England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
The Hon Mr Justice Teare
HQO2X00848

		Royal Courts of Justice Strand, London, WC2A 2LL
		09/10/2007

Sir Anthony Clarke, MR:

This is the judgment of the court.

Introduction

1. On 20 October 2006 Teare J ordered that Aventis Pasteur SA ('APSA') be substituted for Aventis Pasteur MSD Ltd ('APMSD') as the defendant in this action. APSA and APMSD have changed their names to Sanofi Pasteur SA and Sanofi MSD Ltd respectively, but we will continue to refer to them as APSA and APMSD. This is an appeal by APSA against the order for substitution, brought with the permission of the judge.

2. The order was made under section 35 of the Limitation Act 1980 ('the 1980 Act'). As formulated on behalf of APSA, the appeal raises two questions as follows:

   i) whether section 35 is applicable where the time limit which has expired is the ten year final cut-off date for enforcing rights conferred pursuant to the European Product Liability Directive of 25 July 1985, 85/374/EEC, ('the Directive'); and

   ii) if so, whether on the proper construction of section 35, there is power to order substitution in circumstances where, although the name of the defendant was given in mistake when the action was begun, the claimant discovered his mistake before the limitation period had expired and elected at that time to pursue claims against the original defendant.

3. The first issue was not argued before the judge because it was accepted that he was bound by the decision of this court in Horne-Roberts v SmithKline Beecham Plc [2001] EWCA Civ 2006, [2002] 1 WLR 1662 ('Horne-Roberts') to hold that section 35 is applicable to the ten year cut-off period. Mr Leggatt submits that we should not follow Horne-Roberts in the light of the decision of the European Court of Justice ('the ECJ') in the present case. The judge decided the second issue in favour of the claimant. Mr Leggatt submits that he was wrong to do so.

   The claim

4. The claimant was born on 2 November 1991. So he is now 15 years of age. On 6 October and on 3 November 1992 (when he was one), he was vaccinated with two doses of HiB vaccine. Thereafter he suffered severe brain damage. It is his case that the brain damage was caused by the vaccine. On 1 November 2000, the claimant commenced an action against APMSD. He did so because his solicitors believed that APMSD was the manufacturer or producer of the vaccine. It is accepted by APSA that that was a genuine mistake. The application to substitute APSA for APMSD was made because it is now common ground that APSA was the manufacturer. It was made on 10 March 2003 after the ten year period had expired.

5. By section 2(1) of the Consumer Protection Act 1987 ('the CPA'), where any damage is caused wholly or partly by a defect in a product, every person to whom subsection (2) applies is liable for the damage. It is strict liability. The questions which arise in any action are essentially two, namely whether the damage was caused by a defect in a product (here the HiB vaccine) and whether the defendant is a person to whom subsection (2) applies.

6. Subsections (2) and (3) provide:

   "(2) This subsection applies to -

   (a) the producer of the product;

   (b) any person who, by putting his name on a product or using a trade mark or other distinguishing mark in relation to the product, has held himself out to be the producer of the product;

   (c) any person who has imported the product into a member State from a place outside the member States in order, in the course of any business of his, to supply it to another.

   (3) Subject as aforesaid, where any damage is caused wholly or partly by a defect in a product, any person who supplied the product (whether to the person who suffered the damage, to the producer of any product in which the product in question is comprised or to any other person) shall be liable for the damage if –

   (a) the person who suffered the damage requests the supplier to identify one or more of the persons (whether still in existence or not) to whom subsection (2) above applies in relation to the product;

   (b) that request is made within a reasonable period after the damage occurs and at a time when it is not reasonably practicable for the person making the request to identify all those persons ; and

   (c) the supplier fails, within a reasonable time after receiving the request, either to comply with the request or to identify the person who supplied the product to him."

7. Although its preamble does not expressly say so, it is common ground that the CPA was enacted to give effect to the Directive. It is also common ground that the CPA must be construed so as to give effect to the Directive. The CPA is not in identical terms to the Directive. We set out the relevant terms of the Directive because the ECJ was of course considering the Directive and not the CPA. It provides, as far as relevant:

   "Article 1

   The producer shall be liable for damage caused by a defect in his product.

   Article 3

   1. 'Producer' means the manufacturer of a finished product, the producer of any raw material or the manufacturer of a component part and any person who, by putting his name, trade mark or other distinguishing feature on the product presents himself as its producer.

   2. Without prejudice to the liability of the producer, any person who imports into the Community a product for sale, hire, leasing or any form of distribution in the course of his business shall be deemed to be a producer within the meaning of this Directive and shall be responsible as a producer.

   3. Where the producer of the product cannot be identified, each supplier of the product shall be treated as its producer unless he informs the injured person, within a reasonable time, of the identity of the producer or of the person who supplied him with the product. The same shall apply, in the case of an imported product, if this product does not indicate the identity of the importer referred to in paragraph 2, even if the name of the producer is indicated."

8. As appears from the Directive and the Act, the person liable is not limited to the manufacturer of the product. The scheme of the Directive is however to define producer in terms that are wide enough to include producers of raw materials and importers and to provide that in some circumstances a supplier is to be treated as a producer. In this way it casts the net wide in order to provide redress to the consumer.

9. We understand that the case that the claimant now wishes to advance is that APSA was the manufacturer and thus the (or a) producer within the meaning of the Directive and that he is content to replace APMSD with APSA as the defendant to the action.

10. We should perhaps note that article 4 provides that it is for the injured person to prove the damage, the defect and the causal relationship between the defect and the damage, whereas article 7 provides that the producer shall not be liable if he proves, among other things, that he did not put the product into circulation. Those provisions are reflected in the CPA.

