England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(HIS HONOUR JUDGE HEPPEL QC)

		Royal Courts of Justice Strand, London, WC2A 2LL
		5 April 2004

Lord Phillips, MR :

This is the judgment of the court.

1. Before the introduction of Lord Woolf's reforms, the speed with which an action proceeded towards trial was, to a large extent, in the hands of the claimant. This is no longer so. Under the new Civil Procedure Rules ("CPR") the judge controls the progress of proceedings. The CPR include a transitional measure designed to bring under judicial control actions commenced prior to the imposition of the Rules. CPR 51.1 provides:-

"A practice direction shall make provision for the extent to which these Rules shall apply to proceedings issued before 26 April 1999."

PD 51.19 provides:-

"19 Existing proceedings after one year

(1) If any existing proceedings have not come before a judge, at a hearing or on paper, between 26 April 1999 and 25 April 2000, those proceedings shall be stayed.

(2) Any party to those proceedings may apply for the stay to be lifted."

2. This appeal relates to an action subject to an automatic stay under PD 51.19. The action was commenced as long ago as 18 January 1993, by the claimant's mother, as a Next Friend, when the claimant was 13 years of age. The claimant alleges that he has suffered damage as a result of the defendant's negligence in the performance of its duties towards him as his Local Education Authority. He has a serious speech impediment, which has, on the evidence, blighted his life. He contends that, had he received appropriate therapy as a child, this would have enabled him to learn to speak normally, or at least more normally.
3. On 22 September 2003 the claimant applied to lift the automatic stay on his action. On 28 October 2003, in a reserved judgment, HH Judge Heppel QC dismissed his application and, in consequence, dismissed his claim. He now appeals against that judgment with permission given by Ward and Jonathan Parker LJJ on 27 February 2004.

