Strike out application for abuse of process following Cable v LVI.

Tom Bourne-Arton was recently instructed by the first of three Defendants in an Employers’ Liability personal injury claim at the hearing of the Defendants’ respective applications to strike out the claim as an abuse of process. Although not known, this may well be the first successful application to strike out a claim as an abuse of process since the Court of Appeal’s decision in Cable v Liverpool Victoria Insurance Co Ltd [2020] EWCA Civ 1015.

All three Defendants were successful in their respective applications and the claim against them has been struck out.

Before considering this recent case and the reasoning of the District Judge it is worth reminding everyone about the Court of Appeal’s decision in Cable, and the test set out therein.

Cable was a personal injury claim arising out of a road traffic accident. In the early stages it could not be known the claim was worth more than £25,000 and the Claimant’s duly submitted a CNF pursuant to Stage 1 of the low value RTA Protocol. The Defendant’s insurer then admitted liability. Thereafter, progress of the Claimant’s claim to Stage 2 was slow, and unbeknownst to the Defendant the Claimant obtained a Neurology report, followed by a second Neurology report. Around three years after the CNF was submitted the Claimant would have known his claim was worth more than £25,000. Instead of notifying the Defendant of this the Claimant issued a Part 8 claim form (prior to stage 2 commencing) asking for a stay. At this stage the Claimant’s solicitors knew the claim was not suitable for the RTA Protocol nor Part 8. Two days before the Part 8 stay was due to be lifted, and a year after the claim was stayed, the Claimant applied to lift the stay and transfer the claim to a Part 7 claim. The Defendant then made an application to strike out the claim.

At first instance the District Judge struck out the claim as an abuse of process. The abuse relating to the misuse of the Low Value RTA Protocol and the use of Part 8 rather than Part 7. The District Judge’s decision was upheld on appeal by the Circuit Judge and then overturned by the Court of Appeal.

Coulson LJ gave the leading judgment in the Court of Appeal. During his judgment he identified the three abuses as being:

1. Issuing the Part 8 claim when they should have issued a claim under Part 7.
2. Seeking a stay so as to comply with stage 2 of the RTA Protocol when they knew or ought to have known the RTA Protocol was inapplicable to the claim.
3. Not intending to, nor in fact using, the stay of proceedings for the purposes for which it was sought or granted.

Having considered previous case law Coulson LJ identified the relevant test in such situations as being a two stage test:

“63… First the court has to determine whether the claimant’s conduct was an abuse of process. Secondly, if it was, the court has to exercise its discretion as to whether or not to strike out the claim…It is at that second stage that the usual balance exercise, and in particular considerations of proportionality, becomes relevant.”

Also of relevance are the following parts of Coulson LJ’s judgment:

• In Her Majesty’s Attorney General v Paul Evan John Butler [2000] 1 FLR 759 abuse of process was defined as “a use of the court process for a purpose or in a way which is significantly different from the ordinary and proper use of the court process.” (para. 43)
• “A claim must be clearly shown to be an abuse before it can be struck out...The striking out of a claim is a draconian remedy and one that should be seen as a last resort” (para.45)
• “Even though the original proceedings might have been started under Part 8, and the stay was ordered under Practice Direction 8D, r.8.1(3) was designed to ensure that, in an appropriate case, there could be a transfer to Part 7.” (para 51)
• “Questions of unfairness are relevant to the second part of the test, namely the balancing exercise to be undertaken when considering the proportionate sanction. They are not relevant to whether or not there has been an abuse of process in the first place.” (para 72)

Coulson LJ had no difficulty in accepting that there had been abuses of the Court’s process in Cable. On considering the second stage of the test Coulson LJ found that the only real prejudice to the Defendant had been a delay of one year or more and that striking the claim out was not a proportionate sanction. Instead, he held that the appropriate sanction was a costs order in the Defendant’s favour and a debarring of interest order on special damages.

Turning now to the recent casein which Tom Bourne-Arton received instructions, the District Judge’s judgment included identifying the following:

• Liability remained denied by all three defendants.
• A CNF was sent to the Second Defendant and they subsequently denied liability.
• A CNF was then sent to the First Defendant who also subsequently denied liability.
• A CNF was then intimated to the Third Defendant but before the CNF was formally submitted the Claimant issued Part 8 proceedings, due to limitation about to expire, and requested a stay to allow the Claimant to continue pursuing the matter under the Protocol.
• At that stage both the First and Second Defendants had denied liability.
• The Claimant then submitted a CNF against the Third Defendant who also subsequently denied liability.
• The Second Defendant then made an application to the lift the stay, and this application was granted.
• Following the lift of the stay the Claimant successfully applied to have the stay reinstate and applied to add a Fourth Defendant to proceedings
• During the stay the Claimant served a schedule of loss for over £100,000 with a caveat that it was not possible to accurately plead loss of earnings due to question marks over the medical evidence and causation of the Claimant’s injuries to the accident.

In relation to the first stage of the Cable test the District Judge held:

• It was an abuse of process to commence Part 8 proceedings when two defendants had denied liability. It is inappropriate to have Part 8 proceedings running at the same time as Part 7 proceedings.
• It was an abuse of process to continue in the Protocol when there was clear potential for the case being a high value claim, and in circumstances where two defendants had denied liability.
• The Claimant then “doubled down” (coining a phrase I used in submissions) by making an application to reinstate the stay, which was a sure intention to continue the Part 8 procedure.
• This is an exceptional case.

In relation to the second stage of the Cable test the District Judge held:

• Continuing on Part 8 meant there was no disclosure, no order for disclosure and no order for expert evidence.
• “It was now some 5 years since the date of the accident and  time cannot be set back to make necessary enquiries of the claimant’s injuries and medical evidence.”
• A cost order and/or debarring of interest order, as occurred in Cable was not a fair and proportionate response. The correct response was to strike out in this case.

What lessons can be learned from this recent experience? Tom Bourne-Arton would suggest that successfully applying to strike out a claim as an abuse of process will prove to be difficult, given the draconian nature of the sanction. However, in appropriate circumstances, such as this recent case, where there is real prejudice to the Defendant which cannot be undone by any other type of sanction striking out the claim can be the proportionate sanction to impose. Obviously, each case will turn on its own facts but Tom would suggest that if making such an application the Defendant should be satisfied that the abuse of process is significant and the prejudice caused as a result is so prejudicial that a costs order is not a proportionate sanction to impose. It would also assist if the facts of Cable can be distinguished. For example, in the recent case:

• Liability was still in issue between three Defendants and the Claimant,
• A Fourth Defendant was potentially about to be added,
• There had been no formal disclosure between the parties to consider liability, causation or quantum, and
• The Claimant had obtained medical evidence which the Defendants were unable to contemporaneously check or counter with their own expert evidence.

In summary, strike out applications for abuse of process remain possible post Cable; and the appropriate test has been clarified in Cable such that any decision whether to make such an application should be easier to make than before.

Tom Bourne-Arton is a member of the Farrar’s Building Personal Injury Team.  Please direct any instructions or queries to the Clerking Team.

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