HARTLEY V BIRMINGHAM CITY DISTRICT COUNCIL [1992] 2 All ER 213
FACTS:-
The Claimant was injured on the 10th December 1986 when she suffered an accident whilst visiting school premises owned and occupied by the Defendants. A claim was promptly notified to the Defendants and in October 1987 an offer was made to settle the claim. The limitation period expired on the 11th December 1989, but the Claimant’s solicitors did not issue proceedings until the following morning, one day out of time.
The Defendants accepted liability for the accident, whilst the Claimant accepted that if the time limit were disapplied, she would have an unanswerable claim against her solicitors. The District Registrar struck out the claim and that decision was upheld by the High Court. The Claimant appealed to the Court of Appeal.
JUDGMENT:-
Lord Justice Parker considered the provisions of Section 33 of the Limitation Act 1980. He considered each of the factors under Section 33(3) to be taken into account.
In relation to paragraph (a), the issue of delay, the actual delay was a matter of hours only and the reason for the delay was a slip on the part of the solicitors. In relation to (b), the cogency of the evidence, this was wholly unaffected by the delay. In relation to paragraph (c) no criticism could be made of the Defendant’s conduct. Paragraph (d) of Section 33(3) did not apply and in relation to paragraph (e), the Claimant acted with unusual promptness. In relation to paragraph (f) it could not be suggested that the Claimant should have taken advice earlier.
If the action were not allowed to proceed, the Claimant would be deprived, through no fault of her own, of an action to which there was no defence on liability. However she would have an equal (and possibly better) claim against her solicitors.
In Firman v Ellis [1978] 2 All ER 851 the court had to consider Section 2D of the Limitation Act 1939 as amended by the Limitation Act 1975, which section was replaced without material change by Section 33 of the Limitation Act 1980. In that case proceedings had been issued in time, but not served within the period for service. Therefore the proceedings were re-issued and served. Lord Denning said that this was not a game of cards, where one side called “snap”. The reason for the error had been an unfortunate slip as a result of which the renewal date had been missed by one day. Discretion was exercised in the Claimant’s favour. Ormrod LJ in the same judgment said that if the Claimant had to start a new action against his own solicitors in professional negligence, he might well suffer prejudice.
However Firman was impliedly overruled by Walkley v Precision Forgings Ltd [1979] 2 All ER 548. Since that time, the question of the proper application of the power to disapply limitation provisions had been considered by the House of Lords on two occasions. In Thompson v Brown Construction (Ebbw Vale) Ltd [1981] 2 All ER 296 Phillips J had held that it was obliged to refuse an application to disapply the relevant limitation provision by the decision of the Court of Appeal in Browes v Jones & Middleton (a firm) (1979) 123 SJ 489 on the grounds that if the action were not allowed to proceed the Claimant would have an unanswerable claim against her solicitors. The period of the delay after expiry of limitation was some five weeks. However the Claimant appealed to the House of Lords, who allowed the appeal, remitted the case back down to Phillips J who then disapplied the limitation provisions.
The House of Lords had said in Thompson that if the time elapsed after the expiration of the primary limitation is very short, what the Defendant loses in consequence of a direction might be regarded as being in the nature of a windfall, unless the Claimant’s prospects of success in the action (if it was allowed to proceed) were so hopeless as to deprive it even of nuisance value. The degree to which the Claimant would be prejudiced by being prevented from proceeding with his action would be affected by how good or bad would have been his prospects of success. Even if the Claimant would have a cast iron case against his solicitor, some prejudice (albeit minor) would be suffered by him. He would be obliged to find and to instruct new and strange solicitors, there would be delay, he would incur a personal liability for costs of the action up to the date of the court’s refusal to give a direction waiving limitation and he might prefer to sue a stranger who is a tortfeasor with the possible consequence that might have on the tortfeasor’s insurance premiums rather than sue his own solicitors with corresponding consequences on their insurance premiums.
Parker LJ said that the House of Lords had established the following propositions:-
Parker LJ also referred to the case of Donovan v Gwentoys Ltd [1990] 1 All ER 1018. The Claimant had an accident on the 3rd December 1979, she attained her majority on the 25th April 1981, and limitation did not expire until the 25th April 1984. Proceedings were not issued until the 10th October 1984 some 5 ½ months later. It was preceded by a letter before action dated 20th September 1984.