The facts

4. We shall adopt the earlier part of the summary of the material facts of Judge Heppel, correcting some errors which are not significant.
5. The claimant was born on 7 March 1979. In 1984, when he was five, concerns were first expressed about his lack of educational progress and his behaviour, and he was referred to experts; that is to say a psychologist and a speech therapist. Over subsequent years he was entered into and withdrawn from several schools. His education was a matter of running concern between his parents and officers of the defendant authority.
6. In 1989, his parents complained to the ombudsman about the way in which the defendant was approaching the claimant's education. On 27 September 1990, the ombudsman reported that there had been maladministration on the part of the defendant in relation to the exercise of its duty to the claimant in respect of the claimant's educational needs and, in particular, considered that a further report from a Mr Dew, a psychologist, should have been made available in time for a suitable school to be found for the claimant in the autumn term of 1987.
7. Meanwhile, on 18 January 1990, a final statement of educational needs was issued confirming Holly House in Sussex as an appropriate school. Mr Flaxman-Binns attended there for a time. In July 1991, the panel considered that Marshall College would have been better for him, and he was admitted to that establishment in September 1991, but withdrawn by his parents in July 1992.
8. For the next academic year he was taught at home by his mother, attending a comprehensive school on a part-time basis. On 18 January 1993, the writ in these proceedings was issued and on 8 March of that year an acknowledgement of service was filed by the defendant. At that time, X v Bedfordshire County Council and the cases heard with it [1995] 2 AC 633 were progressing through the courts, and it was agreed between the parties that the proceedings in this action be stayed pending the decision in the House of Lords in those cases. The issue in that litigation was whether a child could maintain an action for breach of statutory duty of negligence against a local authority for steps taken or not taken by that authority as the responsible social services authority. The decision in that case was plainly relevant to this litigation and the obligations to the claimant of the defendant as his Local Education Authority.
9. On 29 June 1995, the speeches of the House of Lords in X v Bedfordshire were delivered. Over two years later, on 23 October 1997, the statement claim in this action was served. Unusually it was drafted by leading and junior counsel together. Allegations of negligence were made concerning actions or failures to act on the part of the defendant, its servants or agents between 1984 and 1991. The plea concentrated on the period up to 1988, that is to say during the time that the claimant was going through primary school education.
10. On 30 January 1998, a defence was served, again drafted by leading and junior counsel. It ran to no fewer than 38 paragraphs, and referred to a number of reports compiled in respect of the claimant over the years. Also in January 1998, a request for further and better particulars of the statement of the claim was served. This was a pleading running to some 15 pages and, essentially, asked the claimant to clarify what his case was on who should have done what and when so far as the defendant and its servants or agents were concerned.
11. On 6 May 1998 the Master made an order striking out a paragraph in the statement of claim in which the claimant sought to rely on the favourable determination of the ombudsman, to which we referred earlier. He also gave directions, which included an order that the claimant serve the further and better particulars of his statement of claim, as requested by the defendant, by 22 May 1998.
12. On 16 June the claimant, having attained the age of 18, adopted the action as his own. On 23 July 1998 the claimant's legal aid certificate was withdrawn. An appeal to the Legal Aid authorities against that decision was dismissed on 27 August 1998. The claimant then obtained permission to seek judicial review of the Legal Aid authorities' decision. A number of extensions of time for filing further and better particulars of the statement of claim were granted, but the claimant failed to comply with these, with the consequence that, on 9 November 1998 the action was struck out.
13. The claimant appealed against the strike-out and, on 16 December 1998, Garland J allowed his appeal.
14. After he had given judgment Garland J considered what directions it was appropriate to give. He was told of the claimant's application for judicial review of the decision to withdraw his legal aid. He directed that the action be stayed pending the outcome of the judicial review proceedings.
15. On 19 February 1999 the claimant reached an agreement with the Legal Aid authorities under which he withdrew his application for judicial review on terms that his claim for legal aid would receive fresh consideration. By that time the Court of Appeal had allowed the defendant's appeal in Phelps v Hillingdon London Borough Council [1999] 1 WLR 500 and an appeal to the House of Lords was pending. The claimant was then informed that his application could not be accepted pending the result of the appeal in Phelps.
16. The claimant did not inform the defendant of these developments and took no further action at this stage. On 25 April 2000 the action was automatically stayed pursuant to PD 51.19. The claimant was not aware of this practice direction or of its effect. On 27 July 2000 the House of Lords allowed the claimant's appeal in Phelps. News of this reached the claimant, or at least his mother, in the autumn. He took no steps to obtain legal aid, or otherwise to advance his claim.
17. On 23 January 2001 solicitors for the defendant wrote to the claimant, saying that as nothing had been heard from him since December 1998 they assumed that he had abandoned his action and that an application would be made to have it dismissed. This led the claimant to instruct his present solicitors, Messrs McKinnels of Lincoln. On 25 January Mr Hardy of that firm wrote to the defendant saying that they were seeking public funding and transfer of the documents from the claimant's previous solicitors. On 30 August 2001 public funding was restored, subject to McKinnels lodging contract documents as it was recognised that this was going to be a high costs case. On 20 December the defendant's solicitors were informed that legal aid had been restored, subject to contract, but it was not until 6 November 2002 that Mr Hardy lodged the necessary contract documents with the Legal Services Commission. On 20 February 2003 legal aid was authorised and the defendant's solicitors were informed of this. After further, somewhat desultory, correspondence between the respective solicitors, the claimant's application to lift the stay was issued on 10 September 2003.

Legal principles

18. CPR 3.9 provides:-

"Relief from sanctions

3.9 (1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order the court will consider all the circumstances including-

(a) the interests of the administration of justice;

(b) whether the application for relief has been made promptly;

(c) whether the failure to comply was intentional;

(d) whether there is a good explanation for the failure;

(e) the extent to which the party in default has complied with other rules, practice directions and court orders and any relevant pre-action protocol;

(f) whether the failure to comply was caused by the party or his legal representative;

(g) whether the trial date or the likely date can still be met if relief is granted;

(h) the effect which the failure to comply had on each party;

(i) the effect which the granting of relief would have on each party.

(2) An application for relief must be supported by evidence."

19. In Audergon v La Baguette Ltd [2002] EWCA Civ 1289 this court held that the automatic stay imposed under PD 51.19 fell to be treated as a "sanction imposed for a failure to comply with any rule, practice direction or court order" within the meaning of CPR 3.9. In Woodhouse v Consignia Plc [2002] EWCA Civ 275 Brooke LJ gave guidance as to the manner in which a court should approach the task of applying CPR 3.9 in the context of deciding whether to lift an automatic stay:-

"32. This rule is a good example of the way in which the draftsman of the Civil Procedure Rules has sometimes endeavoured to set out in a codified form the various matters which the court may have to take into account when deciding how to exercise its discretion in a context with which it will be all too familiar. One of the great demerits of the former procedural regimes was that simple rules got barnacled with case-law. Under the new regime the draftsman has sought to dispense with the need for litigants to be familiar with judge-made case-law by drawing into one place the most common of the considerations a court must take into account when deciding whether a litigant should be granted relief from a sanction imposed on him.

