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

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
On Appeal from Master Eastman

		Royal Courts of Justice Strand, London, WC2A 2LL
		23/11/2012

His Honour Judge Cotter Q.C. :

1. This is an appeal against the order of Master Eastman made on 4^th July 2012. Permission to appeal was granted by Mr Justice Cranston on 10^th October 2012. At the heart of the appeal is the issue of the scope of the Court's power to permit an amendment allowing the substitution of a party outside the relevant limitation period. Specifically, the Appellant, Sabre Insurance Company Limited ("Sabre") appeals from the order of the Master that the Claimants have permission to amend the Particulars of Claim to substitute the Estate of Ioan Bura ("the Estate") in place of Sabre.

History of proceedings

2. This claim arises out of a road traffic accident which occurred on 29^th December 2007 in Romania. The Claimants were passengers in a motor vehicle registration no AJ56WJM driven by Ioan Bura, who lost control of the car and hit the concrete base of a bridge. Tragically he died in the accident. The Claimants are Romanian nationals as was Ioan Bura. Sabre provided motor insurance to Mr Chirila Bura, the father of Ioan Bura, in respect of the motor vehicle. Ioan Bura was driving whilst uninsured at the time of the accident.
3. On 8^th December 2010 the Claimants issued a claim form issued against Sabre referring to the accident, that it resulted from the negligence of the driver (unnamed) and that as Sabre was the insurer of the vehicle there was a duty to indemnify their insured by virtue of section 3 of the European Communities (Rights against Insurers) Regulations 2002. Particulars of Claim relying on this direct right of action were served on 10^th February 2011. These set out the facts of the accident, that it was caused by the negligent driving of Mr Iona Daniel Bura, and at paragraph 4 that

"The Defendant was at all material times the insurer of the vehicle registration number AJ56WJM and consequently has a duty to indemnify their insured for negligent acts or omissions pursuant to section 3 of the European ( Right against Insurers) Regulations 2002, and is directly liable to the Claimants for the negligence of their insured."

4. On 27^th April 2011 a Defence was served denying that the Claim Form and/or Particulars of Claim disclosed reasonable grounds for the bringing of a claim. There was reference to an obvious problem with the claim as pleaded arising by virtue of the fact that the accident occurred in Romania whereas the Regulations only apply to an accident occurring within the United Kingdom. Further it was pleaded that the driver Ioan Bura, was not the insured party.
5. On 7^th June 2011 the Claimants made an application for permission to join the Estate of Ioan Bura as Second Defendant. By way of response on 13^th July 2011 the Defendant made an application to strike out the claim.
6. By a letter dated 28^th May 2012 from the Claimants' solicitors it was conceded that the Claimants had no right of action against Sabre, and it was stated that the Claimants intended to continue with their application to amend as an application to substitute the Estate of Ioan Bura as Defendant.
7. In due course the Claimants sent draft Amended Particulars of Claim to the Defendant. Save for the substitution of the Estate the only amendment was to delete paragraph 4 to which I have referred
8. On 29^th June 2012 there was a further application by Claimants for permission to substitute the Estate in place of Sabre.
9. It was common ground before the Master that the claim as originally formulated was indeed fatally flawed. Regulation 3 of the European Communities (Rights against Insurers) Regulations 2002 provides that an insurer "shall be directly liable" to an entitled party (i.e. any resident of a Member State) if certain conditions are fulfilled:

i) The entitled party has a cause of action arising out of an "accident", as defined. This condition was not fulfilled since 'accident' is defined by Regulation 2(1) as meaning an accident on a road or other public place in the United Kingdom, and the Claimants' accident occurred in Romania; and

ii) The entitled party has a cause of action against "an insured person in tort", defined by ss. 2(1) and 2(3) as a person insured under a policy of insurance. This condition was not fulfilled since the Claimants' cause of action was against Ioan Bura, who was not insured by Sabre. Further, the direct liability created upon the insurer toward the entitled party is a liability equivalent to "the extent that he [the insurer] is liable to the insured person". The extent of Sabre's liability under the policy of insurance is nil, since Ioan Bura was not authorised to drive under the policy and was not entitled to any indemnity under it.

10. The applications heard by Master Eastman on 4^th July 2012 were Sabre's application of 13^th July 2011 to strike out the claim and the Claimants' application to substitute the Estate of Ioan Bura in place of the original Defendant, Sabre, issued on 29^th June 2012, and to amend the content of the Particulars of Claim as set out in the draft served. The Claimants' original application dated 7^th June 2011 to amend by adding the Estate as Second Defendant, was effectively abandoned.
11. Master Eastman was assisted by what he referred to as "compendious and extremely helpful" skeleton arguments produced by both Counsel. By agreement he dealt with the application to substitute first.
12. He stated

"Miss Kinsler at the heart of her skeleton argument.. essentially reduces the issue to this. She says the original claim was brought pursuant to a statutory entitlement under the 2002 regulations. I would only have a discretion to allow the substitution if, pursuant to either [CPR] 19.5(3) or indeed, section 35(5) and (6), I was satisfied that , effectively, I would be carrying on the instant claim."

And

"Miss Kinsler says , well, the claim in this case was a claim arising out of statute and, therefore, to effectively instigate a claim for personal injury based in tort , which is what the substitution would do, is not the same as a claim for damages for personal injuries arising out of a road traffic accident, it is not the same claim. Therefore the point does not arise as they are totally different claims. That is her point. Mr Mead says, well, actually they are not because in fact the claim essentially is "the remedy sought" and the remedy is damages for a personal injury. I am satisfied that Mr Mead's interpretation of the circumstances in the one to be preferred. This is, essentially a claim for damages for personal injury."