    Limitation

11. The Directive contains express provisions relating to limitation periods. They reflect the tenth and eleventh recitals to the Directive, which state (among other things) that a uniform period of limitation for the bringing of action for compensation is in the interests both of the injured person and of the producer and that "liability should expire after a reasonable period of time, without prejudice to claims pending at law." Article 10 provides for a three year limitation period. It also provides that the laws of Member States regulating suspension or interruption of the limitation period shall not be affected by the Directive. Article 11 provides:

    "Article 11

    Member States shall provide in their legislation that the rights conferred upon the injured person pursuant to this Directive shall be extinguished upon the expiry of a period of 10 years from the date on which the producer put into circulation the actual product which caused the damage, unless the injured person has in the meantime instituted proceedings against the producer."

    It should be noted that the effect of article 11 is to extinguish the right after ten years and not merely to bar the claim.

12. By section 6 and schedule I of the CPA a new section 11A was added to the 1980 Act, which reflects articles 10 and 11 of the Directive. In particular, article 11 is reflected in section 11A(3). This has the effect of applying section 35 of the 1980 Act to a claim under the CPA because section 35 applies "for the purposes of this Act", which now includes section 11A.

13. Section 35(3) of the 1980 Act provides (so far as material) as follows:

    "(3) Except as provided by section 33 of this Act or by rules of court, neither the High Court nor any county court shall allow a new claim … to be made in the course of any action after the expiry of any time limit under this Act which would affect a new action to enforce that claim."

    but this is subject to subsections (4) to (6), which provide, so far as relevant, as follows:

    "(4) Rules of court may provide for allowing a new claim to which subsection (3) applies to be made as there mentioned, but only if the conditions specified in subsection (5) below are satisfied, and subject to any further restrictions the rules may impose.

    (5) The conditions referred to in subsection (4) above are the following -

    (a) …

    (b) in the case of a claim involving a new party, if the addition or substitution of the new party is necessary for the determination of the original action.

    (6) The addition or substitution of a new party shall not be regarded for the purposes of subsection (5)(b) above as necessary for the determination of the original action unless either -

    (a) the new party is substituted for a party whose name was given in any claim made in the original action in mistake for the new party's name; or

    (b) any claim already made in the original action cannot be maintained by or against an existing party unless the new party is joined or substituted as plaintiff or defendant in that action."

    It is common ground that this is a case to which subsection (3) applies. Rules of court were made and are now to be found in CPR 19.

    The judgment

14. The judge noted in [5] that in Horne-Roberts this court has held that the court had power under section 35 of the 1980 Act to substitute one party for another after the expiry of the 10 year time limit provided by the CPA. As we said earlier, APSA did not contend before the judge that section 35 should have been construed differently, or even disapplied, because of the decision of the ECJ. Two issues were argued before the judge. The first was the second issue identified above, namely whether on the true construction of section 35 there is power to order substitution where, although there had been a mistake when the proceedings were issued, the claimant or his advisers learned of the mistake before the expiry of the ten year period, but failed to make an application to substitute the correct party until after that period had expired. The second issue argued before the judge was whether, if there is power to make such an order under section 35, he should not do so in the exercise of his discretion.

15. The judge decided both issues in favour of the claimant. APSA appeals against the judge's decision on the first issue, which is a question of jurisdiction and depends upon the true construction of section 35, but it does not challenge his decision on discretion. That is, APSA now concedes that, if the judge had power to make an order for substitution under section 35, he was entitled to make the order in the exercise of his discretion.

    The relevant circumstances

16. It is convenient to say a word about the relevant facts and circumstances before considering the two issues which arise in this appeal. We can take them largely from the judgment. As a result of enquiries made in 1995 of the GP who administered the vaccine and of another firm of solicitors acting in the MMR litigation the claimant's solicitors believed that APMSD was the manufacturer of the vaccine. However, as the judge observed in [7], before commencing the action in November 2000 the solicitors had not examined the product literature or written to APMSD asking whether they were the manufacturers. Moreover, no pre-action protocol was followed.

17. It was not until 1 August 2001 that the claimant was able to serve particulars of his claim with a supporting medical report. It appears that it was not until then that he was able to find a doctor to support his case. The particulars of claim alleged that the vaccine administered to him on 3 November 1992 was manufactured and/or produced by APMSD, being of a type or brand of vaccine known to be manufactured by and registered in the UK by or to APMSD, which is an English company. The particulars asserted that APMSD was liable under the CPA. However, they also alleged in the alternative that the injury and damage sustained by the claimant were caused by the negligence and/or breach of statutory duty of APMSD in the research, manufacture, testing and/or development of the vaccine and/or in the processing, compilation and presentation of the data obtained thereby and/or in its submissions to the relevant licensing authorities and/or in the sale, supply and marketing and post product licensing surveillance and evaluation of the vaccine and/or by the negligent misstatement made by APMSD in the marketing, advertising and other promotion for the sale and prescription of the vaccine.

18. On 29 November 2001 APMSD served a defence stating that it was the distributor of the vaccine and not the manufacturer. On 10 January 2002 the claimant's solicitors sought confirmation from APMSD as to whether APMSD was the manufacturer. As the judge put it in [9], their letter was said to be a "notice pursuant to section 2(3) of the [CPA]" but it was not in form a request for the identity of the manufacturer pursuant to that subsection. However, after receiving a chasing letter dated 28 March 2002, APMSD's solicitors replied on 17 April 2002 saying that the manufacturer of the vaccine, as stated on the licence application made in November 1991, was Pasteur Mérieux Sérums et Vaccins of France. This was a former name of APSA, although the solicitors did not point that out in their reply.

