England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		20/10/2006

Mr. Justice Teare :

1. This is an application pursuant to section 35 of the Limitation Act 1980 to substitute Aventis Pasteur SA ("APSA") for the Defendant ("APMSD"). Section 35 provides 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) …………..

2. The Claimant is now aged 14 having been born on 2 November 1991. On 6 October 1992 and 3 November 1992 he received two doses of HiB vaccine. Thereafter he suffered severe brain damage. It is his case that the brain damage was caused by the vaccine. The Claimant commenced an action against APMSD on 1 November 2000 believing APMSD to have been the manufacturer or producer of the vaccine. That belief was mistaken and the Claimant now wishes to substitute APSA for APMSD on the basis that that company was the manufacturer or producer of the vaccine.
3. Under the Consumer Protection Act 1987 a claimant has 10 years from the date on which the vaccine is put into circulation to bring a claim under the Act. That 10 year period expired at the latest on 3 November 2002. The researches of APSA suggest that the vaccine was put into circulation on 22 September 1992. If that is correct then the 10 year period expired on 22 September 2002.
4. The application to substitute was issued on 10 March 2003 after the 10 year period had expired. Since then there has been an excursion to the European Court of Justice to ascertain the answer to two questions, one of which was, in essence, whether the Council Directive of 1985 (85/374) concerning product liability permitted the courts of a member state to allow a party (D2) to be substituted for another party (D1) in circumstances where a claim for product liability had been commenced against D1 within the 10 year period allowed by Article 11 of the Directive but the application to substitute D2 for D1 had not been made until after the expiry of that 10 year period. On 9 February 2006 the European Court of Justice answered that question in the following way:

"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 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 Directive 85/374, as established by Articles 1 and 3 thereof."

5. In Horne Roberts v SmithKline Beecham plc [2002] 1 WLR 1662 the Court of Appeal held that pursuant to section 35 of the Limitation Act 1980 the Court had power to substitute one party for another after the expiry of the 10 year period provided by the Consumer Protection Act. In Morgan-Est (Scotland) Ltd. v Hanson Concrete Products Ltd. [2005] 1 WLR 2557 the Court of Appeal held that there is no reason to construe mistake in section 35 restrictively. In so holding the Court departed from earlier authorities which had given a restrictive meaning to the type of mistake which could found a claim for substitution under section 35.
6. The argument advanced on behalf of the Claimant in support of the present application was simple. The Claimant's solicitors issued proceedings against APMSD believing it to have been the manufacturer of the vaccine. APMSD has said that it was not the manufacturer and that APSA was. Thus the name of APMSD has been given in mistake for APSA and the substitution of APSA for APMSD is necessary for the determination of the original action. However, it has been submitted on behalf of APSA that the facts of the present case are such that the Court has no jurisdiction to substitute APSA for APMSD under section 35. In the alternative, in the event that the Court finds that there is jurisdiction, this is a case where the Court's discretion should be exercised by not allowing the requested substitution. In order to understand the basis of the arguments advanced on behalf of APSA it is necessary to set out the procedural history in some detail.

The decision to name APMD as defendant

7. Enquiries made by the Claimant's solicitors in 1995 of the GP who administered the vaccine and of another firm of solicitors acting in the MMR litigation led the Claimant's solicitors to believe that the manufacturer of the vaccine was APMSD. However, 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. No pre-action protocol was followed.
8. It was not until 1 August 2001 that the Claimant was able to serve particulars of his claim with a supporting medical report. It is necessary to set out the material parts of the particulars of claim. They were as follows:

"1. The Claimant's claim is for damages for personal injuries, loss, damage, inconvenience and distress suffered as a result of vaccination with a HIB vaccine on or around 3^rd day of November 1992.

2. The Claimant alleges that the vaccine administered to him on 3 November 1992 was manufactured and/or produced by the Defendant, being of a type or brand of vaccine known to be manufactured by and registered in the UK by/to the Defendant.