And

"Reading Regulation 3 it is quite clear to me that whilst [regulation] 3(2) says you can go directly against the insurer, a proper interpretation of the whole of those regulations makes it clear that the underlying cause of action here is the liability of the insurer for their insured. That is what defines the liability of the insurer. Their insured is the person responsible for the cause of action. As Mr Mead says, the factors are the same, the measure of damages will all be the same, the liability follows in the same way, the parties will be the same and the insurer will be the same. In those circumstances I am quite satisfied that the claim in this case is a claim for damages for personal injuries, i.e. a cause of action against and insured person on tort arising out of an accident. Taking all those facts into account, the question which Ms Kinsler poses… is it the case that the direct claim brought by the Claimants cannot be maintained unless the estate of Mr Bura is substituted for Sabre? The answer is clearly yes. The court therefore has the power to order substitution pursuant to s 35(6) of the Limitation Act and CPR 19.5(3)(b)"

13. As a result of this reasoning Master Eastman ordered that:

"1. The Claimants' application to amend the Particulars of Claim to substitute the Estate of Ioan Daniel Bura for Sabre Insurance Company Limited dated 7 June 2011 be allowed"

2. The Amended Particulars of Claim be filed and served by 4pm on 13 July 2012."

14. There was no order was made with respect to Sabre's application to strike out, save that Sabre had to pay the costs of it.
15. Sabre appeals the order primarily on the basis that the Master was wrong in law in that he had no discretion to make the order that he did. As a secondary argument it is said that if the Master did have the power that was wrong in the exercise of his discretion. The master did not expressly set out that he had directed his mind to the exercise of discretion stating only that it was "the only proper and appropriate course". He did make reference in what he described as "ancillary comments" to any course other than substitution being unattractive and "be seen to do nothing more than promote satellite litigation"
16. Before I turn to the submissions before me it is necessary to set out the following matters that were not in dispute between the parties and also the relevant statutory provisions.
17. The following matters were common ground :

i) The Claimants' claim against Ioan Bura, or his estate, is subject to Romanian law, including the Romanian law of Limitation: see the Private International Law (Miscellaneous Provisions) Act 1995, s. 11; and the Foreign Limitation Periods Act 1984, s. 1.

ii) The Romanian law of Limitation bars any claim after three years have elapsed from the date of the accident. There is no discretionary extension of that period.

iii) The period measured, in any consideration of whether the limitation period has expired, is (as in English law) the period between the date of the accident and the date of the commencement of proceedings.

iv) On the facts of the present case, the limitation period in Romanian law with respect to the claim against the Estate of Ioan Bura expired on or about 29^th December 2010; that is to say:

a) some 3 weeks after the claim form was issued against Sabre;

b) about 2½ months before the proceedings were served on Sabre;

c) some 18 months before the hearing on 4^th July 2012.

v) That any action against the Estate of Ioan Bura which was commenced in 2012 would be statute barred.

vi) However, by section 35 of the Limitation Act 1980:

"A new claim means … any claim involving either the addition or substitution of a new cause of action; or the addition or substitution of a new party" – s. 35(2)

And

"For the purposes of this Act any new claim made in the course of an action shall be deemed to be a separate action and to have been commenced … on the same date as the original action" – s. 35(1)

These provisions are expressly applied to the present case, even though it is a case concerning the Romanian law of Limitation, by s. 1(3) of the Foreign Limitation Periods Act 1984. Therefore, if an amendment of existing proceedings was permitted to add or substitute the Estate of Ioan Bura as a Defendant, section 35 deems that the action against the Estate was commenced at the date of the original proceedings, i.e. within the Limitation period. This would deprive the Estate of Ioan Bura of an accrued limitation defence which would be available to defeat any fresh proceedings brought against it and would have been available to defeat any such claim commenced at any time between 29^th December 2010 and 4^th July 2012.

18. It is the interpretation of Section 35 of the Limitation Act 1980, which is at the heart of this appeal. That is because the section lays down a set of steps which need to be considered in order to work out whether the Court is given the power to permit an amendment in the form sought in this case. Section 35 is in the following terms:

"35.— New claims in pending actions: rules of court.

(1) For the purposes of this Act, any new claim made in the course of any action shall be deemed to be a separate action and to have been commenced—

(a) in the case of a new claim made in or by way of third party proceedings, on the date on which those proceedings were commenced; and

(b) in the case of any other new claim, on the same date as the original action.

(2) In this section a new claim means any claim by way of set-off or counterclaim, and any claim involving either—

(a) the addition or substitution of a new cause of action; or

(b) the addition or substitution of a new party;

(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 within subsection (1)(b) above, other than an original set-off or counterclaim, 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.

For the purposes of this subsection, a claim is an original set-off or an original counterclaim if it is a claim made by way of set-off or (as the case may be) by way of counterclaim by a party who has not previously made any claim in the action.

(4) Rules of court may provide for allowing a new claim to which subsection (3) above 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) in the case of a claim involving a new cause of action, if the new cause of action arises out of the same facts or substantially the same facts as are already in issue on any claim previously made in the original action; and

(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.

(7) Subject to subsection (4) above, rules of court may provide for allowing a party to any action to claim relief in a new capacity in respect of a new cause of action notwithstanding that he had no title to make that claim at the date of the commencement of the action.

This subsection shall not be taken as prejudicing the power of rules of court to provide for allowing a party to claim relief in a new capacity without adding or substituting a new cause of action.

(8) Subsections (3) to (7) above shall apply in relation to a new claim made in the course of third party proceedings as if those proceedings were the original action, and subject to such other modifications as may be prescribed by rules of court in any case or class of case."

19. The Respondents/Claimants rely (and have always relied) on the provisions set out in section 35(5)(b) and (6)(b). Section 35(5)(b) provides that an exception to the prohibition may be permitted:

"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"

20. The words "for the determination of the original action" appear in s. 35(5)(b) but are not carried through into the corresponding Civil Procedure Rule of Court (CPR Part 19.5(2)(b)). However, the words must be read in to the Rule, otherwise the CPR would be relaxing the statutory requirement.

Appellant's Submissions

21. Mr Palmer Q.C. submitted that it was unsurprising that section 35(3)-(7) of the Limitation Act 1980 stringently restricts the circumstances in which it is permissible to deprive a Defendant of the accrued right of a limitation defence. He submitted that it is evident from the wording of s. 35(5)(b) alone that the condition is not satisfied in the present case. Specifically, the determination of the "original action" (i.e. the claim against Sabre) required the court to decide (inter alia):

i) whether Ioan Bura committed a tort against the Claimants (whether he was negligent);

ii) whether that tort arose out of an accident on a road or other public place in the United Kingdom; it being common ground that it did not ;

iii) whether Ioan Bura was an 'insured person' within the meaning of the 2002 Regulations – i.e. whether the Defendant's (Sabre's) insurance policy covered him for torts committed by him; it being common ground that it did not

iv) whether the Claimants had suffered compensable damage in the accident; which they clearly had ;

and as a result of (i) to (iv)

v) whether Sabre had incurred a liability to the Claimants pursuant to the statutory obligations imposed upon it by the 2002 Regulations.