The House of Lords had said that the primary purpose of the Limitation Act 1980 was to protect Defendants against stale claims. In this case, the Defendants were faced with a claim first made on them five years after the actual event and it would be absurd if a court could not take the whole period of the delay into account. The time for notification of the claim (i.e. the letter of claim) was an extremely important consideration, and it must be relevant when the Defendant first had notification of the claim and thus the opportunity he would have to meet the claim at trial.
In this case, Parker LJ said that the judge had misdirected himself. The error giving rise to the windfall was harmless. If the discretion was not to be exercised in favour of the Claimant, Parker LJ would find it difficult to envisage circumstances in which it could ever be so exercised. Therefore in this case section 11 of the Limitation Act 1980 would be disapplied.
Parker LJ said that the stronger the Claimant’s case, the greater the prejudice to him from the operation of the provision and the greater would be the prejudice to the Defendant if the provision was disapplied. Likewise the weaker the case of the Claimant the less he would be prejudiced by the operation of the provision and the less would be the Defendant prejudiced if it was disapplied.
In Parker LJ’s view, the prejudice resulting from the loss of the limitation defence would always or almost always be balanced by the prejudice to the Claimant from the operation of the limitation provision, and therefore the loss of the defence as such would be of little importance. What was of paramount importance was the effect of the delay on the Defendant’s ability to defend.
It was also legitimate to take into account, when considering prejudice to the Claimant, that he will have a claim against his solicitors. It would also be legitimate to take into account that the Defendant was insured, and if he was deprived of his fortuitous defence then he would have a claim on his insurers.
Finally there would be prejudice to the Claimant even if he had a cast iron claim against his solicitors, insofar as he did have an action against a tortfeasor, who may know little or nothing about the weak points of his claim, to an action against his solicitors who would know a great deal about them. The prejudice might well be major rather than minor.
Leggatt LJ agreed.
FACTS:-
The Claimant was injured on the 10th December 1986 when she suffered an accident whilst visiting school premises owned and occupied by the Defendants. A claim was promptly notified to the Defendants and in October 1987 an offer was made to settle the claim. The limitation period expired on the 11th December 1989, but the Claimant’s solicitors did not issue proceedings until the following morning, one day out of time.
The Defendants accepted liability for the accident, whilst the Claimant accepted that if the time limit were disapplied, she would have an unanswerable claim against her solicitors. The District Registrar struck out the claim and that decision was upheld by the High Court. The Claimant appealed to the Court of Appeal.
JUDGMENT:-
Lord Justice Parker considered the provisions of Section 33 of the Limitation Act 1980. He considered each of the factors under Section 33(3) to be taken into account.
In relation to paragraph (a), the issue of delay, the actual delay was a matter of hours only and the reason for the delay was a slip on the part of the solicitors. In relation to (b), the cogency of the evidence, this was wholly unaffected by the delay. In relation to paragraph (c) no criticism could be made of the Defendant’s conduct. Paragraph (d) of Section 33(3) did not apply and in relation to paragraph (e), the Claimant acted with unusual promptness. In relation to paragraph (f) it could not be suggested that the Claimant should have taken advice earlier.
If the action were not allowed to proceed, the Claimant would be deprived, through no fault of her own, of an action to which there was no defence on liability. However she would have an equal (and possibly better) claim against her solicitors.
In Firman v Ellis [1978] 2 All ER 851 the court had to consider Section 2D of the Limitation Act 1939 as amended by the Limitation Act 1975, which section was replaced without material change by Section 33 of the Limitation Act 1980. In that case proceedings had been issued in time, but not served within the period for service. Therefore the proceedings were re-issued and served. Lord Denning said that this was not a game of cards, where one side called “snap”. The reason for the error had been an unfortunate slip as a result of which the renewal date had been missed by one day. Discretion was exercised in the Claimant’s favour. Ormrod LJ in the same judgment said that if the Claimant had to start a new action against his own solicitors in professional negligence, he might well suffer prejudice.
However Firman was impliedly overruled by Walkley v Precision Forgings Ltd [1979] 2 All ER 548. Since that time, the question of the proper application of the power to disapply limitation provisions had been considered by the House of Lords on two occasions. In Thompson v Brown Construction (Ebbw Vale) Ltd [1981] 2 All ER 296 Phillips J had held that it was obliged to refuse an application to disapply the relevant limitation provision by the decision of the Court of Appeal in Browes v Jones & Middleton (a firm) (1979) 123 SJ 489 on the grounds that if the action were not allowed to proceed the Claimant would have an unanswerable claim against her solicitors. The period of the delay after expiry of limitation was some five weeks. However the Claimant appealed to the House of Lords, who allowed the appeal, remitted the case back down to Phillips J who then disapplied the limitation provisions.
