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Cite as: [2018] CSOH 95, [2018] ScotCS CSOH_95

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OUTER HOUSE, COURT OF SESSION

[2018] CSOH 95

PD386/17

OPINION OF LADY CLARK OF CALTON

In the cause

KRISS SPENCER

against

RICHARD CRUDDAS AND OTHERS

Pursuer

Defenders

25 September 2018

Pursuer: Milligan QC; Slater & Gordon Lawyers

First and Second Defenders: Stuart QC; Gildeas

Summary

[1] In this action, the pursuer claimed that on 6 July 2014, he was a pillion passenger on

a motorbike driven by the first defender. As the first defender made to overtake a Toyota

MR2 motorcar driven by the third defender on the A836 Main Street, Castletown, the third

defender turned right. In the collision between the motorbike and the motorcar, the pursuer

sustained various injuries. Solicitors instructed by the pursuer sought to raise an action

under chapter 43 procedure claiming damages jointly and severally from four defenders:

the driver of the motorbike as the first defender; the first defender’s insurers as the second

defenders; the driver of the motorcar as the third defender; and the third defender’s

insurers as the fourth defenders. There were procedural problems encountered by the

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pursuer’s solicitors which commenced with difficulties in effecting service on the third

defender of a summons signetted on 16 June 2017 (“the first summons”). Thereafter a

further summons was signetted on 20 September 2017 and that summons is the basis of the

present action.

[2] The issue before the court at the procedure roll debate was whether the present

action should be allowed to proceed in terms of section 19A of the Prescription and

Limitation (Scotland) Act 1973 (the 1973 Act). It was not disputed that the present action

was time barred under section 17 of the 1973 Act as it was commenced more than three

years after 6 July 2014. Counsel were agreed that no proof about the procedural history was

necessary and that the relevant facts were sufficiently clear from the pleadings and the

further information advanced by agreement in the oral submissions. By the date of the

procedure roll, the pursuer, the third and fourth defenders had agreed by joint minute to

settle the action extrajudicially and the third and fourth defenders had been assoilzied from

the conclusions of the summons. The present action therefore proceeded only against the

first and second defenders who maintained the claim was time barred and should not be

allowed to proceed.

The procedural history

[3] This is not a claim which in any sense could be regarded as a stale claim in relation to

the first and second defenders. It was a claim in which there was active engagement by the

solicitors for the pursuer and the first and second defenders from an early date. The initial

focus of the pursuer’s claim appeared to have been in relation to the third and fourth

defenders and that claim was intimated to the fourth defenders in or about April 2015. In or

about June 2015, the fourth defenders indicated that the second defenders would deal with the

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pursuer’s claim albeit liability remained in dispute as between the defenders. Intimation was

made to the second defenders by the pursuer’s solicitors in about July 2015. After

investigation in or about January 2016, the pursuer’s solicitors requested an interim payment

of £5,000 from the second defender’s solicitors. In or about March 2016 an offer of an interim

payment of £2,000 was made. The pursuer’s solicitors sent the second defenders’ solicitors a

copy of various expert reports and information about the pursuer’s wage loss. The second

defenders made an interim payment to the pursuer of £5,000 in about May 2016. Thereafter

the second defenders arranged an appointment with a consultant orthopaedic surgeon for

24 October 2016 and the pursuer attended for examination. Further medical records were

provided to the second defenders’ solicitors by the pursuer’s solicitors. There were problems

about valuation of damages because the pursuer required to undergo surgery and the

solicitors of the second defenders were so advised. “The first summons” in name of the

pursuer citing all four defenders was signetted on 16 June 2017. On or about 23 June 2017, the

second defenders’ solicitors wrote to the pursuer’s solicitors with acceptance of service

endorsed on behalf of the first and second defenders. On or about 26 June 2017 the pursuer’s

solicitors sent a postal citation to the third and fourth defenders. On or about 29 June 2017 the

pursuer’s solicitors gave instructions to their court runner to lodge “the first summons” for

calling on 17 July 2017 but that was unsuccessful. At some date after 1 July 2017 the citation

for the third defender was returned by the court with no answer. The action was served on

the fourth defender. On or about 3 July 2017, the second defenders’ solicitors sent defences to

the pursuer’s solicitors. A further attempt was made to serve “the first summons” by post on

the third defender on or about 7 July 2017 but this was returned unserved on or about 20 July

2017.