22. Mr Palmer Q.C. also submitted that as a result the whole of the original action could be determined without joining any other party to it, let alone substituting for Sabre (against whom the original action was directed) another party (against whom no liability under the 2002 Regulations could possibly be asserted). In finding otherwise he said that Master Eastman had fallen into clear error. There was no discretion to allow the substitution.
23. Moreover, he submitted that the amendment to the Particulars of Claim to remove the contention in paragraph 4 that the Defendant was an insurer upon whom was imposed a liability by reason of the 2002 Regulations, itself demonstrates that the original action was being altered and could not be maintained (without transformation) against the party substituted for Sabre.
24. Mr Palmer Q.C. added that if this were not enough s.35(6) of the Limitation Act, supplemented by CPR 19.5(3) goes on to provide yet further restrictions in the case of claims which are 'new claims' by dint of the 'addition or substitution of a new party'. S. 35(6) provides:

"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) ….

(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."

25. The content of subsection (b) is reflected in the CPR Pt. 19.5(3)(b) in the following terms:

"The addition or substitution of a party is necessary only if the Court is satisfied that … (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."

26. So there are two additional hurdles if the first hurdle of s35(5)(b) is cleared. However in my view the phrase "cannot properly be carried on" should be read as "cannot be maintained". In effect there is no difference.
27. As for what would be properly saved by section 35 Mr Palmer Q.C. referred to the origin and subsequent history of the current section and the rules originating with the 1977 Law reform committee as comprehensively set out by Lord Collins in Roberts –v-Gill at p 250 para 27 et seq . In his judgment Lord Collins set out the history as follows;

"The 1980 Act and the rules of court

[24] The old rule of practice was that an amendment would not be allowed if it would prejudice the rights of the opposite party as existing at the date of the amendment; and in particular, an amendment should not be allowed so as to allow a plaintiff to set up a cause of action which would otherwise be barred by the Statutes of Limitation: Weldon v Neal (1887) 19 QBD 394 at 395 per Lord Esher MR. This principle applied to amendments consisting of joinder (or substitution) of parties: Mabro v Eagle, Star and British Dominions Insurance Co Ltd [1932] 1 KB 485, [1932] All ER Rep 411, Davies v Elsby Brothers Ltd [1960] 3 All ER 672, [1961] 1 WLR 170, Lucy v W T Henleys Telegraph Works Co Ltd (ICI Ltd, third party), Wild v Siemans Bros & Co Ltd [1969] 3 All ER 456, [1970] 1 QB 393, Liff v Peasley [1980] 1 All ER 623, [1980] 1 WLR 781.

[25] RSC Ord 20, r 5 was added in 1964, and prior to the changes in the rules following the 1980 Act, provided that the court could give leave to amend a writ or pleading in a number of cases, including an amendment to alter the capacity in which a party sued. Order 20, r 5(4) provided:

'An amendment to alter the capacity in which a party sues (whether as plaintiff or as defendant by counterclaim) may be allowed under paragraph (2) if the capacity in which, if the amendment is made, the party will sue is one in which at the date of issue of the writ or the making of the counterclaim, as the case may be, he might have sued.'

Order 20, r 5(2) provided that where an application to the court for leave to make such an amendment was made after any relevant period of limitation current at the date of the writ had expired the court might nevertheless grant leave if it thought it just to do so. Order 20, r 5(5) also allowed the addition or substitution of a new cause of action if it arose out of the same or substantially the same facts as a cause of action in respect of which relief had already been claimed in the action.

[26] But the Court of Appeal decided that the fact that in certain cases under Ord 20, r 5 amendments were to be permitted although the statutory period had run did not mean that, in cases falling outside the rule changes, there was any relaxation of the principle in Weldon v Neal: see Braniff v Holland & Hannen and Cubitts (Southern) Ltd [1969] 3 All ER 959, [1969] 1 WLR 1533 and Brickfield Properties Ltd v Newton, Rosebell Holdings Ltd v Newton [1971] 3 All ER 328, [1971] 1 WLR 862, not following Chatsworth Investments Ltd v Cussins (Contractors) Ltd [1969] 1 All ER 143 at 145, [1969] 1 WLR 1 at 5 per Lord Denning MR.

[27] In 1977 the Law Reform Committee (chaired by Orr LJ and including, among others, Griffiths and Walton JJ, Mr T H Bingham QC and Mr E G Nugee QC, and Professor A G Guest) issued a Final Report on Limitation of Actions (Cmnd 6923). The Committee had been invited in 1971 to consider what changes to the law relating to limitation of actions was desirable. Part V of the Committee's report was headed 'Procedure' and dealt with questions arising when it was sought to alter the character or scope of an action after the limitation period had expired.

[28] After referring to the power of the court to correct misnomer of parties in the then RSC Ord 20, r 5(3), the Committee referred (para 5.17) to what it described as 'not wholly dissimilar cases' where the existing rule might cause injustice, where the plaintiff had made an error of law or procedure, the correction of which would not occasion anyone to be taken by surprise. For example where an equitable assignee of a debt sued the debtor without joining the assignor and the limitation period then expired, he could not amend his pleading so as to join the assignor: Hudson v Fernyhough (1890) 34 Sol Jo 228. The Committee identified (para 5.20) these cases, among others, in which a new party should be capable of being added by way of amendment after the limitation period: (1) where the plaintiff was beneficially entitled in equity, and the person with the legal title was a necessary party to the action, for example, the equitable assignee of a chose in action, who could not sue without joining the legal assignor: Performing Right Society Ltd v London Theatre of Varieties Ltd [1924] AC 1, [1923] All ER Rep Ext 794; (2) the cestui que trust, who could not enforce a right of action against a stranger to the trust without joining the trustee: Harmer v Armstrong [1934] Ch 65, [1933] All ER Rep 778; (3) where the plaintiff was a shareholder suing to enforce a right vested in the company and the company was a necessary party to the action: Spokes v Grosvenor and West End Railway Terminus Hotel Co Ltd [1897] 2 QB 124 at 128, [1895–9] All ER Rep Ext 1779 at 1781–1782; cf Wallersteiner v Moir (No 2), Moir v Wallersteiner (No 2) [1975] 1 All ER 849, [1975] QB 373. The Committee pointed out (para 5.27) that the common factors in these examples were that (1) the plaintiff's action was not properly constituted unless the new party were joined; and (2) the plaintiff was not seeking any substantive relief against the new party.