33. The circumstances in which a court may be asked to make a decision of this kind are infinitely varied. This is why the rule instructs the court to consider all the circumstances of the particular case, including the nine listed items. On the other hand, the rule would lose much of its praiseworthy purpose of encouraging structured decision-making if courts did not consciously go through the exercise of considering all the items on the list when determining how, on balance, it should exercise its discretion. Provided it does so, and in this way ensures that the risk of omitting any material consideration is minimised, it is most unlikely that an appeal court will interfere with its decision. If it fails to do so, an appeal court may not be able to detect that it has taken all material matters into account, and it may be obliged to exercise its discretion afresh for this reason."

20. We would endorse this guidance, adding only the comment of Mance LJ in Hansom and others v Makin and Wright [2003] EWCA Civ 1801 at paragraph 20:-

"… at the end of the day, the right approach is to stand back and assess the significance and weight of all relevant circumstances overall, rather than to engage in some form of "head-counting" of circumstances."

These transitional cases, where the court has to weigh up the effect of inactivity, are, we would hope, nearing their end. Each case involves consideration of its own particular facts. In each case the court is faced with finding the most just, or least unjust, solution in the light of what is likely to have been an unsatisfactory procedural history. We turn to consider the approach of the judge in the present case.

The judgment

21. The judge was scrupulous in following the approach recommended by Brooke LJ. He dealt at the outset with sub-paragraph (a) of Part 3.9:-

"In my judgment, the interests of the administration of justice is a wider concept than the question of whether a fair trial is possible. Plainly, if a fair trial is not possible, then it is not in the interests of the administration of justice to allow any action to proceed. But the converse is not the case. There may be actions where a fair trial is possible where nonetheless a stay ought not to be lifted. So much is plain from the wording of sub-paragraph (a) itself and the need to consider by virtue of the remainder of the rules sub-paragraphs (b) to (i). Nonetheless, the question of whether a fair trial remains possible is an important consideration, to which I shall return in due course."

22. The judge returned to the question of whether there could be a fair trial towards the end of his judgment. His conclusions were as follows:-

"35. In my judgment, it is not possible at this time to make a finding as to whether such a trial in early 2005 would be fair on the information that is currently available. It may be that the defendant was able to take and did take some witness statements in 1998 to enable the defence to be pleaded. The extent to which live witness evidence might be required is, at present, not sufficiently known. It may be that contemporaneous documents would be at the centre of any trial, but the experts have yet to report. Experts' reports would be at the centre of any trial, but the experts have yet to report. Experts' reports would be required in several different disciplines. In this type of case, and given the overall delay that occurred in this particular case, it would not in my judgment be until preparations for trial were far more advanced than they are now for the question of whether any trial could be fair could be determined."

23. In dealing with sub-paragraph (b) the judge had no difficulty in reaching the conclusion that the application for relief had not been made promptly. As for sub-paragraph (c) he concluded that the failure to take steps to avoid the automatic stay had not been deliberate but that the explanation for it was 'sheer inactivity'. Thus, turning to sub-paragraph (d), he concluded that there was no good explanation for the delay. Sub-paragraph (e) did not arise.
24. The judge devoted a substantial part of his analysis to sub-paragraph (f). He found that the claimant bore substantial personal responsibility for the delay that had occurred. He held that the claimant's conduct had to be viewed against the background of a case in which there had already been very significant delay and where Garland J's decision to allow the claimant's appeal against the striking out of his action had been a marginal one.
25. The judge held that, having got his action re-instated, the onus was on the claimant to 'get on with it'. His failure to bring the case before the court in the 12 months before 25 April 2000 led to the automatic stay. 'It cannot be said that anyone else was to blame'. The judge further held that the claimant was responsible for the period of inertia that followed up to the receipt of the letter of the 23 January 2001 from the defendant's solicitors.
26. Turning to the period between August 2001 and September 2003, the judge accepted that Mr Hardy was at fault in relation to most of this delay. He did not, however, absolve the claimant himself from blame in respect of this period. His conclusions appear in the following passage from his judgment:-

