Raghav Trivedi, an advocate based on the Midlands Circuit, analyses the decision in Brightside Group Limited and Others v RSM UK Audit LLP and Others [2017] EWHC 6 (Comm) in which the High Court dismissed the Defendants’ application for dismissal of the claim under CPR 7.7(3) despite confirming that the Claimants had failed to comply with the terms of the Defendants’ CPR 7.7 notice.

Facts and Submissions

Proceedings were issued on 26 April 2016 but the claim form was not served following issue. The claim related to audit negligence and negligence in due diligence work on the Defendants’ part. The Defendants solicitors gave notice under CPR 7.7 on 27 May 2016 requiring the Claimants to serve the claim form or discontinue by 10 June 2016. The notice made it clear that failure to comply would lead to the Defendants’ solicitors applying to the Court for an order to dismiss the claim under CPR 7.7(3).

On 10 June 2016, a trainee solicitor from the Claimants’ solicitors (“the trainee”) presented herself at the ground floor reception desk of the building in which the Defendants’ solicitors had its offices. She left the claim form with a messenger who signed for it on behalf of the Defendants’ solicitors.

The Defendants’ solicitors applied for dismissal of the claim by an application dated 13 July 2016 pursuant to CPR 7.7(3) on the ground that there had been neither service nor discontinuance by 10 June 2016. The Defendants’ solicitors also applied for a declaration under CPR 11 that the Court had no jurisdiction over the Claimants’ claim because service of the claim form had been invalid.

The Defendants argued that the claim form had not been served on or before 10 June 2016 as required. They stated that the claim form had been deemed served on 14 June 2016 pursuant to CPR 6.14. Alternatively, the Defendants argued that what the trainee did on 10 June 2016 did not amount to delivering the claim form to or leaving it at the relevant place. The Defendants argued that the purpose of CPR 7.7 was to entitle a Defendant, by giving notice, to shorten the validity of a claim form and therefore replace the obligations under CPR 7.5 with an obligation to comply with the notice. The Court’s approach to a failure to comply with the notice should be the same as its approach to a failure to comply with CPR 7.5. Therefore, the Defendants sought dismissal of the claim because the Claimants had served out of time for no good reason.

The Claimants argued that the trainee’s actions amounted to leaving the claim form at the relevant place on 10 June 2016 and that this was sufficient to comply with the notice, notwithstanding CPR 6.14. Alternatively, the Claimants submitted that a CPR 7.7 notice did not supplant CPR 7.5: the purpose of the notice was to enable a Defendant to get valid proceedings moving quickly or to get rid of proceedings that the Claimant did not intend to pursue through early discontinuance. The Claimants therefore submitted that the Court should not dismiss the claim.

Judgment and Reasoning

Baker J dismissed the Defendants’ application. The Judge made it clear that the trainee’s particular actions were not in focus and that what she did complied with CPR 7.5 in that the claim form was delivered to or left at the relevant place (i.e. the Defendants’ solicitors’ address for service) on 10 June 2016.

The question, according to the Judge, was when service took place. That question, according to the Judge, was answered by CPR 6.14. This was not the date on which a Claimant took the required step under CPR 7.5 but the second business day after completion of that step. Referring to the binding authorities of Godwin v Swindon Borough Council [2002] 1 WLR 997 and Anderton v Clwyd County Council (No 2) [2002] 1 WLR 3174, the Judge stated that CPR 6.14 fixed the date upon which service of claim forms within the jurisdiction took place for all purposes of the CPR.

The Judge noted that there were two questions to answer when considering service of a claim form within the jurisdiction, namely (i) what must a Claimant do to effect service and (ii) when does the CPR say that service, in consequence, takes place. The Judge clarified that CPR 7.5 re-defined the temporal validity of a claim form for service within the jurisdiction so that it answered question (i) rather than question (ii) requiring the relevant step (i.e. a method of service) to be taken within four months post issue for service to be valid. However, the Judge stated that CPR 7.7 still had reference to when service occurred (i.e. question (ii)). Therefore, the Judge reasoned that what must happen by the deadline stated in CPR 7.5 was not the same as what must happen by the deadline set by a CPR 7.7 notice.

The Judge went on to consider the Claimants’ submission that compliance with a CPR 7.7 notice was to be tested by reference to whether, by the deadline specified in the notice, the required CPR 7.5 step had been completed. The Judge rejected this submission and the reasoning and conclusions reached in a number of authorities relied upon by the Claimants including Ageas (UK) Ltd v Kwik-Fit (GB) Ltd [2013] EWHC 3261 (QB) and T&L Sugars Ltd v Tate & Lyle Industries [2014] EWHC 1066 (Comm) relating to contractual provisions in respect of service. Contrary to those decisions, the Judge stated that the parties should be able to know that if a provision of the CPR required one to ask when service occurred and CPR 6.14 gave a deemed date of service, this clearly answered the question. However, the validity of service of a claim form was now determined by reference to when the step required under CPR 7.5 was completed.

The Judge found that the Defendants’ notice required the Claim form to be served on 10 June 2016 and therefore required the date of service fixed by CPR 6.14 to be 10 June 2016 at the latest. The step required under CPR 7.5 was completed on that date and therefore service was valid but the deemed date of service was 14 June 2016. On that basis, the Judge found the Claimants to have failed to comply with the notice and that, pursuant to CPR 7.7(3) he was entitled to dismiss the claim or make such other orders as he thought just.

However, the Judge disagreed with the Defendants’ submission that CPR 7.7 shortened the temporal validity of the claim form by service of a notice. The Judge stated that the purpose of CPR 7.7 was to enable Defendants to flush out early whether a claim issued against them was going to be pursued and to get early sight of it. The Judge also stated that the express reference to dismissal only meant that non-compliance with a CPR 7.7 notice carried a discretionary power to dismiss in the appropriate case.

In this case, the Judge stated that he would not dismiss the claim because the Claimants had acted in good faith by delivering the Claim form on 10 June 2016. The Judge stated that the purpose of CPR 7.7 had been satisfied because the Claim form reached the Defendants’ solicitors less than half way through the period of validity of the Claim form, although one or two working days later. Therefore, no prejudice was caused to the Defendants and the application was dismissed with no further grounds for applying under CPR 11. This was because the relevant CPR 7.5 step had been taken and the claim form was valid.

Potential Impact

This decision can be seen as a welcomed clarification and simplification of the rules relating to service of claim forms within the jurisdiction. The Judge defined the roles of CPR 7.5 and CPR 6.14, with the former determining the validity of claim forms and the latter determining when service occurred for all CPR purposes. Bearing in mind the principle of the overriding objective to deal with cases justly and at proportionate cost, it is hoped that this decision will help reduce satellite litigation surrounding issues of service of claim forms, supporting the aim of the Woolf reforms to reduce cost, complexity and delay in litigation. It is also hoped that, as a result of the clarity the judgment has provided, there is a stop to a long list of authorities confusing and complicating the rules of service which should remain simple and provide certainty for parties.

On a specific note, the Judge stated that the issues raised in respect of service were issues upon which there appeared to be no prior authority. This decision therefore provides the first analysis of the function of a CPR 7.7 notice, the approach to a CPR 7.7(3) application and its relationship with CPR 6.14 and CPR 7.5. This should help Defendants who seek to make an application under CPR 7.7(3) and Claimants who face such an application.