[29] The Committee recommended (para 5.25) that the Rules Committee should be given power to cover by rule specific cases falling within a formula embodied in primary legislation. It rejected the solution of legislating for the specific cases. It accepted that the necessary formulation would not be easy, and it accepted that it had not been able to devise any entirely satisfactory formula. It summarised its conclusions (paras 46–48), so far as material, in this way: (1) No change was required in the rules which enabled a new cause of action to be added out of time; (2) a plaintiff should be able to amend pleadings out of time so as to sue in another capacity (including that of administrator) and the rule-making powers should be extended for that purpose; (3) the rule-making powers should be enlarged so as to confer power to enable parties to be added out of time, in specific cases if (a) the plaintiff's action was not properly constituted unless the new party were joined; and (b) the plaintiff was not seeking substantive relief against the new party, or if substantive relief was sought against the new party, joinder of the new party was necessary if the plaintiff's claim against the defendant was to succeed.

[30] The result of these recommendations (on which see Millett LJ in Yorkshire Regional Health Authority v Fairclough Building Ltd [1996] 1 All ER 519 at 526–527, [1996] 1 WLR 210 at 219) was s 35 of the 1980 Act and the consequent changes to the Rules of the Supreme Court.

Section 35 of the 1980 Act

[31] So far as material to this appeal, s 35 provides:

'New claims in pending actions: rules of court.—(1) For the purposes of this Act, any new claim made in the course of any action shall be deemed to be a separate action and to have been commenced—(a) in the case of a new claim made in or by way of third party proceedings, on the date on which those proceedings were commenced; and (b) in the case of any other new claim, on the same date as the original action.

(2) In this section a new claim means any claim by way of set-off or counterclaim, and any claim involving either—(a) the addition or substitution of a new cause of action; or (b) the addition or substitution of a new party …

(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 within subsection (1)(b) above, other than an original set-off or counterclaim, 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 …

(4) Rules of court may provide for allowing a new claim to which subsection (3) above 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) in the case of a claim involving a new cause of action, if the new cause of action arises out of the same facts or substantially the same facts as are already in issue on any claim previously made in the original action; and (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.

(7) Subject to subsection (4) above, rules of court may provide for allowing a party to any action to claim relief in a new capacity in respect of a new cause of action notwithstanding that he had no title to make that claim at the date of the commencement of the action.

This subsection shall not be taken as prejudicing the power of rules of court to provide for allowing a party to claim relief in a new capacity without adding or substituting a new cause of action …'

Rules of court

Rules of Supreme Court

[33] Following the 1980 Act, RSC Ord 15, r 6 was amended in 1981 and immediately prior to the CPR provided, so far as material, as follows:

'(5) No person shall be added or substituted as a party after the expiry of any relevant period of limitation unless either—(a) the relevant period was current at the date when proceedings were commenced and it is necessary for the determination of the action that the new party should be added, or substituted … In this paragraph "any relevant period of limitation" means a time limit under the Limitation Act 1980 …

(6) … the addition or substitution of a new party shall be treated as necessary for the purposes of paragraph (5)(a) if, and only if, the Court is satisfied that—(a) the new party is a necessary party to the action in that property is vested in him at law or in equity and the plaintiff's claim in respect of an equitable interest in that property is liable to be defeated unless the new party is joined, or …(d) the new party is a company in which the plaintiff is a shareholder and on whose behalf the plaintiff is suing to enforce a right vested in the company …'

[34] RSC Ord 20, r 5 was also amended in 1981, but the only relevant change was to permit amendment to a party's capacity not only to a capacity which the party had at the date of the commencement of the proceedings, but also to a change to a capacity which the party had since acquired. This gave effect to a recommendation of the Law Reform Committee, enacted as s 35(7), to deal with the anomaly that, where probate was granted to a person as executor, leave to amend to make a claim on behalf of the estate could be given because the title related back to the death, but where the plaintiff was subsequently granted letters of administration in such cases, the title related back to the date of the grant, which would have been after the issue of the writ. This had the effect of removing the grave injustice caused by such decisions as Ingall v Moran [1944] 1 All ER 97, [1944] KB 160, Hilton v Sutton Steam Laundry (a firm) [1945] 2 All ER 425, [1946] KB 65, Burns v Campbell [1951] 2 All ER 965, [1952] 1 KB 15, Finnegan v Cementation Co Ltd [1953] 1 All ER 1130, [1953] 1 QB 688.

Civil Procedure Rules

[35] The Civil Procedure Rules were introduced in 2000 to replace the Rules of the Supreme Court. By CPR 17.4, as amended by r 7 of the Civil Procedure (Amendment) Rules 2001, SI 2001/256:

'(2) The court may allow an amendment whose effect will be to add or substitute a new claim, but only if the new claim arises out of the same facts or substantially the same facts as a claim in respect of which the party applying for permission has already claimed a remedy in the proceedings …

(4) The court may allow an amendment to alter the capacity in which a party claims if the new capacity is one which that party had when the proceedings started or has since acquired.'

(Rule 19.5 specifies the circumstances in which the court may allow a new party to be added or substituted after the end of a relevant limitation period.)

[36] CPR 19.5, as amended by r 8 of the Civil Procedure (Amendment) Rules 2001, SI 2001/1256, provides so far as material as follows:

'(1) This rule applies to a change of parties after the end of a period of limitation under—(a) the Limitation Act 1980; (b) the Foreign Limitation Periods Act 1984; or (c) any other enactment which allows such a change, or under which such a change is allowed.

