a later stay (as directed at the CMC in Charles Church) or otherwise, to counteract the failure of pre-action compliance. With both parties before the Court and a full understanding of the facts it is of course possible that the Court will not grant a stay but will extend time limits to enable Protocol steps to be taken within an overall framework of directions. Equally, it may decline to grant any extension at all in an appropriate case.

[39]A Claimant may ask for an extension of time within the on notice application for directions, but it needs to be recognised that an application for an extension under CPR 7.6 and an application on notice for directions pursuant to the Protocol are not the same thing: a Claimant who applies without notice for an extension of time does not thereby comply with its obligations under [6] of the Protocol and (in a case brought in the TCC) [2.3.2] of the TCC Guide. The Court will exercise its discretion in order to further the overriding application when deciding either form of application – the main difference is that an application for directions on notice is likely to provide the Court with further and better material on which to take its decision and has the necessary benefit of bringing both parties before the Court.

[40]I respectfully agree with the observation of Ramsey J that the importance of a party issuing an application for directions on notice in a case to which [6] of the Protocol applies cannot be overemphasised. I would only add that parties should not assume that Ramsey J’s reference to “usually” staying proceedings means that a stay will usually be imposed before service of the claim form or that the time for service of the claim form will usually be extended. The Court will always have regard to the need to progress proceedings consistently with the overriding objective, particularly when any question of limitation may arise.

[41]It is common ground that [6] of the Protocol applied on the issue of proceedings in July 2013. From that moment on, a number of things went wrong. First, Lincolnshire did not apply on notice for directions either at the same time as or after applying for the initial extension of time. No reason has been advanced for this failure. Second, having itself set the period for compliance with the Protocol and service of proceedings by requesting the initial extension to 18 January 2014, Lincolnshire took no effective steps to advance compliance with the Protocol until 11 September 2013, which had the disastrous knock-on effect that the inspection did not happen until 24 October and the letter of claim was not sent until 3 December 2013. Third, having recognised the need to serve proceedings by 18 January 2014 and having been told by Beale & Co that they were authorised to accept service, Lincolnshire did not cause Particulars of Claim to be drafted and did not serve the proceedings in accordance with the order of Akenhead J. Fourth, Lincolnshire issued another application without notice, thereby compounding its failure to seek directions on notice in July.

[42]The only reason for the absence of any steps being taken before mid-September 2013 is that Mr Hanley took some holiday and, when at work, had to cover for other colleagues who did the same. That is no good reason at all. A solicitor undertaking litigation must ensure that it is run properly and efficiently and with the necessary allocation of resources. Mr Hanley should have ensured that all necessary steps were taken promptly, but did nothing. Even after 11 September LSL showed no urgency at all. The period from 11 September to 24 October 2014 is unjustifiable as it is the product of the failure to arrange inspection before term started; and no evidence has been adduced showing any real attempts to persuade the School to allow an inspection earlier, whether during the weeks that passed or even at weekends. No evidence has been adduced to indicate that Lincolnshire’s new expert was pressed to provide his report sooner than 8 November, or that Counsel was instructed to produce the letters of claim with extreme urgency. In the result, by 3 December it was effectively impossible for the necessary steps to be taken, entirely because of the lack of urgency on the part of LSL.

[43]Mr Leabeater submitted that special consideration should be given to Lincolnshire being a local authority and subject to well-publicised constraints on funding. That submission is not supported by any evidence to the effect that LSL could not have acted more promptly for want of resources: Mr Hanley’s evidence about holiday periods falls far short of establishing that it was not reasonably possible for this case to have been prosecuted diligently. Even if such evidence had existed, it should be viewed with extreme circumspection. As I have said, by February 2013 Lincolnshire was in possession of a report which asserted that Mouchel’s design was fundamentally flawed. It is not self-evident that no competent external solicitor could have been identified who would have been prepared to take on such a case on a CFA so as to provide access to the court without adverse cash-flow consequences for Lincolnshire. There is no evidence that any such step was even contemplated.

[44]Against the background of Lincolnshire’s failure to issue an application for directions as required by [6] of the Protocol and [2.3.2] of the TCC Guide, LSL should have served the proceedings on or before 18 January 2014 and the continuing failure to complete steps that should have been completed before the proceedings were issued is no good reason for failing to do so: see Leeson v Marsden. Charles Church is not authority to the contrary: on proper analysis it serves to emphasise the importance of complying promptly with pre-action Protocol requirements and lends no encouragement at all to delay where proceedings have been issued and [6] of the Protocol applies.

[45]I reject the submission that there is a tension between the two principles identified by Mr Leabeater. To my mind, the established principles, the amendments to the CPR that I have identified, and the terms of the Protocol all point in one direction: parties who issue late are obliged to act promptly and effectively and, in the absence of sound reasons (which will seldom if ever include a continuing failure to comply with pre-action protocol requirements) the proceedings should be served within four months or in accordance with any direction from the Court. A claimant who does not do so and (where the Protocol for Construction & Engineering Disputes applies) who does not obtain directions on notice does so at extreme peril.

[46]For these reasons I set aside the order of Edwards-Stuart J and strike out the claim against Mouchel because it has not been validly served within the time of validity of the Claim Form.

order

for example, where there has been a failure of form rather than substance; or where the party has narrowly missed the deadline imposed by the order, but has otherwise fully complied with its terms. We acknowledge that even the question of whether a default is insignificant may give rise to dispute and therefore to contested applications. But that possibility cannot be entirely excluded from any regime which does not impose rigid rules from which no departure, however minor, is permitted. 41 If the non-compliance cannot be characterised as trivial, then the burden is on the defaulting party to persuade the court to grant relief. The court will want to consider why the default occurred. If there is a good reason for it, the court will be likely to decide that relief should be granted. For example, if the reason why a document was not filed with the court was that the party or his solicitor suffered from a debilitating illness or was involved in an accident, then, depending on the circumstances, that may constitute a good reason. Later developments in the course of the litigation process are likely to be a good reason if they show that the period for compliance originally imposed was unreasonable, although the period seemed to be reasonable at the time and could not realistically have been the subject of an appeal. But mere overlooking a deadline, whether on account of overwork or otherwise, is unlikely to be a good reason. We understand that solicitors may be under pressure and have too much work. It may be that this is what occurred in the present case. But that will rarely be a good reason. Solicitors cannot take on too much work and expect to be able to persuade a court that this is a good reason for their failure to meet deadlines. They should either delegate the work to others in their firm or, if they are unable to do this, they should not take on the work at all. This may seem harsh especially at a time when some solicitors are facing serious financial pressures. But the need to comply with rules, practice directions and court orders is essential if litigation is to be conducted in an efficient manner. If departures are tolerated, then the relaxed approach to civil litigation which the Jackson reforms were intended to change will continue. We should add that applications for an extension of time made before time has expired will be looked upon more favourably than applications for relief from sanction made after the event. 42 A similar approach to that which we have just described has been adopted in relation to applications for an extension to the period of validity of a claim form under CPR 7.6 . In HashtroodivHancock

[2004] EWCA Civ 652

[2004] 1 WLR 3206

, this court said that(i) the discretion to extend time should be exercised in accordance with the overriding objective and

(ii) the reason for the failure to serve the claim form in time is highly material. At para 19, the court said: “If there is a very good reason for the failure to serve the Claim Form within the specified period, then an extension of time will usually be granted…. The weaker the reason, the more likely the court will be to refuse to grant the extension.”