19. On 2 May 2002 the claimant served amended particulars of claim, which included the following allegations: that APMSD is a pharmaceutical company that at all material times was engaged in, or held itself out as engaged in, the production, importation and supply of vaccines, including HiB; that the vaccine was produced or imported by APMSD, or that APMSD held itself out as being the producer of the vaccine; alternatively, that APMSD was responsible for any defect in the vaccine, pursuant to section 2(3) of the CPA inasmuch as it was a supplier of the vaccine within the meaning of section 2(3), was requested by solicitors acting for the claimant to provide the identity of the producer of the vaccine, but failed within a reasonable period to comply with that request. Thus, as the judge put it in [11], in essence the claimant continued to allege that APMSD was the producer of the vaccine but added alternative claims against APMSD in the event that APMSD was not the producer. APMSD denied these allegations in an amended defence served on 19 July but they were repeated in a reply to the amended defence dated 6 September 2002.

20. In [12] to [16] the judge set out the claimant's attempts to sue APSA. On 18 June 2002 his solicitors asked APMSD's solicitors whether they were instructed on behalf of APSA and whether APSA would consent to being joined as a second defendant. On 3 and 12 July the solicitors replied that they were instructed to act for APSA but that they would not agree to joinder. On 24 July they said that they had no instructions to accept service. It may be that the judge took the view that this was not a very helpful or constructive attitude on their part.

21. On 18 August 2002 the claimant issued an application to join APSA as second defendant. In support of that application the claimant's solicitors said that they did not consider that it was "appropriate to substitute APSA as Defendants in place of APMSD". The judge observed in [13] that that was understandable in circumstances where the claimant maintained that APMSD was liable notwithstanding that it might not have been the actual manufacturer of the vaccine. The joinder application was served on APSA in France on 18 September 2002 and the hearing of the application took place before Master Ungley on 4 October 2002. APSA consented to being joined but on terms that the joinder could be set aside if their researches as to the date on which the vaccine was put into circulation suggested that it was prior to 4 October 1992, ten years earlier.

22. On 16 October a second action was commenced against APSA. APSA issued an application to strike out that action but the judge was not concerned with it and nor are we. Once it became clear that the joinder of APSA in the first action had to be set aside because APSA had an arguable limitation defence, this application was issued on 10 March 2003 and on the next day joinder of APSA was set aside. APSA's researches had suggested that the vaccine had been put into circulation before 4 October 1992.

23. The judge's view of the relevant facts and circumstances can be seen from the reasons he gave for his conclusion that he should exercise his discretion in favour of the claimant. He said in [33] that in doing so he had had regard both to the overriding objective and to the personal scope of the Directive as established by articles 1 and 3, to which the ECJ had had regard (as appears below). He said in [34]:

    34. APSA is, on its own admission, the producer or manufacturer of the vaccine. It follows that a decision permitting APSA to be substituted pays due regard to the personal scope of the Directive. Such substitution enables the claim against the producer or manufacturer of the vaccine to be dealt with justly. That is because:

    i) It is likely that APSA was made aware of the Claimant's intention to sue the producer or manufacturer of the vaccine within the 10 year limitation period shortly after proceedings were served on APMSD. That inference can be drawn from the circumstance that APSA and APMSD are and were related companies and that the commencement of an action by the Claimant alleging a defect in vaccine manufactured by APSA would be a matter of such importance to the group of companies that it is likely that APMSD would report the action to APSA. There was no evidence that APSA only learnt of the claim after the expiry of the 10 year period and the submission that APSA knew of the claim before the expiry of that period was not contradicted by Counsel for APSA.

    ii) It is likely that APSA considered that the Claimant, once the mistake had been pointed out, would take steps to substitute APSA for APMSD. That is because substitution is one of the ways in which the Claimant's mistake could be remedied. APSA certainly knew in June 2002 that the Claimant intended to remedy the mistake in another way, namely, by joining APMSD as a second defendant.

    iii) Whilst the original mistake can be said to have been the result of the failure of the Claimant's solicitors to follow any form of pre-action protocol I do not attach, in the context of this application, much weight to that. Whilst the failure of the solicitors to write to APMSD before commencing the action is a serious failure mistakes which give rise to an application to substitute will often be the result of a failure of some sort and the jurisdiction exists to remedy such mistakes. In this regard I follow the approach of Jacob LJ in Morgan Est at paragraphs 40 and 47 rather than the obiter dicta of Smith LJ in Martin at paragraph 17 since the former case concerned an application for substitution and the latter case did not.

    iv) Whilst an application to substitute could have been made after April 2002 and before the 10 year limitation expired it was not made then because the Claimant wished to sue both APSA and APMSD. That decision was reasonable. Indeed it was not criticised by Counsel for APSA.

    v) The Claimant's solicitors, on being informed of their mistake, did not determine to proceed against APMSD alone. They decided to join APSA to the proceedings against APMSD.

    vi) Whilst the Claimant's solicitors must have known in the period April to November 2002 that there was a serious risk that the 10 year period might expire some time before November 2002 and it can be said that they did not act with urgency in that period yet it can also be said that one of the reasons why the application to join was not heard until 4 October 2002 was because of APSA's refusal to agree to joinder and to APSA's refusal to instruct its solicitors to accept service.

    vii) Moreover, the delay in making the application to substitute until March 2003 has caused no prejudice to APSA. Nor is any alleged, save that, if the application is allowed, APSA will be deprived of a limitation defence. That prejudice flows from the initial mistake, even though it might have been avoided had the Claimant acted differently. It is too narrow a view of the facts to regard that prejudice as having been caused by the reasonable decisions of the Claimant's solicitors to continue to sue APMSD and to join APSA taken in the wake of their mistake being revealed to them, rather than by their mistake. For these reasons I consider it appropriate to follow the approach of Jacob LJ in Morgan Est at paragraph 42 (although I recognise that he was not dealing with a case where the claimant was informed of his mistake and yet continued to proceed against the original defendant.)

    viii) Although this substitution is being made 4 years after the 10 year limitation period expired the application was made in March 2003 once it was known that APSA would challenge the joinder order. The delay thereafter has been caused by the excursion to the ECJ."