The House of Lords had said in Thompson that if the time elapsed after the expiration of the primary limitation is very short, what the Defendant loses in consequence of a direction might be regarded as being in the nature of a windfall, unless the Claimant’s prospects of success in the action (if it was allowed to proceed) were so hopeless as to deprive it even of nuisance value. The degree to which the Claimant would be prejudiced by being prevented from proceeding with his action would be affected by how good or bad would have been his prospects of success. Even if the Claimant would have a cast iron case against his solicitor, some prejudice (albeit minor) would be suffered by him. He would be obliged to find and to instruct new and strange solicitors, there would be delay, he would incur a personal liability for costs of the action up to the date of the court’s refusal to give a direction waiving limitation and he might prefer to sue a stranger who is a tortfeasor with the possible consequence that might have on the tortfeasor’s insurance premiums rather than sue his own solicitors with corresponding consequences on their insurance premiums.
Parker LJ said that the House of Lords had established the following propositions:-
- A direction under section 33 was always highly prejudicial to the Defendant
- The expiry of the period was always in some way prejudicial to the Claimant
- The extent of the prejudice will depend on the strength or otherwise of the claim or defence
- Even where the Claimant had a cast iron case against his solicitor, some prejudice, albeit it may be minor, will be suffered by the Claimant
- In exercising its discretion the court has not only to consider the respective degrees of prejudice to Claimant and Defendant but also the specific circumstances set out in Section 33(3).
- The court then had to consider whether it was equitable to allow the action to proceed
- Paragraphs (a) and (b) of Section 33(3) were the only two paragraphs which appeared to be dealing with matters that affected the extent to which the Claimant and the Defendant would be prejudiced according to whether or not the action was allowed to proceed
- Paragraphs (c), (e) and (f) of Section 33(3) were relevant to the question of whether it would be equitable to give a benefit to one party at the expense of the other.
Parker LJ also referred to the case of Donovan v Gwentoys Ltd [1990] 1 All ER 1018. The Claimant had an accident on the 3rd December 1979, she attained her majority on the 25th April 1981, and limitation did not expire until the 25th April 1984. Proceedings were not issued until the 10th October 1984 some 5 ½ months later. It was preceded by a letter before action dated 20th September 1984.
The House of Lords had said that the primary purpose of the Limitation Act 1980 was to protect Defendants against stale claims. In this case, the Defendants were faced with a claim first made on them five years after the actual event and it would be absurd if a court could not take the whole period of the delay into account. The time for notification of the claim (i.e. the letter of claim) was an extremely important consideration, and it must be relevant when the Defendant first had notification of the claim and thus the opportunity he would have to meet the claim at trial.
In this case, Parker LJ said that the judge had misdirected himself. The error giving rise to the windfall was harmless. If the discretion was not to be exercised in favour of the Claimant, Parker LJ would find it difficult to envisage circumstances in which it could ever be so exercised. Therefore in this case section 11 of the Limitation Act 1980 would be disapplied.
Parker LJ said that the stronger the Claimant’s case, the greater the prejudice to him from the operation of the provision and the greater would be the prejudice to the Defendant if the provision was disapplied. Likewise the weaker the case of the Claimant the less he would be prejudiced by the operation of the provision and the less would be the Defendant prejudiced if it was disapplied.
In Parker LJ’s view, the prejudice resulting from the loss of the limitation defence would always or almost always be balanced by the prejudice to the Claimant from the operation of the limitation provision, and therefore the loss of the defence as such would be of little importance. What was of paramount importance was the effect of the delay on the Defendant’s ability to defend.
It was also legitimate to take into account, when considering prejudice to the Claimant, that he will have a claim against his solicitors. It would also be legitimate to take into account that the Defendant was insured, and if he was deprived of his fortuitous defence then he would have a claim on his insurers.
Finally there would be prejudice to the Claimant even if he had a cast iron claim against his solicitors, insofar as he did have an action against a tortfeasor, who may know little or nothing about the weak points of his claim, to an action against his solicitors who would know a great deal about them. The prejudice might well be major rather than minor.
Leggatt LJ agreed.