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McDonnell & Anor v Walker, Court of Appeal, 24 November 2009

18 December 2009
The issues

Limitation – Limitation Act 1980, Section 33 – prejudice – Horton v Sadler.

The facts

On the 24th April 2001 the First Claimant was the driver of a car, and the Second Claimant a passenger, which was in an accident with a car driven by Richard Walker. Mr Walker was killed in the accident.

A letter of claim was written by Antony Hodari & Co on the 31st July 2001. On the 24th November 2001 Mr Walker’s road traffic insurers, Direct Line, accepted liability.

Medical experts had been agreed by April 2002 but both Claimants failed to attend appointments because they were at university and on working placements. In October 2003 a letter of instruction to another orthopaedic surgeon in Belfast was sent. Direct Line were being told that Antony Hodari & Co were having difficulties in getting in touch with the Claimants. Direct Line were also being told that there was no significant claim for special damages.

Eventually, appointments were made for both Claimants to see Mr Andrews on the 29th March 2004.

On 8th April 2004 the Claimant’s solicitors wrote to say they were issuing proceedings and asking for the correct name and address of the Defendant. On the 20th April 2004 the Claim Form was issued, limited to £15,000.00.

The handler at the Claimant’s solicitors incorrectly diarised the date for service as 26th August 2004. Proceedings were served on 23rd August 2004, 1 day late.

The point was taken by the Defendants and a retrospectively made Application for an extension of time for service was refused in January 2005. At that time Walkley v Precision Forgings Ltd was still good law and the Claimant was barred from bringing a second action. Subsequently, the Claimants changed solicitors. In June 2006 the House of Lords departed from Walkley in Horton v Sadler. The new solicitors however chose to pursue a claim against Antony Hodari & Co for professional negligence.

In September 2007 Mr Andrews prepared fresh reports on the Claimants and in October 2007 both Claimants were examined by a psychiatrist. On the 17th April 2008 a second action against the Estate of Richard Walker was commenced and an Application was made to disapply the limitation period under Section 33 in that case. The Claim Form in the second action stated that the First Claimant expected to recover damages of more than £300,000.00 and the Second Claimant more than £100,000.00 but less than £300,000.00. The Judge allowed the Application to disapply the limitation period.

The Defendants Appealed.

The decision

The Judge had failed to identify the correct period of delay. Section 33(3) of the Limitation Act 1980 set out the circumstances that the Court should have regard to in particular. Amongst those was, at (a) the length of and the reasons for the delay on the part of the Claimant and (b) the extent to which, having regard to the delay, the evidence adduced or likely to be adduced by the Claimant or the Defendant is or is likely to be less cogent than if the action that had been brought within the time allowed by Section 11. The delay referred was the delay since expiry of the limitation period. However, the overall delay was also relevant as part of the circumstances of the case. The Judge appeared to concentrate on the 22 month period following the decision in Horton as the most material and his Judgment appeared to suggest that, provided there was no delay post Horton, a Claimant should be able to succeed in the disapplication of the limitation period in any section action. That totally misunderstood the effect of Horton where the disapplication was granted in circumstances where a Defendant could show no forensic prejudice whatsoever. Cane v Francis was another decision which similarly supported the disapplication in a second action where there was no forensic prejudice. If there was forensic prejudice however, and if that prejudice was caused by inexcusable delay, and where there was little or no prejudice to a Claimant with an action against its solicitors, the position would almost certainly be different.

The Judge’s approach to forensic prejudice was also flawed. He suggested that there was correspondence during the period of 3 years from the accident and that it was for the Defendant’s insurers to investigate. However, until the insurers had details of the claim being made, they were in no position to investigate. Reports relevant to general damages had been received 3 years after the accident and no psychological report was received at that time and no claim for loss of earnings, present or future, was received at all. The claim that had been received 7 years after the accident was of a different magnitude. Clearly, forensic prejudice had been suffered by the Defendant’s insurers.

The Judge had misdirected himself and the Court of Appeal therefore had to revisit the question as to whether it was appropriate to disapply the limitation period under Section 33. In both Horton and Cane there was no forensic prejudice. There was in this case. Direct Line were not in a position to examine the claim as now made by the Claimants prior to service of the first proceedings. They had no claim for loss of earnings, past or future. In the second action they were faced with a claim of a different dimension and they clearly suffered a forensic disadvantage in having to examine the claim as now made from a “standing start”. It could not be said that it was their fault that they did not carry out investigations until they had details of the claim.

If the delay had caused forensic prejudice, the Court had to consider the cause of the delay. If the delay was excusable, and on balance it was still possible to have a fair Trial, then it might be just and fair to allow the action to proceed. If however the delay had caused unfairness to the Defendant in his ability to investigate, and there was no excuse for the delay, the action should not be allowed to proceed. In a case where there had been inexcusable and lengthy delay in a Claimant notifying a Defendant as to his case on liability or quantum and there had been negligence in issuing the proceedings or in serving them on time, then that was a situation in which it almost spoke for itself that a Defendant had suffered forensic disadvantage and a Claimant was unlikely to suffer prejudice.

The relevant delay was the whole period since the accident occurred. Each period of delay needed separate consideration as to whether or not it was excusable. The first period of delay was that of 3 years up to service of the first proceedings. This was the fault either of the Claimants or their solicitors. No excuse had been provided for that delay. The failure to serve on time was negligent and the Claimants would have a claim for that negligence. The second period was 17 months until Horton in June 2006. This was not a period where the Defendant was at fault but it may have been excusable from the Claimant’s point of view. Finally, there was the period of 22 months until the issue of the second set of proceedings. There was no excuse for that period. The fact that the solicitors were discussing how the claim should be funded provided no excuse for the non-issue of the second proceedings. Against that, the Claimant would suffer only minor prejudice by the refusal of the exercise of the discretion.

Performing the balancing exercise the position was clear.

Appeal allowed – extension under Section 33 refused.

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