(2) The court may add or substitute a party only if—(a) the relevant limitation period was current when the proceedings were started; and (b) the addition or substitution is necessary.

(3) 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 … '

(Rule 17.4 deals with other changes after the end of a relevant limitation period.)

[37] In 2001 the Law Commission, Limitation of Actions (Law Com no 270) recommended that the addition of new claims made between parties to existing proceedings after the expiry of the limitation period relevant to the new claim should be permitted where (1) the new claim arises out of the conduct, transaction or events on which a claim in the existing proceedings is based; and (2) the existing proceedings are commenced within the relevant limitation period: para 5.11 and draft Bill, cl 25(2). The Law Commission recommended that there should be no reform in relation to the addition of new claims to existing proceedings where the new claim involved the addition or substitution of new parties: para 5.19 and draft Bill, cl 25(3). The draft Bill contained among the conditions for amendment to add or substitute new parties, that—

'(c) the addition or substitution is necessary for the determination of a … civil claim previously made in the proceedings ("the existing claim"), and (d) the existing claim was not made after the end of any applicable limitation period …'

In November 2009 the government announced that it would not be introducing legislation to implement the Law Commission's proposals."

28. Mr Palmer Q.C. submitted that, as can be understood from the history, the overall requirements imposed by the Act and the Rules are aimed at errors in the constitution or formality of the action, relating to the parties joined to it, or the capacity in which they sued, which made the extant action unsustainable. The addition or substitution of parties had to be necessary to cure that defect.
29. Returning to the decision of the Supreme Court in Roberts v Gill [2011] 1 AC 240 the Claimant was the beneficiary under a will who brought a claim for damages in professional negligence against solicitors who had negligently handled the property of the estate of which he was a beneficiary. The action commenced was a personal claim, but when he realised that there might be problems in establishing a duty of care owed by the solicitors to him personally, rather than to the estate or its administrator, he sought to sue by way of a derivative action on behalf of the estate. However a derivative action could not be properly constituted without the addition of the administrator as a party. It was held that the addition of the administrator by amendment could not be permitted because as Lord Collins set out at paragraph 39:

"his joinder is not necessary for the purposes of the original action, namely [the claimant's] personal claim"

30. Mr Palmer Q.C. submitted that was equally the case here i.e. the joinder sought is simply not necessary for the purposes of the original action,

Respondents' submissions

31. Mr Mead submitted that Mr Palmer Q.C. relied upon an incorrect and unduly restrictive construction of what constitutes a claim and a cause of action for the purposes of section 35 Limitation Act 1980, and CPR 19.5.
32. It was his submission that substitution is permissible and appropriate in a case such as the present where the background and "underlying factual situation" remains the same: before and after the amendment. Here, the Claimants claim damages for personal injury loss and damage arising as a consequence of an accident in Romania caused by the negligence of the tortfeasor driver, Mr Bura. The Claimants tried by the claim as originally pleaded what Mr Mead referred to as the direct route to the insurer using the regulations. Such a claim was, given the face of the regulations, misconceived . However, he submitted that the Claimants can still gain satisfaction from this action i.e. the "original action" from the Defendant as it is the Road Traffic Insurer for the purposes of the Road Traffic Act 1988, and is liable to satisfy any judgment against the Estate of Mr Bura. As a result, Mr Mead submitted, the Defendant Insurer will remain involved in the case and liable to satisfy any judgment even if it is not possible to bring a direct right of action against the insurer as a named Defendant. So contrary to the appellant's submissions the step of substitution did indeed allow the original claim to be carried on and determined against the insurer.
33. In support of this proposition Mr Mead stated that section 35 required to be read with the dictum of Diplock LJ in Letang v Cooper [1965] QB 232 in mind; specifically the statement that "A cause of action is simply a factual situation the existence of which entitles one person to obtain from the court a remedy against another person." (242G-243A). This to be contrasted with various historic forms of action, for example trespass to the person or negligence
34. Mr Mead also relied upon Merrett v Babb [2001] EWCA Civ 214, [2001] QB 1174 which he submitted was an example of the court standing back and looking at the reality of the underlying facts and as a result what was properly to be considered the action
35. In considering these submissions I start with the development of the relevant limitation provisions as a starting point. Prior to the 1980 Act there was no provision corresponding to its s 35. Limitation was governed by the Limitation Act 1939. The general rule for actions founded on simple contract or tort was that they could not be brought after the expiration of six years from the date on which the cause of action accrued. I have little doubt that not infrequently the strict and unforgiving nature of that provision caused injustice ; most obviously where a Defendant was wrongly named in error. Hence the history set out by Lord Collins.
36. I was curious as to the complete set of prescribed circumstances contained in RSC Ord 15, r 6 which must have followed on from the report as Lord Collins did not set them all out. In paragraph 5.20 of its report, the Committee identified five examples of cases where, in its view, a new party should be capable of being added by way of amendment after a limitation period had expired:

(1) Where the plaintiff is beneficially entitled in equity and the person with the legal title is a necessary party to the action (for example, the equitable assignee of an action, who cannot sue without joining the legal assignor ...Performing Right Society Ltd v London Theatre of Varieties Ltd [1924] AC 1); the cestui que trust who cannot enforce a right of action against a stranger to the trust without joining the trustee (Harmer v Armstrong [1934] Ch 65));

(2) Where the plaintiff is one of two or more persons jointly entitled to a right and all of them must be joined in order that the right may be enforced (for example, an action to enforce a right vested in trustees) ...Luke v South Kensington Hotel Company [1879] 11 Ch D 121);

(3) Where the plaintiff is suing to enforce a public right and the action is one which ought to have been initiated by relator proceedings in the name of the Attorney General ...Devonport Corporation v Tozer (1903) 1 Ch 759);

(4) Where the plaintiff is a shareholder suing to enforce a right vested in the company and the company is a necessary party to the action ...Spokes v Grosvenor Hotel Company Limited [1897] 2 QB 124; cf Wallersteiner v Moir (No 2) [1975] QB 373);

(5) Where the plaintiff is suing to recover from persons jointly (but not also severally) liable to him and where his failure to join all of them would, as the law now stands, mean that the liability could not be enforced at all.

