Kevin Cowley v LW Carlisle Company Limited – Appeal before HHJ Rawlings on 14th November 2018.
DWF successfully applied for this occupational deafness claim to be struck out and then resisted the Claimant's appeal of the District Judge's strike out order. The case was handled by Patrick McBrien, Director in our Catastrophic Injury & Occupational Health team. Simon Hughes, Counsel from Civitas Law, successfully represented the Defendant at the Appeal.
Background & Decision at First Instance
The appeal centered around an application made by the Defendant insurers to strike out a purported claim against the Defendant on the basis that the Claimant had not taken the fundamental step in the litigation of restoring the Defendant to the register. The application asserted that as a result of this failure the proceedings were a nullity and therefore the court should make a declaration under CPR 11 that it had no jurisdiction to hear the claim or in the alternative that the court should strike the claim out pursuant to CPR 3.4(2)(c).
The Claimant resisted the application and entered a witness statement relying on the case of Peaktone Ltd v Joddrell  EWCA Civ 1035. Significantly as things would transpire, the Claimant did not explain what steps had been taken to restore the Defendant to the register nor was any evidence given within that witness statement as to the reasons why the Defendant had not been restored. The witness statement did not explain what period of time the Claimant would need to put his house in order.
The matter came before DJ Etherington for hearing. At that hearing Counsel for the Claimant made an application in the face of the court for a stay of proceedings so that the Defendant could be restored to the register. He relied on the fact that once restored the proceedings would be retrospectively validated (Peaktone) and pointed to the prejudice caused to the Claimant if his claim was struck out. DJ Etherington pointed out that the claim was low value being limited to £5,000, there were three further Defendants who would be caused delay by a stay and that there was no evidence before him explaining why LW Carlisle had not been restored previously. Most pertinently, DJ Etherington was concerned that despite the application to strike out having been made a period of months prior to the hearing there was still no evidence from the Claimant’s solicitors that restoration proceedings had been started. DJ Etherington, in robust terms, went onto strike the claim out. Importantly he did not make a declaration as to whether the court accepted or declined jurisdiction.
Basis of Appeal
The Claimant appealed the decision on three grounds. Firstly the Claimant argued that that the Defendant had not complied with the requirements of filing an acknowledgment of service as required by CPR 11(2) and therefore the Claimant averred that, had DJ Etherington done so, he was wrong to decline jurisdiction. The Defendant filed an Acknowledgment of Service contesting jurisdiction but the Claimant argued that it had not been filed in time. In reality, jurisdiction was contested as soon DWF were instructed and the delay was a result of the Claimant serving Proceedings on the Defendant's last known address, as opposed to on insurers or solicitors. Secondly, the Claimant argued that the failure of the Defendant’s application under CPR 11 meant that the court was not entitled to go onto consider and application under CPR 3.4. Finally, even were the appeal to fail on the first two grounds, the exercise of DJ Etherington’s discretion was plainly wrong when one considered the effect of Peaktone and the prejudice caused to the Claimant.
In response the Defendant maintained that the District Judge had not declined jurisdiction under CPR 11 but rather struck the case out under his inherent case management powers as set out at CPR 3.1(2)(m). The fact that he explicitly or implicitly accepted jurisdiction in no way prevented him from striking the claim out as he was under an ongoing duty to continue to case manage the proceedings. In this regard the Defendant relied on the Court of Appeal decision of Robert William Cook v Virgin Media Limited  EWCA Civ 1287. The Respondent maintained that District Judge Etherington was entitled to consider striking out the claim. Furthermore, bearing in mind that the District Judge was faced with a without notice application, unsupported by proper evidence, to grant an open ended stay, in a low value claim where there were other Defendants, the exercise of his discretion, on the facts, was well within the broad boundaries afforded him.
The Respondent also maintained that the Appellant’s First and Second Points were not raised in the court below and therefore, as a matter of fairness, the Appellant should not be entitled to rely upon them on appeal (see for example Jones v MBNA International Bank (2000) WL 989307).
HHJ Rawlings identified 6 issues relevant to the appeal and these can be summarised as follows;
1. Whether the first two grounds argued on appeal were raised before the DJ?
2. Whether if they were not raised whether he should give permission for them to be raised before him?
3. Whether the DJ did strike out the claim under CPR 11?
4. If he did was he right to do so?
5. Should he exercise his discretion to strike the claim out so as to allow a jurisdictional challenge by the back door i.e. did the application under CPR 11 prohibit a challenge under CPR 3.4(2)(c)?
6. If the application under CPR 11 did not exclude an application under 3.4(2)(c) should he interfere with the exercise of the District Judge’s discretion to strike the claim out?
Findings on Appeal
In terms of issues 1 and 2 HHJ Rawlings found that the Appellant had not raised the arguments before the District Judge below. Indeed the District Judge was specifically invited to exercise his case management powers. However, bearing in mind that these arguments related to issues of law and that the Respondent had been aware of them for some time, it was appropriate for him to hear them on appeal. He was unable to identify any prejudice caused to the Respondent which made it unfair for them to form part of the appeal hearing.
Turning to issue 3, and having reviewed the transcript of the proceedings, HHJ Rawlings felt that it was clear that DJ Etherington had not struck the claim out on the basis that the court lacked jurisdiction to hear the claim. Significantly, he noted that the appropriate order were the court to decline jurisdiction would be for a declaration to this effect. The fact no declaration was made by the District Judge was highly probative. In light of the fact that the case was not dealt with under CPR 11, HHJ Rawlings did not find it necessary to go on to consider Issue 4.
Perhaps the most significant part of HHJ Rawlings judgment relates to the interplay between CPR 11 and CPR 3.4, as described at Issue 5. HHJ Rawlings felt that simply because an application was made in the alternative for the court to decline jurisdiction that had been either explicitly or implicitly rejected by the court, did not prevent the court from going onto case manage the case under its inherent powers. In effect the court’s powers of case management were in no way hamstrung because of a failure of an application the Respondent had made. He noted the broad and largely unfettered discretion afforded the court under CPR 3.1(2)(m) and in light of this HHJ Ralwings felt that DJ Etherington was not only entitled to consider his powers of case management but indeed obligated to do so pursuant to the overriding objective.
Finally, turning to consider issue 6 HHJ Rawlings stated that he could see no basis for interfering with the exercise of the court’s discretion below.
The appeal was therefore dismissed with an order for costs in favour of the Respondent.
Firstly, it is significant that HHJ Rawlings found that, in these particular circumstances, the Court has power to strike the claim out under its general case management powers and independently of jurisdiction arguments.
HHJ Rawlings felt that while DJ Etherington had expressed himself in robust terms it was clear that he had considered all relevant factors including proportionality, the absence of evidence, delay and the effect a stay would have on the other Defendants. The Court took the view that prejudice caused to the Claimant by the loss of his claim was not sufficient to outweigh these factors. HHJ Rawlings felt it was key to his decision and indeed “remarkable” that the Claimant had called no evidence to show he had started the restoration proceedings between the application to strike out and the hearing before DJ Etherington. In those circumstances HHJ Rawlings was unwilling to interfere with the discretion exercised by DJ Etherington. The Court's reasoning here shows that while the decision to grant a stay is discretionary there is an onus upon Claimants when seeking an indulgence of the court to delay proceedings to produce good evidence to demonstrate that it is in advancement of the overriding objective to do so and not simply rely on the inherent prejudice of a Claimant losing his claim. It my well be that many Claimants will find this a difficult hurdle.