24. As we indicated earlier, APSA does not challenge the exercise of the judge's discretion. However, we should note that there is a recent decision of this court in Adelson v Associated Newspapers Limited [2007] EWCA Civ 701 ('Adelson'), in which the court, comprising Lord Phillips CJ and Jacob and Moses LJJ, held that the obiter statement of Jacob LJ in Morgan Est v Hanson Concrete [2005] EWCA Civ 134, [2005] 1 WLR 2557 that the 1980 Act had the obvious intention of liberalising the position from that under the Limitation Act 1939 was wrong. The court adhered to the principle set out in cases such as The Al Tawwab [1991] 1 Lloyd's Rep 201 under the RSC. In that case the ship Sardinia Sulcis was damaged by the Al Tawwab and the relevant test became known as the Sardinia Sulcis test. In short, the mistake must be as to the name of the party in question and not as to the identity of that party.

25. In the light of the decision of this court in the Adelson case, the statement in [34 iii)] of the judge's judgment relying upon the dicta Jacob LJ cannot stand. Despite that, it is not suggested that the judged erred in the exercise of his discretion if he had a discretion to exercise, which is the question for decision.

    The mistake

26. It is accepted on behalf of APSA that, through his solicitors, the claimant made a mistake when he issued the proceedings against APMSD. It is also accepted that that mistake, while not a mere misnomer, was a mistake as to the name (or nomenclature) of the party intended to be sued and not a mistake as to its identity. That is because it was intended to sue the manufacturer of the particular vaccine. While, as the court observed at [29] of Adelson, the distinction is somewhat elusive, it is now understood: see eg The Al Tawwab per Lloyd LJ at page 207 and Horne-Roberts per Keene LJ at [40].

27. This court has already held that a mistake almost identical to that made in the instant case was a mistake of name and not a mistake of identity and thus the kind of mistake contemplated by section 35(6) of the 1980 Act. In Horne-Roberts the claim was brought under the CPA in respect of injury caused by a defective vaccine. The defendant originally sued was mistakenly thought to be the manufacturer of the vaccine and the only difference between that case and this is that in that case there was no connection between the defendant originally sued and the company whom the claimant wished to substitute on the basis that it was the true manufacturer. The court rejected the proposed defendant's submission that the mistake made by or on behalf of the claimant was not a mistake of the kind contemplated in section 35(6): see per Keene LJ, with whom Hale LJ and Dame Elizabeth Butler-Sloss P agreed, at [29] to [45], especially at [43], where Keene LJ accepted the submission that the claimant satisfied section 35(6) because he always intended to sue the manufacturer of a particular batch of vaccine. Precisely the same is true on the facts of the instant case.

28. Viewed as at the date of the commencement of the proceedings, this was a classic example of the kind of case envisaged by section 35 of the 1980 Act and by CPR 19.5(3). This can be seen by the conclusions expressed by the court in [55] to [57] of Adelson. CPR 19.5(3) makes it a precondition of substituting a party on the ground of mistake that:

    "the new party is to be substituted for a party who was named in the claim form in mistake for the new party."

    The claimant must be able to show that, but for the mistake, which must be a mistake of name or nomenclature, the new party would have been named. The claimant here can show that, if he had not made a mistake and had known that APSA was the manufacturer, he would have sued APSA. In [57] the court observed that almost all the cases involve circumstances in which (i) there was a connection between the party whose name was used in the claim form as the party intended to be sued (or to sue) and (ii) the party intended to be sued, or his agent, was aware of the proceedings and of the mistake so that no injustice was caused by the amendment. On the judge's findings of fact, which are not challenged, that was the case here.

29. We turn to the two issues in the appeal. It is convenient to consider first article 11 of the Directive and the decision of the ECJ.

    Issue 1 – Article 11 of the Directive and the decision of the ECJ

30. In Horne-Roberts this court considered the relationship between the Directive and the 1980 Act in a case which (as we have already observed) is very similar to this on the facts. The claimant mistakenly thought that the original defendant was the manufacturer. The judge, Bell J, had made an order for substitution and the proposed new defendants appealed to this court. The court's attention was drawn both to the relevant statutory provisions and the provisions of the CPR and to the Directive, especially article 11. As in the instant case, there was no appeal against the way in which Bell J exercised his discretion but the defendants argued that, on their true construction, section 35 of the 1980 Act and CPR 19.5 did not permit substitution after the ten year long stop period under the CPR had expired. The argument was essentially that articles 10 and 11 distinguish between the three year time bar on the one hand and the extinguishment of an injured person's rights after a ten year period on the other. Section 35 must therefore be construed so as to give effect to the Directive, including article 11, or at least so as not to undermine or circumvent it: see per Keene LJ at [20] and [21].