37. In paragraph 5.17 of the report these were categorised as cases where the existing formulation of the rule in RSC Ord 20, r 5(3) (as to the power to correct mistakes) might cause injustice, because it did not cover situations where the Claimant had made an error of law or procedure, the correction of which would not have caused anyone to be taken by surprise. The first four of these examples were cases where the Claimant's mistake related to his position as plaintiff. It was only in the last situation that the Committee felt that the Rules ought to permit the joinder of a new party as a Defendant.
38. What the Committee recommended was achieved in sections 35(3), (4), (5)(b) and (6)(b) of the 1980 Act. The procedural rules were then made in RSC Ord 15, rr 6(5)(a) and 6(6). Rule 6(6), unlike the current form of the CPR 19, specifically set out all the examples given by the Law Reform Committee in its report.
39. In due course, the rule-maker of the Civil Procedure Rules set out the equivalent provision in CPR 19.5:

"19.5(2) The court may add . . . or substitute a party only if –

(a) the relevant limitation period was current when the proceedings were started; and

(b) the addition or substitution is necessary.

19.5(3) The addition or substitution of a party is necessary only if the court is satisfied that . . .

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

40. For reasons unknown to me the rule-maker decided to omit the examples contained in RSC, Ord 15, r 6(6). However, as I have set out above the new rules cannot be construed so as to go outside the rule-making powers conferred by s 35.
41. The matters that I have set out support the general proposition advanced by Mr Palmer Q.C. that the sections within the 1980 Act in issue in this appeal allowing the addition or substitution of a party are necessarily restrictive as to the very limited circumstances in which it is permissible to deprive a Defendant of the accrued right of a limitation period. These sections are solely aimed at errors in the constitution or formality of the action, relating to the parties joined to it, or the capacity in which they sue or are sued, which made the extant action unsustainable. The addition or substitution of parties had to be necessary to cure some defect.
42. As against this background the direct question to be addressed is whether the substitution is necessary for the determination of the original proceedings or, in other words, whether the original claim could not be maintained or properly carried on without the substitution. It must be necessary for the maintenance of the existing action, not for the assertion of a new action. That this is so can be clearly seen from the most relevant and helpful authority; Roberts v Gill & Co [2011] 1 AC 240, in which three justices of the Supreme Court expressly stated that they were not prepared to allow what in effect they saw as a device. The existing action was a personal action that could be pursued and the joinder of the Personal representatives would be immaterial.
43. In Merrett v Babb [2001] EWCA Civ 214, [2001] QB 1174 the Claimant and her mother together bought a freehold property with an advance from a building society secured by a mortgage, the valuation necessary for the loan having been made by the defendant valuer. The Claimant alone brought proceedings against the Defendant claiming damages for negligence in relation to the valuation. The Court of Appeal held that, because the claim asserted was for the full amount of the loss, which had to be understood, on the facts, as a joint claim in respect of the loss suffered by both purchasers, the addition of the mother as claimant was necessary for the claim to be maintained or properly carried on. I consider this to be a case of a very different type to the present and it could not be said, as Mr Palmer Q.C. can submit here, that the claim for the full amount could simply continue without the substitution. It was a legal necessity for the claim as brought i.e. for the full sum.
44. Mr Mead stated that if the Defendants were correct, there would never be a circumstance where one Defendant could be substituted for another so as to correct a claim that legally was not sustainable, and the reference to substitution for these purposes would have no practical effect. However I note that neither the Committee nor O15 r6 identified substitution of Defendant as opposed to joining a new party to be sued jointly with the existing Defendant in circumstances where the failure to join the new party might render the claim unenforceable. Given the history of Section 35 and CPR19 as I have outlined I do not think that this submission assists the Claimants.
45. It appears to me that the distinctive feature of the present case is the liability of Sabre to satisfy any judgment obtained against the estate. However, this is post determination and Mr Mead's submission relies upon the conflating of the determination of an action with the process of recovery that follows it. I do not believe that this can be a correct approach. In many instances, when well into the life of an action, a Claimant may wish to pursue another party as ultimate recovery post judgment may be more likely than with a current Defendant. However, that cannot of itself merit substitution outside any relevant limitation period which would otherwise protect the party that is desired to be added. It would fundamentally attack the ability of any party to rely on a limitation defence. Whilst the powers under section 35 and CPR19.5 do permit the addition or substitution of a party after the relevant limitation period has expired, and in so doing do deprive that party of an accrued limitation defence, they are properly restrictive as to the circumstances when this is permissible. Further the potential for injustice must be borne in mind when interpreting their content. It appears to me that they have always been intended to be narrow gateways.
46. The plain reality is that the proposed substitution simply does not meet the necessary tests set out on any ordinary and the natural interpretation of section 35 and CPR 19.5. The intention as I have set out was never to facilitate a claim against a new party unless the circumstances met closely prescribed requirements. Here it simply cannot be said that the substitution of the estate is necessary for the determination of the original action. It may be thought necessary for effective recovery from an insurer; but that is a very different thing.
47. Accordingly I find that the Master fell into error when considering the wording of section 35 and CPR 19.5, and their application to the facts of this case.
48. However, Mr Mead submitted that in the event that this is the view of the Court the matter cannot rest there. It was his secondary argument that the interpretation which Master Eastman adopted was a purposive interpretation which, regardless of what would otherwise be the ordinary interpretation, should be allowed. He argued that such an interpretation would permit the Claimants a remedy in the circumstances that the 2002 Regulations do not properly implement Article 3 of the Fourth Motor Insurance Directive (2000/26/EC) so as to grant the Claimants a right directly to sue the Defendant insurer.
49. Whilst this argument was raised in Mr Mead's skeleton argument dated 1^st November 2012, the issue of purposive interpretation was only briefly mentioned and not fully developed before Master Eastman who made no reference to it in his judgment. There has also been no Respondent's notice. Nevertheless, Mr Palmer Q.C. was happy to respond to it without the need for further time or the preparation of written submissions.
50. It is necessary to set out the relevant framework.
51. The Fourth Motor Insurance Directive 2000/26 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles, and amending Council Directives 72/239/EEC and 88/357/EEC, provided in Articles 1 and 3 as follows:

"Article 1

Scope

1. The objective of this Directive is to lay down special provisions applicable to injured parties entitled to compensation in respect of any loss or injury resulting from accidents occurring in a Member State other than the Member State of residence of the injured party which are caused by the use of vehicles insured and normally based in a Member State.