"A lay client who puts his affairs into the hands of a solicitor cannot be expected, for example, to know about crucial dates for limitation purposes, and matters of like nature, but he can in my judgment reasonably be expected to inquire of his solicitors what was happening to his case. Here the claimant was, or should have been, well aware of the potential consequences of delay. After all, his action had been subject to a stay in 1998 and restored on appeal, and was currently stayed as a result of the automatic stay in April 2000 followed by, what I might describe, as a wake up call from the defendant by virtue of its letter sent in January 2001. There is no evidence before the court that Mr Flaxman-Binns was chasing Mr Hardy. In fact, what the claimant was doing through Mr Hardy – and this appears in the latter's witness statement – was pursuing a disability discrimination claim against an employer or potential employer. In other words, Mr Flaxman-Binns was concentrating his effort and that of Mr Hardy's on a different case. The claimant, in my judgment, cannot be regarded as blameless for this period of delay."

27. The period to which these observations related was August 2001 to November 2002, but the judge went on to comment in respect of the 7 months up to the application to lift the stay:

"Again, as to what Mr Flaxman-Binns was doing viz a viz his own solicitor, there is no evidence"

28. Dealing with sub-paragraph (h), the judge held that he could not evaluate the effect that the delay had had on the parties. The issue was very similar to the question of whether there could be a fair trial. As to sub-paragraph (i), the judge simply remarked that being deprived of the opportunity to litigate his claim to a conclusion would be a considerable disappointment to the claimant.

The issues

29. For the claimant, Mr ter Haar QC attacked the judgment on three fronts. First he submitted that the judge's finding that the claimant himself was personally responsible for the delay after December 1998 was unsustainable. Secondly, he submitted that the judge should have found that, to the extent that there was any impediment to a fair trial, this could not be attributed to this period of delay. Finally Mr ter Haar submitted that the judge had taken no account of the fact that his order was likely to result in undesirable satellite litigation, in the form of an action for professional negligence against the claimant's solicitors.
30. For the defendant, Mr Norman submitted that the court should be very slow to interfere with the exercise of discretion on the part of a judge responsible for case management. So far as sub-paragraph (f) was concerned, Mr Norman submitted that the judge had clearly appreciated the distinction between fault on the part of the claimant and fault on the part of his lawyer and could not be criticised for the weight that he gave to each. As for the prospect of a fair trial, it had been for the claimant to show that this had not been damaged by the delay. He had failed to do so. The judge's approach to that issue was not open to criticism. As for the judge's failure to advert to the likelihood of satellite litigation in the form of a claim against the claimant's solicitors, it was rarely appropriate for the judge to fuel further litigation by criticising the lawyers.

Conclusions

Fault on the part of the claimant

31. We do not think that any criticism should attach to the claimant for taking no step to prevent the operation of the automatic stay on 25 April 2000. At this stage he was a litigant in person and could not reasonably have been expected to be aware of the transitional provisions of the CPR. It was, moreover, reasonable to take no action until the decision of the House of Lords in Phelps was known. Had the matter been raised with the court, we have no doubt that this course would have been approved. Thus we think that the judge was wrong to blame the claimant for his failure to 'get on with it' in the period up to the autumn of 2000, when his mother learnt of the decision that the House of Lords had delivered in Phelps.
32. There followed a few months of unexplained delay before the claimant instructed McKinnels in January 2001. This could properly be laid at the door of the claimant.
33. The major period of delay occurred after Mr Hardy had begun to act on behalf of the claimant. The basis upon which the judge found the claimant to blame for delay during this period was that he had done nothing to press Mr Hardy to progress his claim. The judge held that he and Mr Hardy were preoccupied with a disability discrimination claim that the claimant was bringing against a potential employer.
34. When explaining why he had not refused permission to appeal when considering the case on the papers, Ward LJ said that what troubled him was a witness statement from the claimant's mother which explained that he was badgering the claimant's solicitor for his inactivity. Mr ter Haar very properly accepted that we should not have regard to this statement unless we gave him permission to adduce it as additional evidence. He submitted that he did not need this evidence, but asked us to admit it if we did not accept this submission. Mr Norman opposed the admission of this evidence.
35. The evidence adduced before the judge on behalf of the claimant consisted of a lengthy witness statement by Mr Hardy, together with exhibits. Mr Hardy took full responsibility for the delay that occurred after he had been instructed on 23 January 2001. He stated expressly that no blame could attach to the claimant for this delay and that the cause of the delay was entirely his own. In the light of this evidence we think that it is questionable whether it was open to the judge to make the assumption that the claimant was not 'chasing Mr Hardy' and to blame him for that. In her subsequent statement the claimant's mother stated that had she anticipated the need for it she would have provided Mr ter Haar with evidence of her efforts to get the claimant's case 'pushed forward'. We think that she and her son are not to be blamed for not anticipating the need for such evidence. In the circumstances it would be an injustice to prevent the claimant relying upon the additional evidence in order to demonstrate that the judge's assumption was unfounded and we shall have regard to it.
36. Mrs Flaxman-Binns' statement speaks of her efforts between August 2001 and August 2003 to get Mr Hardy to attend to her son's case, including frequent telephone calls and two meetings with his senior partner to complain about his lack of action. We are left in no doubt that the judge was wrong to assume that no efforts were being made by or on behalf of the claimant to chase Mr Hardy during the period of delay for which the latter has accepted full responsibility.