31. This court rejected those submissions. Its reasoning can be summarised in this way:

    i) Parliament chose to deal with time limits applicable to actions under the CPA by amending the 1980 Act: see [22].

    ii) Where Parliament intended to exclude the ten year long stop period from the provisions of the 1980 Act, it did so expressly, as for example by section 32(4A), and the amendments to sections 28, 32 and 33: see [25].

    iii) When Parliament introduced section 11A(3) and the ten year long stop it simultaneously and expressly referred to it as a time limit, which is the same wording as appears in section 35(3). It would be strange if those words were given some different meaning in section 35 from that clearly intended in sections 28 and 32: see [34].

    iv) In all the circumstances Parliament must have made a conscious decision not to disapply section 35 to the ten year long stop.

32. The court also expressly considered article 11 and the preamble and Keene LJ noted in [26] that neither is in absolute terms. Thus article 11 provides that the rights will be extinguished on the expiry of the ten year period "unless the injured person has in the meantime instituted proceedings against the producer" and the eleventh recital is qualified by the words "without prejudice to claims pending at law". Keene LJ concludes [26] in this way:

    "It is significant that section 35 of the 1980 Act, unlike sections 28, 32 and 33, only operates where proceedings have already been commenced within the applicable time limit, in other words where a claim is already "pending", and in the case of a claim under the 1987 Act it would have to be a claim "against the producer". The Directive does not explicitly deal with the situation to which section 35 relates, namely where proceedings have been instituted but where there has been a mistake of the kind referred to in that section. I therefore do not accept that to apply section 35 to the 10 year long-stop conflicts with the Directive's terms or aims, especially when it is borne in mind that the court has a discretion under the section as to when it will allow a new party to be substituted."

33. Thus the court in Horne-Roberts was considering the very point that arises in this appeal. Moreover it decided it in clear terms. We are of course bound by that decision and in principle we must follow it. However, Mr Leggatt submits that we are not bound to follow Horne-Roberts because of the decision of the ECJ in this very case.

34. Mr Leggatt relies upon the second exception to the general rule in Young v Bristol Aeroplane Co Ltd [1944] KB 711. That exception is that the court "is bound to refuse to follow a decision of its own which, although not expressly overruled, cannot in its opinion stand with a decision of the House of Lords." Mr Leggatt submits that this exception must now be extended to include rulings of the ECJ. He puts his submission thus. A ruling of the ECJ on a question of interpretation of a Community instrument such as a Directive made at the request of a national court is not only strictly binding on national courts in the case in which the request is made, but is binding on national courts in other cases. Since a ruling of the ECJ on such a question is binding on the House of Lords itself, it follows a fortiori that it must in this court override a previous decision of the Court of Appeal. Such a principle would presumably also apply to a decision of the House of Lords, so that this court would be bound to refuse to follow a decision of the House of Lords if it was inconsistent with a subsequent decision of the ECJ.

35. Assuming such a principle to exist, it could in our judgment only apply if the previous decision of this court (or presumably the House of Lords) were clearly inconsistent with a decision of the ECJ. We will therefore consider the judgment and reasoning of the ECJ in this case before returning briefly to the exception to the doctrine of stare decisis suggested by Mr Leggatt.

    The ECJ decision

36. On 14 November 2003 the High Court, at the request of both parties, referred a number of questions to the ECJ. The ECJ gave its ruling on 9 February 2006. The first question referred to the ECJ concerned the meaning of "put into circulation" in article 11 of the Directive. This question is relevant to the question whether the second action was begun before or after the expiry of the ten year period but was not directly relevant to the issues before the judge and is not relevant to the issues in this appeal.

37. Questions 2 and 3 as set out in [19] of the judgment of the ECJ were in these terms:

    "2. Where proceedings asserting rights conferred on the claimant pursuant to the Directive in respect of an allegedly defective product are instituted against one company (A) in the mistaken belief that A was the producer of the product when in fact the producer of the product was not A but another company (B), is it permissible for a Member State under its national laws to confer a discretionary power on its courts to treat such proceedings as proceedings against the producer within the meaning of Article 11 of the Directive?

    3. Does Article 11 of the Directive, correctly interpreted, permit a Member State to confer a discretionary power on a court to allow B to be substituted for A as a defendant to proceedings of the kind referred to in Question 2 above (the relevant proceedings) in circumstances where:

    (a) the period of 10 years referred to in Article 11 has expired;

    (b) the relevant proceedings were instituted against A before the 10-year period expired; and

    (c) no proceedings were instituted against B before the expiry of the 10 year period in respect of the product which caused the damage alleged by the claimant?"

38. Although the ECJ was of course aware that it was the decision in Horne-Roberts which had led the parties to refer these questions, it did not expressly address the reasoning in Horne-Roberts. It first identified what it said that the High Court was essentially asking in [33] of its judgment as follows:

    "33. By its second and third questions, which it is appropriate to examine together, the referring court asks essentially whether, when an action is brought against a company mistakenly considered to be the producer of a product, whereas, in reality, it was manufactured by another company, it is open to the national courts to view such an action as being brought against that production company and to substitute the latter, as defendant to the action, for the company initially proceeded against."

39. It is common ground that the reference in [33] to "the producer of the product" was a reference to the manufacturer. It seems to us to follow that, in the context of the instant case, [33] can be restated in this way:

    "33. … the referring court asks essentially whether, when an action is brought against a company mistakenly considered to be the producer of a product (viz APMSD), whereas, in reality, it was manufactured by another company (viz APSA), it is open to the national courts to view such an action as being brought against that production company (viz APSA) and to substitute the latter (viz APSA), as defendant to the action, for the company initially proceeded against (viz APMSD)".