Without prejudice to the legislation of third countries on civil liability and private international law, this Directive shall also apply to injured parties resident in a Member State and entitled to compensation in respect of any loss or injury resulting from accidents occurring in third countries whose national insurer's bureaux as defined in Article 1(3) of Directive 72/166/EEC have joined the Green Card system whenever such accidents are caused by the use of vehicles insured and normally based in a Member State.

…

Article 3

Direct right of action

Each Member State shall ensure that injured parties referred to in Article 1 in accidents within the meaning of that provision enjoy a direct right of action against the insurance undertaking covering the responsible person against civil liability."

52. By seeking to sue the insurer of the vehicle under the direct right of action under the 2002 Regulations, the Claimants were seeking to exercise their rights under domestic law to bring a direct claim against the insurer in respect of an accident which fell within the scope of Article 1(1) of the Directive, in accordance with the provisions of Article 3 of the Fourth Directive.
53. Mr Mead submitted that the our domestic Regulations under-implement the Directive because the direct right of action only applies where English insured vehicles have an accident in the United Kingdom, and the Claimants in this case have no direct right of action. He conceded that the Regulations, plain as they were on their face, could not be properly read so as to provide what he said was the necessary right. However he submitted that section 35 and CPR19.5 should be read so as to remedy the default.
54. I remind myself , as Lord Oliver of Aylmerton said in Litster v Forth Dry Dock and Engineering Co Ltd [1989] 1 All ER 1134 at 1140, [1990] 1 AC 546 at 559, that if appropriate a purposive construction will be applied to the legislation even though, perhaps, it may involve some departure from the strict and literal application of the words which the legislature has elected to use. In this regard, 'the national court goes much further in interpreting the enactment than it could conceivably go by the ordinary rules of interpretation' (see McCall's case [2009] 1 CMLR 1239 at [28] per Waller LJ). However, this exercise is not an untrammeled one. It does not require national courts to impose an artificial or strained interpretation of national law. The court remains engaged in an exercise in interpretation, not rewriting. As Advocate General Sharpston said in her opinion in Unibet (London) Ltd v Justitiekanslern Case C-432/05 [2008] All ER (EC) 453 at 468, [2007] ECR I-2271 at 2289 (para 55):

"In that case [Marleasing] the court ruled that, in applying national law, "the national court called upon to interpret it is required to do so, as far as possible, in the light of wording and the purpose of the" Community legislation. That caveat is in my view critical. The court does not require national courts to impose an artificial or strained interpretation of national law. As the court stated in [Murphy v Bord Telecom Eireann Case 157/86 [1988] IRLR 267, [1988] ECR 673], the duty applies "within the limits of [the national court's] discretion under national law". It is clear that the court envisages that in some circumstances it may not be possible to achieve by way of interpretation the result prescribed by the applicable Community law."

55. I have also been guided by the judgment of Lord Justice Aikens in Churchill Insurance Co Limited v Fitzgerald; Evans v Cockayne [2012] EWCA Civ 1166. He set out the principles; including restating those set out by Sir Andrew Morritt C in Vodaphone 2 v Revenue and Customs Commissioners ([2009] EWCA Civ 446, [2010] Ch 77 at 37-38, [2009] STC 1480.) as follows:

"VI PRINCIPLES OF INTERPRETATION OF NATIONAL LAWS WHICH ARE BASED ON EU DIRECTIVES

[46] This topic has to be examined on two levels. First it is necessary to consider, as a matter of EU law, the obligations of Member States with regard to the implementation of EU Directives. This involves, but is not limited to, EU law obligations of interpretation of national law by national courts when those national laws might touch on the implementation of EU Directives. Secondly, it is necessary to examine briefly what the English courts have held is the scope of the court's power to interpret national laws in order that they can be interpreted consistently with any EU Directive which the national laws are intended to implement.

[47] On the issue of Member States's obligations as a matter of EU law, the ECJ has stated that when an EU Directive imposes obligations on Member States and it is implemented by national legislation, there is a duty on Member States (imposed by what is now art 4(3) of the Treaty on European Union – the Maastricht Treaty 1992 – "TEU") to take all appropriate measures, whether general or particular, to ensure fulfilment of that obligation. This duty is binding on all the authorities of the Member States, including, in respect of matters within their jurisdiction, their courts. (Bernhard Pfeiffer et al v Deutsches Rotes Kreuz, Kreisverband Walshut eV: Case C-397/01 to C-403/01; [2004] ECR I-8835 at 110, [2005] IRLR 137, [2005] ICR 1307. This case developed principles stated in Marleasing SA v La Comercial Internacional de Alimentacion SA Case C-106/89 [1990] ECR I-4135 at 8-9, [1992] 1 CMLR 305, [1993] BCC 421.) Thus, when a national court has to apply the domestic provisions which have been specifically enacted for the purpose of transposing an EU Directive intended to confer rights on individuals, the national court must presume (in the light of what is now art 228 of the Treaty on the Functioning of the European Union – the Rome Treaty 1958 – "TFEU") that the Member State, following its exercise of the discretion afforded it under that Article, intended entirely to fulfil the obligations arising from the Directive concerned. (Ibid at 112.) Thus, when a national court applies domestic provisions enacted to implement a particular Directive, it must interpret that national law in conformity with Community law. In doing so the court must consider its national law as a whole in order to assess to what extent any particular national law may be applied so as not to produce a result contrary to that sought by the Directive. (Ibid at 115.) The national court must, of course, use interpretive methods recognised by its own national law. The court should use such interpretive methods so as, first, to avoid a conflict between the provision of the national law derived from the Directive and any other rules of domestic law; and, secondly, to reduce the scope of the other rule of domestic law in such a way as to be able to achieve the result sought by the Directive. (Ibid at 116.)