3. It is further alleged that the vaccine administered to the Claimant on 3 November 1992 is defective within the meaning of the Consumer Protection Act 1987 and if manufactured or produced by the Defendant, the Defendant is liable under the terms of that Act for the said injury, damage and loss sustained by the Claimant.

4. Alternatively, the said injury and damage sustained by the Claimant was caused by the negligence and/or breach of the statutory duty of the Defendant in the research, manufacture, testing and/or development of the said vaccine and/or in the processing, compilation and presentation of the data obtained thereby and/or in their submissions to the relevant licensing authorities and/or in the sale, supply and marketing and post product licensing surveillance and evaluation of the said vaccine and/or by the negligent misstatement of the Defendant in the marketing, advertising and other promotion for the sale and prescription of the said vaccine."

The response of APMSD

9. 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. Their letter was said to be a "notice pursuant to section 2(3) of the Consumer Protection Act 1987" but it was not in form a request for the identity of the manufacturer pursuant to section 2(3) of that Act. However, after a letter dated 28 March 2002 chasing for a reply, APMSD's solicitors replied on 17 April 2002 stating that the manufacturer of the vaccine, as stated on the licence application made in November 1991, was Pasteur Merieux Serums et Vaccins of France. This was a former name of APSA (though that was not stated in the reply).

The response of the Claimant

10. On 2 May 2002 the Claimant served amended Particulars of Claim. It is necessary to set out the material parts of this amended claim. They were as follows:

"1. The claimant was born on the 2^nd November 1991. He brings this action by his mother and Litigation Friend Kerry McLoughlin.

2. The defendant is a pharmaceutical company that at all material times was engaged or held itself out as engaged in the production, importation and supply of vaccines, including the Haemophius Influenza Type B vaccine (HIB).

3. On the 3rd November 1992 the claimant was vaccinated with a HIB vaccine.

4. The vaccine was produced by the defendant, alternatively was imported by the defendant, or alternatively the defendant held itself out as being the producer of the vaccine.

5. Alternatively, the defendant is, pursuant to section 2(3) of the Consumer Protection Act 1987, responsible for any defect in the vaccine. The defendant was a supplier of the vaccine within the meaning of section 2(3) of the Act and was requested by solicitors acting for the claimant to provide the identity of the producer of the vaccine. It has failed within a reasonable period to comply with that request.

6. Following vaccination with the vaccine the claimant developed an encephalopathy leading to permanent neurological damage.

7.It is the claimant's case that the encephalopathy was caused by the vaccine."

11. Thus 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.

Attempts to sue APSA

12. On 18 June 2002 the Claimant's 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 July and 12 July the solicitors replied that they were instructed to act for APSA but would not agree to joinder. On 24 July they said that they had no instructions to accept service.
13. 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". This was understandable in circumstances where the Claimant maintained that APMSD was liable notwithstanding that APMSD might not have been the actual manufacturer of the vaccine.
14. The joinder application was served on APSA in France on 18 September 2002 and the hearing of the application took place 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.
15. On 16 October a second action against APSA was issued. There is an application to strike out that action but I am not presently concerned with that.
16. 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) the Claimant on 10 March 2003 issued an application to substitute APSA for APMSD. The next day joinder of APSA was set aside, APSA's researches having suggested that the vaccine had been put into circulation before 4 October 1992.