40. The claimant would answer that question 'Yes', whereas APSA would answer it 'No'. The ECJ did not expressly answer it either 'Yes' or 'No'. The answer given by the ECJ in [39] was in these terms:

    "39. Therefore the reply to the second and third questions must be that, when an action is brought against a company mistakenly considered to be the producer of a product whereas, in reality, the product was manufactured by another company, it is as a rule for national law to determine the conditions in accordance with which one party may be substituted for another in the context of such an action. A national court examining the conditions governing such a substitution must, however, ensure that due regard is had to the personal scope of the Directive, as determined by Articles 1 and 3 thereof."

41. [39] begins with the word "therefore", which suggests that the conclusion in [39] follows from the analysis which precedes it. Since [33] states the question, that analysis must be in [34] to [38] which read as follows:

    "34. In that regard it must be observed that the Directive does not determine the procedural mechanisms which it is appropriate to apply when a victim brings an action for liability for defective products and makes an error as to the identity of the producer. It is therefore, as a rule, for national procedural law to determine the conditions in accordance with which one party may be substituted for another in the context of such an action.

    35. However, it must be observed that the class of persons liable against whom an injured person is entitled to bring an action under the system of liability laid down by the Directive is defined in Articles 1 and 3 of the Directive (Case C-402/03 Skov and Bilka [2006] ECR I-0000, paragraph 32). Since the Directive seeks to achieve a complete harmonisation in the matters it regulates, its determination in those provisions of the class of persons liable must be regarded as exhaustive (Skov and Bilka, paragraph 33).

    36. The liability imposed by the Directive is attributed by Articles 1 and 3(1) thereof to the producer, who is defined, in particular, as the manufacturer of a finished product.

    37. It is only in the cases exhaustively listed that other persons can be considered to be a producer, namely, any person who, by putting his name, trade mark or other distinguishing feature on the product presents himself as its producer (Article 3(1) of the Directive), any person who imports a product into the Community (Article 3(2) of the Directive) and the supplier who, where the producer of the product cannot be identified, does not inform the injured person, within a reasonable time, of the identity of the producer or of the person who supplied him with the product (Article 3(3) of the Directive).

    38. A national court, when it examines the conditions governing the substitution of one party for another in a particular dispute, must ensure that due regard is had to the personal scope of the Directive, as established by Article 3 thereof."

42. In our view [34] is the key paragraph. Subject to what is meant by "as a rule", the ECJ is saying that it is for national procedural law to determine the conditions in accordance with which one party may be substituted for another "in the context of such an action". As we see it, "the context of such an action" is that referred to in [33], that is, the context of an action brought against a person mistakenly thought to be the manufacturer. Thus, as we read [34], it contemplates that it is open to national procedural law to view such an action "as being brought against" the true manufacturer. If national procedural law does view the action "as being brought against" the true manufacturer, [34] expressly recognises (at any rate "as a rule") that is open to the national court to substitute the true manufacturer for the defendant who was mistakenly thought to be the true manufacturer.

43. This approach seems to us to be consistent with the language and purpose of article 11. Thus, as Keene LJ observed in Horne-Roberts, article 11 does not provide an absolute period of ten years after which the rights of the injured person are extinguished. It expressly provides that "they are extinguished unless the injured person has in the meantime instituted proceedings against the producer". The reference to "the producer" in the last sentence of article 11 seems to us naturally to mean the producer sued and because article 11 is expressed in terms of extinguishing the claimant's rights against any person not sued within the ten year period we can see that it might be construed as precluding the possibility of substituting another party as a defendant after that period has expired, with the result that any mistake made by or on behalf of the injured party is irrelevant. However, it is plain from [34] that the ECJ has not adopted that construction. On the contrary, it has held in [34] (and in [39] and in its answer to questions 2 and 3) that it is for national procedural law, and thus the national court, to determine whether, and if so under what conditions and with what effect, it is permissible for one person to be substituted for another where a mistake of the kind under consideration has been made.

44. In these circumstances, if, as the judge held, the English court has power under section 35 of the 1980 Act and CPR 19.5 to substitute the true manufacturer for the person originally sued whom the claimant mistakenly thought was the manufacturer, the effect is that the person substituted for the original defendant is treated as having been sued at the date of the original action. Provided the original action was commenced within the ten year limitation period, the effect of this relation back under English law is that the proceedings against him are to be treated for all purposes, including article 11 of the Directive and section 11A(3) of the 1980 Act, as having been commenced within that period. As we read [34] and [39] of the judgment of the ECJ, it has left it to national courts to decide in accordance with their own procedural law whether substitution should be permitted to prevent the rights of the injured person being extinguished on the facts of a case like this, provided they pay due regard to the requirement that proceedings have been "instituted against the producer" within the meaning of the proviso to article 11. This requirement is met, as we see it, in a case where the English court is satisfied that the mistake was not a mistake as to the identity of the manufacturer, but as to its name or nomenclature.

45. Mr Leggatt submits that that analysis is wrong because of the reasons given in [35] to [38] of the ECJ's judgment, to which we have already referred, in which the court emphasizes the limited group of persons to whom the Directive applies. In particular it emphasizes that only those defined by articles 1 and 3 of the Directive, notably the manufacturer and those expressly identified, are to be treated as producers under article 3. [38] expressly states that the national court must ensure, when it examines the conditions governing the substitution of one party for another, that "due regard is had to the personal scope of the directive, as established by article 3".

46. Mr Leggatt submits that this means that the claimant's rights are extinguished unless within the ten year period he commences proceedings against someone who is a producer within the meaning of the Directive. Thus he submits that, when a claimant sues A within ten years, article 11 means that he can sue any other producer, provided only that A is in fact a producer. So, for example, he could substitute APSA for APMSD (and presumably add APSA as an additional defendant) provided that APMSD was itself a producer. (The reason for advancing this argument is that APSA intends to say that APMSD did not fail to respond within a reasonable time to the claimant's solicitors' request for the name of the producer and was therefore not a producer at all. If that is correct, proceedings were not commenced a person who was in fact a producer within the ten year period).