[48] These obligations of Member States are EU law obligations. This EU law principle of interpretation of national law that is intended to implement an EU Directive is often called the principle of "consistent interpretation". That principle is, however, subject to what the ECJ has called "the general principles of law, particularly those of legal certainty and non-retroactivity". (Kiriaki Angelidaki et al v Oranismos Noarkhiaki Aftodiikisi Rethimnis and Dimos Geropotamou: Cases C-378/07 to C-380/07 [2009] ECR I-3071 at 199, [2009] 3 CMLR 571.) Thus, as I understand it, when the national court undertakes its obligation to refer to the content of a Directive in order to interpret and apply the relevant national law that implements the Directive, the national court must not use that obligation as the basis for an interpretation of the national law that is obviously contrary to its own laws or in a way that would, retroactively, re-interpret other existing laws.

[49] The English courts have developed certain parameters for the interpretation of domestic statutes which can be used in order that the courts can fulfil the EU law obligations set out above as well as their obligation to interpret statutes consistently with the Human Rights Act 1998. These parameters were summarised by Sir Andrew Morritt C in Vodaphone 2 v Revenue and Customs Commissioners ([2009] EWCA Civ 446, [2010] Ch 77 at 37-38, [2009] STC 1480.) They were not in dispute before us, although their application to the present cases obviously is. It is easiest to set out the summary as given by the Chancellor, although I have used numbers rather than letters and I have incorporated into one paragraph the two paragraphs of his judgment where the summary is set out. Some of the principles are derived from cases concerning the effect of the Human Rights Act 1998 on the interpretation of domestic statutes. Again it was agreed that the principles set out in those cases applied equally to the interpretation of national laws which implement EU Directives.

[50] The parameters of interpretation are:

'The obligation on the English courts to construe domestic legislation consistently with Community law obligations is both broad and far-reaching. In particular [the obligation]:

(1) is not to be constrained by conventional rules of construction; (Pickstone v Freemans plc [1989] AC 66 per Lord Oliver of Aylmerton at 126B)

(2) does not require ambiguity in the legislative language; (Ibid; Ghaidan v Godin-Mendoza [2004] 2 AC 557 at 32 per Lord Nicholls of Birkenhead)

(3) is not an exercise in semantics or linguistics; (Ghaidan's case at 31 and 35 per Lord Nicholls; 48-49 per Lord Steyn; 110 – 115 per Lord Rodger of Earlsferry.)

(4) permits departure from the strict and literal application of the words which the legislature has elected to use; (Lister v Forth Dry Dock & Engineering Co Ltd [1990] 1 AC 546 at 577A per Lord Oliver of Aylmerton; Ghaidan's case at 31 per Lord Nicholls.)

(5) permits the implication of words necessary to comply with Community law obligations; (Lister at 577A per Lord Oliver; Ghaidan's case at 31 per Lord Nicholls.)

(6) [accepts that] the precise form of words to be implied does not matter; (Pickstone at 112D per Lord Keith of Kinkel; Ghaidan's case at 122 per Lord Rodger; R (IDT Card Services Ireland Ltd) v Customs& Excise Commissioners [2006] STC 1252 at 114 per Arden LJ)

7) [is only constrained] to the extent that the meaning should 'go with the grain of the legislation' and be 'compatible with the underlying thrust of the legislation being construed'; (Ghaidan's case at 33 per Lord Nicholls; Revenue and Customs Commissioners v EB Central Services Ltd [2008] STC 2209 at 81 per Dyson LJ)

(8) must not lead to an interpretation being adopted which is inconsistent with the fundamental or cardinal feature of the [national] legislation since this would cross the boundary between interpretation and amendment; (Ghaidan's case at 33 per Lord Nicholls and at 110 – 113 per Lord Rodger; IDT Card Services case at 82 and 113 per Arden LJ)

(9) cannot require the courts to make decisions for which they are not equipped or give rise to important practical repercussions which the court is not equipped to evaluate. (Ghaidan's case at 33 per Lord Nicholls and 115 per Lord Rodger; IDT Card Services case at 113 per Arden LJ)'

[51] The issue between the parties, who all accept that there has to be some notional verbal manipulation of the wording of s 151(8), is about how the obligation of conforming interpretation and the broad scope for interpretation of the Act are to be exercised. It is now necessary to consider the parties' rival arguments."

56. In my judgment the relevant provisions of the Limitation Act in issue in this case are clear, as is the "underlying thrust", as can be readily understood from their provenance and development. Further, the existence of the relevant limitation periods cannot be the subject of legitimate attack.
57. The interpretation adopted by Master Eastman would clearly go against the grain and be inconsistent with the fundamental features of the 1980 Act. It would require the necessarily restrictive elements to be simply ignored and as a result would significantly undermine the protection afforded by a limitation period.
58. It appears to me that the purposive interpretation urged upon me by Mr Mead would be applied to the wrong statute. The reality is that the problems faced by the Claimants in this case are of their own making by leaving matters to virtually the eve of the expiry of the limitation period. They would have avoided the problems now faced had they acted within the relevant limitation period. Any under-implementation is a wholly separate issue to the need to act within a relevant limitation period. Indeed, as Mr Mead has conceded that the 2002 Regulations cannot be read so as to give what he says is the required purpose, it would be a very strange result indeed that the Claimants could be saved from their clear effect when taken together with the relevant limitation period, by an unnatural reading of the Limitation Act.
59. In my judgment the interpretation which Master Eastman adopted cannot properly stand as a purposive interpretation. So Mr Mead's secondary line of argument fails

Conclusion

60. I acknowledge that disallowing the application for substitution may allow the insurer to obtain a windfall which arises due to what appears to be an under-implementation of the Fourth Motor Insurance Directive.
61. I also accept that the Claimants are now left to choose from a far from satisfactory range of options including a claim for professional negligence or pursuing a Francovich remedy.
62. However for the reasons that I have set out it is my judgment that Master Eastman fell into error in finding that he had the power to allow substitution. No question of discretion arises; he simply did not have the power. As a result this appeal must be allowed.
63. Once circulated and time for corrections has been given, this judgment will be handed down in the absence of the parties and the appeal then adjourned to allow the parties to consider the form of the order and any other consequential matters. Hopefully all matters can be agreed. If not I would be obliged for an agreed time estimate so that a hearing can be listed as soon as possible. For the avoidance of doubt, subject to its length, I am happy for such a hearing to take place over the phone.