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Simon O’Dwyer succeeds on appeal against a refusal to make a finding of abuse of process and impose sanctions in accordance with the principles set out in Barry Cable v Liverpool Victoria Insurance Company Limited [2020] EWCA Civ 1015

On 3rd December 2021, Her Honour Judge Fine sitting in the County Court at Nottingham allowed the appeal of Defendant in Yates v Pontes against the refusal of Deputy District Judge Smith to find an abuse of process and to impose consequential sanctions in accordance with the principles set out by the Court of Appeal in the case of Barry Cable v Liverpool Victoria Insurance Company Limited [2020] EWCA Civ 1015.

The Facts

The case concerns an accident that occurred as long ago as July 2014. The Claimant submitted a claim via the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (“the Protocol”). Liability was admitted and the matter proceeded to Stage 2. However by the expiry of limitation the Claimant had not submitted a Stage 2 pack and issued a claim in June 2017 pursuant to paragraph 16 of the Practice Direction to Part 8 seeking a stay of the proceedings purportedly in order to progress the matter within Stage 2.

In September 2020, almost 3 years later, the Claimant issued an application to transfer the matter to Part 7 on grounds that it was no longer suitable to remain within the Protocol. In accordance with the principles set out by the Court of Appeal in Barry Cable v Liverpool Victoria Insurance Company Limited [2020] EWCA Civ 1015 the Defendant issued a cross application for a finding of abuse of process and consequential sanctions.

In advance of the hearing before DDJ Smith in April 2021, the Defendant made repeated requests to the Claimant to provide full draft Part 7 proceedings (to include an amended Claim Form, Particulars of Claim, a Schedule of Special Damages and copies of the medical reports that were being relied upon) so the Defendant and the Court could consider the nature and scope of the claim that was being advanced by the Claimant. The Claimant failed to file and serve the full draft Part 7 proceedings in advance of the hearing.

Accordingly a preliminary issue arose at the hearing before DDJ Smith in respect of such draft Part 7 proceedings. The Defendant sought an adjournment with an unless order that the Claimant file and serve full draft Part 7 proceedings or the claim be struck out with the applications to be relisted thereafter.

DDJ Smith refused the Defendant’s application and concluded that the Court had sufficient evidence before it within the contents of the witness statements that had been provided by the parties to properly consider the issue of transfer. DDJ Smith rejected the Defendant’s argument that the contents of the draft Part 7 proceedings were central to the question of whether there had been an abuse of process and whether the Claimant’s solicitors knew or ought to have known that the claim was no longer suitable for the Protocol at the time of issue.

DDJ Smith went on to find that there had not been an abuse of process and that the Claimant’s solicitors did not know nor should they ought to have known the claim was unsuitable for the Protocol when it was issued Part 8.

DDJ Smith transferred the claim and ordered that the Defendant pay the Claimant’s costs of the applications with the balance of the costs of the action being costs in the case.

The Defendant appealed on the following grounds:

  1. DDJ Smith was wrong to refuse the Defendant’s preliminary application to adjourn the hearing and make an Order/Unless Order that the Claimant should file and serve full draft Part 7 pleadings prior to the determination of the Defendant’s application.
  2. DDJ Smith failed to follow and apply the binding Court of Appeal authority of Barry Cable v Liverpool Victoria Insurance Company Limited [2020] EWCA Civ 1015 when refusing the Defendant’s application for a finding of abuse of process and the imposition of appropriate sanctions. In failing to follow and apply the ratio of a decision of a Senior Court the Learned Deputy District Judge erred in law and his decision was in any event wrong.

The Designated Civil Judge, His Honour Judge Godsmark Q.C. granted permission to appeal on the papers and Her Honour Judge Fine heard the appeal on 3rd December 2021.

The Appeal

Ground 1

On appeal the Defendant submitted that the contents of the draft Part 7 proceedings were central to the question of whether there had been an abuse of process on grounds that the Claimant’s solicitors knew or ought to have known the claim was unsuitable to continue within the Protocol at the time it was issued via Part 8.

In the interim between the hearing before DDJ Smith and the hearing of the appeal, the Claimant, in compliance with directions made by DDJ Smith at the conclusion of the first instance hearing, served the Part 7 proceedings. These contained unquantified claims for, amongst other heads of loss, claims for past and future loss of earnings and disadvantage on the open labour market. The Defendant successfully argued that the contents of the pleadings demonstrated their crucial importance to the determination of the question of abuse of process. HHJ Fine allowed the appeal in respect of Ground 1 and found that DDJ Smith was wrong to not have adjourned the hearing. HHJ Fine found that DDJ Smith should have done so whilst also ordering the Claimant to file and serve such draft Part 7 proceedings prior to the applications being relisted.

Ground 2

HHJ Fine proceeded to exercise her discretion afresh in respect of Ground 2 and found, primarily on the contents of the Part 7 proceedings and especially the Schedule of Special Damages, that the Claimant’s solicitors ought to have known at the time the claim was issued via Part 8 and stayed that the value of the claim, on the Claimant’s case, exceeded the upper limit of the Protocol. Accordingly the decision of DDJ Smith was wrong and the appeal was also allowed in respect of Ground 2.

The Result

Having reached a different view on the question of whether there had been an abuse of process, HHJ Fine then proceeded to consider the issue of appropriate sanctions. In accordance with the decision of the Court of Appeal in Cable, the Defendant sought two consequential sanctions:

  1. The Claimant pay the Defendant’s costs up to and including the hearing before DDJ Smith on the indemnity basis to be subject to detailed assessment in default of agreement. For the avoidance of doubt the Claimant shall not recover any costs from the Defendant to the same date.
  2. Any claim for interest on special damages shall be disallowed up to and including the same date.

HHJ Fine set aside the costs provisions of the Order of DDJ Smith and imposed the sanctions above.

The net effect of the same is a very significant saving for the Defendant in that the Defendant will now not be liable for the Claimant’s costs from the date of the accident to the date of transfer (a period of almost 7 years). Rather the Claimant will now have to pay the Defendant’s costs of that period, on the indemnity basis, which will be capable of enforcement up to the aggregate amount of any award for damages at the conclusion of the action pursuant to CPR 44.14.

HHJ Fine also ordered the Claimant pay the Defendant’s costs of the appeal which will be similarly capable of enforcement as above.

Furthermore the Defendant will not be liable for any interest on special damages up to and including the date of transfer (a period of almost 7 years).

This is thought to be the first appeal following the handing down of judgment in Cable in July 2020 and is very important for those dealing with such applications for a finding of abuse of process and sanctions in claims which have been incorrectly stayed via Part 8 rather than issued via Part 7.

The draft Part 7 proceedings are often central to establishing the date at which the Claimant’s solicitors ought to have identified the claim was no longer suitable to continue within the Protocol. Accordingly they are usually the most useful documents to assist the Defendant in seeking a finding of abuse of process.

This judgment confirms that the Claimant should file and serve full draft Part 7 proceedings including an amended Claim Form, Particulars of Claim, a Schedule of Special Damages and copies of the medical evidence upon which they seek to rely alongside any application to transfer and certainly in advance of any contested application.

It also demonstrates the potentially significant savings which remain available in such cases where a finding of abuse of process is successfully obtained.

Simon O’Dwyer instructed by John Lezemore, DWF London, acted for the successful Appellant/Defendant.



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