APSA's submission that there is no jurisdiction to substitute

17. APSA made two submissions. Firstly, it was said 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. Secondly, it was said that in such a situation the substitution of a new party after the expiry of the limitation period cannot be regarded as "necessary." The application to substitute has come about, not because of the mistake initially made by the claimant, but because of the claimant's election to proceed against the original defendant after it was no longer under any mistake. This argument was developed as follows. Where a claimant (i) finds out shortly after commencing proceedings against A that the manufacturer was in fact B, but (ii) nevertheless decides to continue against A because he considers that he has a good cause of action against A and (iii) later decides, after the limitation period has expired, that he would then like to substitute B for A as defendant, there is nothing "necessary" about such a substitution. The claim which the claimant has intentionally been pursuing can perfectly well be determined without a change of party.
18. 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.
19. APSA's second submission was that 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 the substitution of a new party after the expiry of the limitation period cannot be regarded as "necessary." The application to substitute has come about, not because of the mistake initially made by the claimant, but because of the claimant's election to proceed against the original defendant after it was no longer under any mistake.
20. The relevant condition to be satisfied is that the substitution of the new party is "necessary for the determination of the original action". Both counsel proceeded on the basis that the proper construction of section 35(4)-(6) was that in a case such as the present the claimant had to satisfy two conditions, the first was that the new party is to be substituted for a party whose name had 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. I am not convinced that that is the true construction of section 35(4)-(6). The true construction appears to me to be that where the new party is to be substituted for a party whose name had 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. That construction appears to be consistent with CPR Part 19.5(3)(a) and with the observation of Jacob LJ in Morgan Est v Hanson Concrete at paragraph 39:
"Is the addition of company A or C "necessary" (19.5(2)(a))? That depends on whether the court is satisfied that "the new claim is to be substituted for a party who was named in the claim form in mistake for the new party".
21. On this basis the conclusion that the name of APMSD was given in a claim made in the original action in mistake for the name of APSA necessarily means that the substitution of APSA for APMSD is to be regarded as necessary for the determination of the original action.
22. However, in case I am wrong and because the application was argued on the basis that in a case such as the present the claimant had to satisfy two conditions, firstly, that the new party is to be substituted for a party whose name had been given in a claim in the original action in mistake for the new party's name and, secondly, that the substitution was necessary for the determination of the original action I must also consider APSA's submissions on that basis.
23. The application was argued on the basis that the words "necessary for the determination of the original action" mean necessary for the determination of the claim which the claimant intended to bring in the original action. In order to identify the claims which the Claimant intended to bring in the original action it is necessary to have regard to the amended particulars of claim because those are claims which the Claimant wishes to bring at the time when the application to substitute is made. The amended particulars of claim show that the claimant wishes to bring several claims against APMSD. The first claim against APMSD is on the basis that APMSD was the producer of the vaccine. The alternative claims against APMSD are on the basis that APMSD imported the vaccine, held itself out as the producer or failed to identify the producer within a reasonable time of being asked to identify the producer.
24. It is the first claim which the Claimant now wishes to bring against APSA, that is the claim based upon the strict liability of the producer or manufacturer for the alleged defect in the vaccine under the Consumer Protection Act. In order for that claim to be determined it is necessary for APSA to be substituted for APMSD because, according to APMSD and APSA, APSA is the producer of the vaccine, not APMSD.
25. It is however submitted that the application to substitute has come about, not because of the mistake initially made by the claimant, but because of the claimant's election to proceed against the original defendant after it was no longer under any mistake. By way of elaboration of this submission it is said that where a claimant finds out shortly after commencing proceedings against A that the manufacturer was in fact B, but nevertheless decides still to proceed against A because he considers that he has a good cause of action against A and later decides, after the limitation period has expired that he would not like to substitute B for A as defendant, there is nothing "necessary" about such a substitution, because the claim which the claimant has intentionally been pursuing can perfectly well be determined without a change of party.
26. This submission, as elaborated, would have force where the only claim advanced, after the mistake had been pointed out to the claimant, is a claim unaffected by any mistake. Thus in the present case had the Claimant in May 2002 amended the particulars of claim so that the only claims brought against APMSD were on the basis that APMSD had failed to identify the producer within a reasonable time of being asked to identify the producer it could not be said that substitution of APSA for APMSD was necessary for the determination of that claim. Similarly, it could not be said that APSA was to be substituted for APMSD whose name had been given in mistake for APSA's name.
27. But in the present case the first claim which the Claimant advances in the amended Particulars of Claim is a claim against APMSD as producer or manufacturer. On the basis of what APMSD and APSA have said the name of APMSD in that claim has been given in mistake for that of APSA. The substitution by APSA for APMSD is necessary for the determination of the Claimant's claim against the producer or manufacturer of the vaccine.
28. I must therefore reject the submission made on behalf of APSA and hold that the Court has jurisdiction to substitute APSA for APMSD.