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[4] On 20 July 2017 the second defenders’ solicitors wrote to remind the pursuer’s

solicitors that they had said that “the first summons” would be lodged for calling on 17 July.

On or about 3 August 2017, a further unsuccessful attempt was made on behalf of the

pursuer’s solicitors to lodge “the first summons” for calling at the General Department. The

General Department would not allow the summons to be lodged for calling without service

having been effected on the third defender. According to counsel for the pursuer, due to

administrative oversight, no motion was made to extend the period for lodging the

summons for calling. He explained that the solicitor dealing with the pursuer’s case had

been on holiday for a period and a mistake had been made.

[5] The service and calling of “the first summons” was regulated by Rule 43.3 which

states:

“43.3.- (1) Where a summons in an action to which this Chapter applies is to be

executed, a copy of the summons which has passed the signet shall be –

(a) served on the defender with a citation in Form 43.3 attached to it;

and

(b) intimated to any person named in a warrant for intimation.

(2) Where a summons has not called within three months and a day after the

date of signeting, the instance shall fall.

(3) Where a summons cannot be served within the period of notice

determined in accordance with rule 13.4 and called before the expiry of the

period mentioned in paragraph (2), the court may –

(i) on the application of the pursuer by motion; and

(ii) on cause shown.

extend that period.

(4) An application under paragraph (3) shall be made before the expiry of the

period mentioned in paragraph (2).”

The instance of “the first summons” fell on 19 September 2017 and the second defenders’

solicitors so advised the pursuer’s solicitors on 20 September 2017. The pursuer’s solicitors

arranged for a further summons to be signetted on 20 September 2017. The terms were the

same except the name and address of the second defenders differed. The second defenders’

solicitors accepted service of the summons on behalf of the first and second defenders on or

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about 26 September 2017. The pursuer’s solicitors instructed messengers-at-arms to serve

the summons on the third defender and service was effected. Counsel for the pursuer

explained that this had not been done previously as there were some additional costs

attached to service by messengers-at-arms. Postal service was effected on the fourth

defenders. The second summons was successfully lodged for calling on 23 October 2017.

Submissions by counsel for the first and second defenders

[6] Counsel for the first and second defenders sought dismissal of the action and

submitted that the court should not grant the pursuer a remedy under section 19A of the

1973 Act. He highlighted the history of inactivity by the pursuer’s solicitors and he submitted

that the pursuer’s remedy lay against his solicitors. The main challenge was to the pursuer’s

averment that the defenders would not suffer prejudice. He sought to rely on well-established

Inner House authority in which the courts have recognised that defenders who are denied the

benefits of the statutory time bar, which provides a complete defence, are prejudiced. Counsel

having drawn attention to the procedural history submitted there was nothing in the present

case to remove it from the class of cases where the courts have refused to exercise discretion in

favour of the pursuer because an alternative remedy exists. Although it was accepted that the

principles illustrated in the case law should not be rigidly applied, the cases illustrate a clear

approach which the Inner House have supported and applied over the years. Consistency

was important in this area of law. Reference was made to Donald v Rutherford 1984 SLT 70,

Lord Cameron at page 77: Forsyth v A F Stoddard & Co Ltd 1985 SLT 51, Lord Justice Clerk

(Wheatley) pages 54-55; Lord Hunter page 56: Clark v McLean 1994 SC 410: and Jacobson v

Chaturvedi [2017] CSIH 8, Lord President (Carloway) paragraphs 15-19. As a recent example

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of decision making, in the Outer House upholding the defenders’ time bar plea, I was referred

to Grant Gordon v Durham City Transport Ltd, 11 October 2017.

[7] Counsel submitted that on the facts and circumstances of the present case, there was

plainly a strong case against the pursuer’s solicitors based on professional negligence. The

importance of time bar provisions were well-recognised and there had been a number of

opportunities and strategies available to the pursuer’s solicitors to deal with the problems.