47. That submission was advanced to the ECJ. It was moreover supported by the Commission and indeed by the Advocate General and Mr Leggatt submits that we should conclude that the ECJ accepted it. However, in our judgment, the difficulty is that there is nothing in the reasoning of the ECJ as set out in its judgment to suggest that it did. The ECJ is not of course bound to accept a submission made by the Commission or, indeed, to agree with the opinion of the Advocate General. In this case the ECJ did not refer either to the submission made by the Commission or to the opinion of the Advocate General in this respect. We must therefore focus on the reasons which the ECJ gave in the course of its judgment.

48. In our opinion there is nothing in the court's reasoning which supports either the submission advanced by Mr Leggatt on behalf of APSA and by the Commission or the opinion of the Advocate General. On the other hand the terms of the judgment do support the view which we have expressed (and which is espoused by Mr Godsmark QC on behalf of the claimant), namely, that it is for national courts applying their own procedural law to decide whether substitution is permissible to enable the true manufacturer to be sued after the expiry of the ten year period. It is a matter for national procedural law to regulate the circumstances in which substitution will be permitted. In England the position is governed by section 35 of the 1980 Act, under which it has been held that the mistake must be one of name and not of identity. Moreover, the position of the new defendant or proposed defendant is protected under English law by the fact that the court has a discretion whether to permit substitution at all. We see nothing inconsistent with the reasoning of the ECJ in these provisions of English procedural law.

49. We should add that, as we see it, the reason for the use by the ECJ of the expression "as a rule" in [34] and [39] is simply to reflect the caveat in [38] that the national procedural rule must have regard to the personal scope of the Directive as established by article 3. In our opinion the English approach has regard to that fact.

50. In all these circumstances we do not accept Mr Leggatt's submission on the first issue but conclude hold that section 35 of the 1980 Act is capable of applying where the ten year period has expired. In short, we do not read the decision or reasoning of the ECJ as being inconsistent with the decision or reasoning of this court in Horne-Roberts. It follows that the question whether or not there is an exception to the principle of stare decisis of the kind suggested by Mr Leggatt does not arise. It is an important question which should only be determined when it arises for decision on the facts of a particular case. In the instant case we have simply sought to apply the reasoning of the ECJ to the relevant facts, which is of course the role of the national court after a reference.

51. In all the circumstances, we hold that we remain bound by Horne-Roberts and that we should follow it. We should add that it was in our opinion correctly decided and is consistent with the decision and reasoning of the ECJ in this case. We therefore answer the question posed in paragraph 2(i) as the first issue in this appeal in the affirmative.

    Issue 2 – Section 35 of the 1980 Act

52. The question under this head is whether the court has jurisdiction under section 35 of the 1980 Act to make an order for substitution on the particular facts of this case. At [17] the judge identified the two submissions advanced before him on behalf of APSA in this way:

    i) a party's name is not given "in mistake" where the claimant, even though under a mistake at the time when the action was commenced, was not under any mistake about the identity of the party against whom it was intending to proceed at the time when the relevant limitation period expired; and

    ii) in such a situation the substitution of a new party after the expiry of the limitation period cannot be regarded as "necessary."

    The judge rejected both submissions.

    "In mistake"

53. The judge's reasons for rejecting the first submission are set out in [18] of his judgment as follows:

    "APSA's first submission is that a party's name is not given "in mistake" where the claimant, even though under a mistake at the time when the action was commenced, was not under any mistake about the identity of the party against whom it was intending to proceed at the time when the relevant limitation period expired. I do not consider that this is a proper construction of subsection (6)(a), the terms of which I have already set out. The condition to be satisfied is that "the new party is substituted for a party whose name was given in any claim made in the original action in mistake for the new party's name." In the present case the claims in the original action were first set out in the unamended particulars of claim and then in the amended particulars of claim. In both there is a claim against APMSD as the manufacturer or producer of the vaccine. Based upon what APMSD and APSA have said as to the respective roles of APMSD and APSA the name of APMSD was "given" in a "claim made in the original action in mistake for the name of APSA". I do not consider that the express words of subsection (6) can be interpreted so as to have the effect that, notwithstanding that the name of the defendant was given in a claim made in the original action in mistake for the name of another person, the condition is nevertheless not satisfied where the claimant was not under any mistake about the identity of the party against whom it was intending to proceed at the time when the relevant limitation period expired. There are no words which have that effect. If subsection (6) were so interpreted it would follow that the jurisdiction to substitute a party did not exist where a claimant had mistakenly named a person as defendant but then by diligent enquiry discovered the truth before the limitation period expired whereas the jurisdiction to substitute a party did exist where a claimant had mistakenly named a person as defendant but then negligently failed to enquire further. Thus the more negligent the claimant had been the more likely it would be that the jurisdiction existed. This would be such an odd result that it cannot, in the absence of clear words, be regarded as having been the intention of the legislature cf Horton v Sadler [2006] UKHL 27 at paragraph 24 per Lord Bingham."

    In this court Mr Leggatt does not challenge the judge's decision or reasoning set out in that paragraph.

    "Necessary"

54. Before the judge both parties proceeded on the basis that the proper construction of section 35(4)-(6) of the 1980 Act was that the claimant had to satisfy two conditions. The first was that the new party is to be substituted for a party whose name has been given in a claim in the original action in mistake for the new party's name and the second was that the substitution was necessary for the determination of the original action. The judge did not accept that there are two conditions. He concluded that, on the true construction of section 35, where the new party is to be substituted for a party whose name has been given in a claim in the original action in mistake for the new party's name, substitution is to be regarded as "necessary" for the determination of the original action.