Discretion

29. Having regard to the decision of the ECJ in this case the Court should exercise its discretion having "due regard to the personal scope of Directive 85/374 as established by Articles 1 and 3 thereof". The Court must also have regard to the overriding objective, namely, to deal with the case justly.
30. The ECJ said that when a court was considering substitution it must have due regard to the personal scope of Directive as established by Articles 1 and 3 thereof. Article 1 provides that the producer shall be liable for the damages caused by a defect in his product and Article 3 states who is to be regarded as the producer. Thus the effect of the ECJ's ruling appears to have been that courts should not exercise their power to order substitution by making a person party to a claim under the Directive who is not within the definition of producer in Articles 1 and 3. If the Court did so it could not have had due regard to the personal scope of the Directive. This was, I think, the interpretation favoured by Counsel for the Claimant and perhaps also by Counsel for APSA, although the latter argued that ECJ's ruling also had the effect that substitution should not be allowed lightly and that due regard should be had to the 10 year time limit (which is to be found in article 11 of the Directive). I am unable to discern in the ECJ's ruling a suggestion that substitution should not be allowed lightly but the 10 year limit is obviously one of the circumstances to which the Court must have regard when considering substitution and seeking to deal with the case justly.
31. In support of the application for substitution counsel for the Claimant made the following submissions:

i) It was probable that when APMSD was sued within the 10 year period APSA was made aware of that fact. They were related companies and no evidence has been filed by APSA suggesting that it only learnt of the claim after the expiry of the 10 year period.

ii) APSA must have anticipated that the Claimant, once the mistake had been pointed out, would seek to "regularise" the proceedings by substituting APSA for APMSD.

iii) In June 2002, before the 10 year period had expired, APSA was aware that the Claimant wished to join APSA to the proceedings.

iv) Substitution of APSA for APMSD can cause no prejudice to APSA save for the fact that APSA would be deprived of a limitation defence but that, following the approach of the Court of Appeal in Morgan Est, is not to be regarded as prejudice.

v) The fact that the reason for the Claimant's solicitors' mistake in suing APMSD was or may have been their failure to examine the product literature and to ask APMSD before action whether they were the manufacturer ought not to be given much if any weight because, as was said in by the Court of Appeal in Morgan Est, the jurisdiction is to put right that which will generally have been an error of the Claimant's own making.

vi) If the conduct of the Claimant is to be given weight then the Court should take into account a number of matters concerning the conduct of APSA, in particular APSA's refusal to agree to joinder before expiry of the 10 year time limit when there can have been no reason for such a refusal.

32. Counsel for APSA submitted that substitution should be refused for these reasons:

i) Where a person is mistakenly sued as defendant and the claimant, when the mistake is subsequently pointed out, decides to proceed against the original defendant permission to substitute should rarely if ever be given.

ii) Where the mistake was entirely avoidable and arises from the failure to follow any form of pre-action protocol permission to substitute should be refused. In this regard reliance was placed on the decision of the Court of Appeal in Martin Kaisary and the Royal Free Hospital Trust [2005] EWCA Civ 594.

iii) Regard should be had to the prejudice of losing a limitation defence when that loss is caused not by the Claimant's mistake but by the Claimant's informed choice to continue to proceed against the original defendant.

33. I have reached the conclusion that this is a case where substitution should be permitted. In reaching that conclusion I have had regard both to the overriding objective of dealing with cases justly and to the personal scope of the Directive as established by Articles 1 and 3. 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.

34. I have therefore decided to grant permission for the Claimant to substitute APSA for APMSD as the defendant in this action.