The pursuer’s claim for damages in respect of a road traffic accident had no complexity.

Matters had now resolved to the extent that the liability of the first and second defenders to

make reasonable reparation to the pursuer in respect of loss, injury and damage arising from

the accident is admitted at page 21C-D of the record subject to the time bar which is insisted

on. There would be no significant prejudice to the pursuer in having to seek a remedy against

his solicitors.

Submissions by counsel for the pursuer

[8] In his primary submission, counsel for the pursuer invited the court to exercise its

discretion to allow the action to proceed and determine the matter on the procedure roll

without the need for hearing evidence. He discussed the timeline and made some general

observations in relation to section 19A of the 1973 Act, which I did not consider to be in

dispute. Counsel submitted that on the facts of this case I should determine what would be

equitable in all the circumstances and consider in particular what prejudice, if any, resulted

to the defenders and to the pursuer. This case was unusual in that not only did the first and

second defenders receive “the first summons” within the triennium but they sent defences to

the pursuer’s agent before the triennium had expired. It was only due to a technicality that

formal service was not effected and the technicality related to problems of service on the

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third defender, not the first and second defenders. Counsel accepted that the first and

second defenders had the loss of a “windfall” defence but this was outweighed by the real

prejudice which existed to the pursuer. The pursuer will lose his right of action against the

true wrongdoer, namely the first defender who has insurers. The fact that the pursuer may

have an alternative remedy against his solicitors is only one of a number of factors and is not

decisive. Reference was made to AS v Poor Sisters of Nazareth 2008 SC (HL) 146

paragraph 13. There were a number of reasons why equitable discretion should be exercised

in favour of the pursuer namely: interim damages were paid; liability is now admitted; any

action against the first and second defenders is very straight forward and quick; that is not

the case with an alternative action for professional negligence against the pursuer’s solicitors

as there would be further delay and problems with quantification; the progress of an action

of professional negligence would not have the advantages of chapter 43 or chapter 42A

procedure; there was no prejudice to the defenders in their investigation of the case as “the

first summons” was served within the triennium and defences prepared; in the whole

circumstances the delay was understandable and arguably excusable taking into account the

lack of clarity about the practice of Scottish Court Service in refusing to allow a summons to

call in circumstances where there are no clear rules about whether a summons can call

against one defender when another defender has not been served. Counsel submitted that

in any action against the pursuer’s solicitors, they may wish to explore the decision making

of the Scottish Court Service with consequent delays and problems for the pursuer. In

conclusion, counsel submitted that the error in this case was a highly technical error with

little delay involved and there would be an unduly harsh result for the pursuer not to be

able to proceed with an action against the first and second defenders when there was now

admitted liability.

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[9] In developing his oral submissions, counsel did not dispute the case law relied on by

counsel for the defenders but emphasised that there was no automatic rule or principle

favouring the defenders because there was an alternative remedy. He accepted that the

onus was on the pursuer to persuade the court that the equitable discretion should be

exercised in favour of the pursuer. Counsel referred to D Johnston, Prescription and

Limitation, second edition, chapter 13 relating to the exercise of the equitable discretion

under section 19A of the 1973 Act and adopted the criticisms made in paragraph 13.25 in

which the author questioned whether, if properly analysed, it can be concluded that there is

prejudice to a defender in circumstances where the protection of section 17 is the only loss

and not any loss occasioned by some additional factor such as loss of evidence in the face of

an old claim. Counsel submitted that in the present case there was justification for allowing

liability to fall on the person responsible for the accident (and his insurers) rather than the

pursuer’s solicitors (and their insurers) based on a technical error or errors in the pursuit of a

claim. Counsel also drew attention to some of the criticisms made by Lady Justice Hale in a

lecture dated 20 May 2014, to the effect that there are difficulties and limitation where

reliance is placed on an alternative rather than a direct remedy and he adopted her views

into his submissions. As an example of a decision in a similar case where the equitable

discretion was exercised in favour of the pursuer, reference was made to Lois Pack or Clark v

West Dumbartonshire Council, a decision of the sheriff court (61/13).