55. The judge said in [20] of his judgment that that conclusion was consistent with CPR 19.5(3)(a) and with this observation of Jacob LJ in Morgan Est v Hanson Concrete at [39]:

    "Is the addition of company A or C "necessary" (19.5(3)(a))? That depends on whether the court is satisfied that "the new [party] is to be substituted for a party who was named in the claim form in mistake for the new party".

56. CPR 19.5(2) provides among other things that the court may add or substitute a party only if "the addition or substitution is necessary" and rule 19.5(3) provides:

    "The addition or substitution of a party is necessary only if the court is satisfied that –

    (a) the new party is to be substituted for a party who was named in the claim form in mistake for the new party;

    (b) the claim cannot properly be carried on by or against the original party unless the new party is added or substituted as claimant or defendant; or

    (c) the original party has died or had a bankruptcy order made against him and his interest or liability has passed to the new party."

57. Mr Leggatt submits that it is not permissible to use the CPR as an aid to construction of the statute, especially given the difference in language between the two. It will be recalled from the quotation at paragraph 13 above that section 35(6) provides:

    (6) The addition or substitution of a new party shall not be regarded for the purposes of subsection (5)(b) above as necessary for the determination of the original action unless either -

    (a) the new party is substituted for a party whose name was given in any claim made in the original action in mistake for the new party's name; or

    (b) any claim already made in the original action cannot be maintained by or against an existing party unless the new party is joined or substituted as plaintiff or defendant in that action."

    Mr Leggatt correctly points out the difference between the expression "unless either" in the subsection and "only if" in the rule.

58. While we see the force of Mr Leggatt's submission, the way in which the rule is formulated shows (to put it at its lowest) the view of the Rule Committee as to the meaning of the statute because we can see no reason why the committee should want to give the rule a different meaning from the statute. The way in which the rule is formulated supports both the view of Jacob LJ and that of the judge.

59. In any event, it seems to us that the meaning given to section 35(6) by the judge is correct having regard to the statutory language and in particular to section 35(6)(b). Thus subsection (6) provides that the addition or substitution of a new party shall not be regarded as necessary unless either (a) or (b) is satisfied; that is, unless there is a relevant mistake or an existing claim against the original party cannot be maintained without the joinder or substitution of the new party. The natural meaning of that language seems to us to be that, if there is either a mistake of a kind sufficient to satisfy (a) or the kind of necessity identified in (b), then the test of necessity in subsection (5) is satisfied, but not otherwise.

60. We would add that the judge's construction of the statute seems to us to be sensible, as the Rules Committee evidently thought. The proposed new party is after all protected by the fact that, even if he establishes the necessary criteria, the claimant does not have a right to have a new party added or substituted but must persuade the court to make the order in the exercise of its discretion. In the exercise of its discretion the court will of course make what it regards as the just order. The problem for APSA in the instant case is that the judge rejected its submission that he should not exercise his discretion in favour of the claimant and it does not appeal against that decision.

    Conclusion

61. For these reasons we conclude that, given the fact that APSA now accepts that there was a relevant mistake within the meaning of section 35, it follows that the substitution was necessary for the purpose of determining the original action within the meaning of section 35(5) and (6) and that, given that APSA does not challenge the way in which the judge exercised his discretion, the appeal must be dismissed.

    Postscript

62. This conclusion makes it unnecessary to consider Mr Leggatt's challenge to the judge's conclusion that, if his construction of section 35(6) was wrong, he would have held that the test of necessity was satisfied. He gave his reasons at [22] to [27] of his judgment. It does not seem to us to be necessary or desirable further to lengthen this judgment by discussing this issue in any detail. We will only say that we are not persuaded that the judge reached the wrong conclusion. As we see it, the judge was correct to hold that the addition or substitution of APSA was necessary for the determination of the claimant's claim under the CPA against the manufacturer of the vaccine. That seems to us to be sufficient to satisfy the requirement in section 35(5)(b) and (6) that joinder or substitution was "necessary for the determination of the original action".

63. It does not seem to us to be an answer to say that the claimant was pursuing other claims against APMSD, both under the CPA and outside it, in addition to the claim against it as manufacturer of the vaccine. Section 35 of the 1980 Act is directed to "new claims" and contemplates both the addition or substitution of a new cause of action in existing proceedings, as well as the addition or substitution of a new party to such proceedings. In our view it requires the court to consider each proposed new cause of action and each proposed new party separately when considering whether the requirements of subsections (5) and (6) are satisfied. There is nothing in the language of the section to suggest that the court cannot substitute a party in respect of one cause of action only and the principles underlying these subsections support the conclusion that it can. Although subsection (5)(b) uses the expression "necessary for the determination of the original action", subsection (6)(a) makes it clear that the requirement will be satisfied if a mistake was made in relation to any claim made in the action. Moreover, in so far as it is said that the test of necessity is not satisfied because the claimant was aware of the fact that it was being said that APSA and not APMSD was the manufacturer before the expiry of the ten year period, we do not think that that fact is relevant to the question whether it was necessary to join or substitute APSA "for the determination of the original action". It plainly was necessary for that purpose. Any criticism of the conduct of the claimant or his solicitors was of course relevant to the exercise of the discretion. However, all such matters were taken into account by the judge in that context and, as already stated, the exercise of his discretion is not now challenged.

64. For the reasons we have given we dismiss the appeal.