The consequences of the delay

37. We turn to the consequences of the delay that has occurred. The judge considered two separate, but overlapping questions: (1) Would a fair trial be possible? (2) What were the consequences of the delay that had occurred? He held that he was unable to answer either as the position would only become clear if and when the preparations for trial were much further advanced.
38. The definition of a 'fair trial' is by no means easy. It may be said that a trial will not be 'fair' if the evidence that is needed to make a confident resolution of some of the material issues is no longer available, and we suspect that this was the test that the judge had in mind when considering whether a fair trial would be possible.
39. This case raises difficult issues of liability, causation and measure of damage. It was likely to challenge the trial judge, whenever the hearing took place. Lengthy interruptions in preparation for trial were attributable to the fact that, in sequence, two test cases were making their way to the House of Lords. These delays will not have facilitated the task of assessing the evidence. It seems to us that the most material question in the present context is whether the unnecessary delay that has occurred since July 2000, when Phelps was decided by the House of Lords, has prejudiced the defence of the action. While the overall onus lies on the claimant to demonstrate that the stay should be lifted, we would expect the defendant to advance a positive case by addressing appropriate evidence if detriment has indeed been caused by the delay in question. The defendant has not sought to advance such a case. In these circumstances we consider that Mr ter Haar was right to submit that the court should infer that the additional delay that has resulted from inertia on the part of the claimant and his solicitors is unlikely to have caused significant prejudice to the conduct of the defence.

Fresh exercise of discretion

40. The judge made it clear that the fault that he had found on the part of the claimant was a very material factor in his refusal to lift the stay on these proceedings. He observed:-

"There has been delay after delay for one reason or another and often for no good reason. Much as I sympathise with the claimant, I regret that he cannot be absolved from blame. He was given a waning shot in 1998 that he did not heed and a further reminder by way of wake up call in January 2001. "

41. With the assistance of the evidence from the claimant's mother, which was not before the judge, we have differed from his conclusion that the claimant was himself to blame for most of the unnecessary delay that occurred. The major fault lay fairly and squarely on his solicitor and on him alone. In these circumstances we have to exercise a fresh discretion. The fact that the delay was attributable to fault on the part of his solicitor rather than fault on the part of the claimant is a factor which weighs in the claimant's favour – see the comments of Mance LJ in Hansom at paragraph 35. Ultimately the issue is whether the overriding objective of dealing with this case justly calls for us to bring these proceedings to an end, leaving the claimant with a claim against his solicitor, or to permit him to proceed with his claim against the education authority which he contends is responsible for his current unhappy condition. We have found the decision nicely balanced but have ultimately concluded that this action ought to be permitted to proceed.
42. For these reasons we allow this appeal.
Order: Appeal allowed, that the Order of H.H. Judge Heppel QC dated 28^th October 2003 be set aside and in lieu it is ordered:
43. That the automatic stay imposed by Practice Direction 51.19 be lifted.
44. That these proceedings be stayed until the 5^th July 2004 to enable the parties to seek to reach a compromise whether by mediation or otherwise, save that the parties shall be at liberty to obtain a date for a Case Management conference to be held not be fore the 5^th July 2004.
45. That there be no order as to the costs of this application below save that the Claimant's costs of the application below be the subject of a public funding assessment.
46. That the defendants do pay the Claimant's costs of this appeal to summarily assessed in the sum of £6,000.
47. That the sum of £6,000 shall be paid to the Claimant's solicitors within 28 days.
(Order does not form part of the approved judgment)