[10] I was advised in oral submission that the second defenders were now in bankruptcy

and a joint minute of agreement was lodged to the effect that the parties are agreed that:

“1. On 8 May 2018 the second defenders were put into bankruptcy with Boris K

Frederiksen, Vester Farimagsgade 23, 1606 Kobenhavn V, being appointed

the trustee in the Bankrupt Estate. Claims intimated to the second defenders

prior to or for a defined period after said bankruptcy would, in the

appropriate circumstances, be met by the Danish Guarantee Fund for Non-

Life Insurance Companies (‘the Guarantee Fund’). Claims made against

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bankrupt insurance companies are transferred to other non-life insurance

companies to administer. Any damages paid by the Guarantee Fund are met

though contributions made into the fund by non-life insurance companies

authorised by the Danish Financial Supervisory Authority.

2. The second defenders have made a number of interim payments and in the

event that this action is time barred the second defenders waive their right to

repayment …”

Decision and reasons

[11] There was no significant dispute about the law. The cases cited were helpful but

turned on their own facts and circumstances. I consider that section 19A gives the court

very wide discretion to be exercised within the context of the particular facts and

circumstances of the individual case. For policy reasons Parliament has made certain

decisions about time limits. Although discretion is given to the court, I consider that it is

important to recognise that the statutory scheme set out in the 1973 Act does give important

protection to defenders. Counsel for the pursuer made a powerful submission. Part of the

history which I considered to be of particular importance was the early history of

engagement about the claim between the pursuer’s solicitors and the solicitors of the first

and second defenders; the payment of interim damages; the timeous service of the

summons on the first and second defenders; the ability of the first and second defenders to

draft defences; and the fact that liability is now admitted.

[12] When I considered the availability of a remedy for the pursuer against his solicitors, I

was persuaded that there is a very strong prima facie case of professional negligence. It is not

clear what any defence might be to such a claim and none was suggested which would

avoid all liability. There was a possibility raised of defending any action of professional

negligence in whole or in part on the basis of a challenge to the decision making of the

General Department. Even if such a challenge was well founded, I am of the opinion that

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the decision making by the pursuer’s solicitors about the mode and timing of service and the

clear problems which had arisen had nothing to do with any decision by the General

Department. I considered that there were a number of actions over a period which the

pursuer’s solicitors could have taken to avert the time bar problem.

[13] I also take into account that there was active engagement on behalf of the first and

second defenders and the defenders’ solicitor took positive steps to alert the pursuer’s

solicitors to the calling date they had planned. The joint minute clarified that the defenders

do not seek repayment of any interim payments in the event that the action is time barred.

[14] I accepted that in practice there may be some delay and uncertainty for the pursuer if

he requires to pursue an alternate remedy but in a case such as this I do not regard that as

serious prejudice. I am not persuaded that the assessment of damages in relation to the

pursuer could be a difficult exercise even taking into account the bankruptcy of the second

defenders and any arrangements consequent thereon. Liability in relation to the accident is

admitted. In this case, I would expect the pursuer’s solicitors or their insurers to take a

pragmatic approach. It is not a case in which I anticipate that the pursuer would lack a

remedy or have that remedy long delayed.

[15] I considered there was some force in the submission by counsel for the pursuer that

there is merit in liability falling on the wrongdoer who has negligently caused loss, injury

and damage in a road traffic accident rather than a solicitor who has made an error or errors

in administration or decision making in relation to pursuit of a claim with resulting time bar

problems. In the circumstances of this case, however, this is not a factor which tips the

balance in favour of the pursuer. Parliament enacted specific limitation and prescription

provisions to give protection to wrongdoers and there are complex policy reasons for this.

The first and second defenders appear to have engaged with the action and complied with

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the rules of procedure and will suffer significant prejudice if they lose the protection of the

statutory time bar provisions. I consider the prejudice to the defenders would outweigh the

prejudice to the pursuer in this case.

[16] Taking into account all the circumstances, I am not persuaded that it is equitable to

allow the pursuer to bring this action. Accordingly the action is dismissed.