Court Circular image

Abuse of Process to Strike Out or Not to Strike Out, That is The Question

USAF Nominee No 18 Limited v. Watkin Jones & Son Limited [2021] 11 WLUK 45

In complex civil litigation matters parties are often racing against the clock to formulate the nature of their claim, gather evidence, and complete the disclosure process. An often-used tactic to ensure a claim is issued before the expiry of the limitation period is to file proceedings and then request those proceedings be stayed in order to fully particularise the claim and/or comply with any court protocols. This is precisely what occurred in the recent case of USAF Nominee No 18 Limited v. Watkin Jones & Son Limited (USAF) where the Defendant attempted to have USAF’s claim struck out on abuse of process grounds. 

Striking out a claim is not something the Courts do without serious regard to the facts. In the USAF case, the strike out application was refused and stay of proceedings granted. To discover why the Court came to this conclusion it is helpful to consider the facts of the case.

Background to the decision

The Defendant, Watkin Jones, had been contracted by USAF to design and construct a block of student flats. Following the Grenfell Fire tragedy, USAF investigated the safety of all its buildings. Shortly before the limitation period for contract and tort claims expired, USAF issued a claim against Watkin Jones for breach of contract and/or breach of statutory duty and/or negligence in respect of fire safety and other alleged defects.

In making its application to have the claims struck out, Watkin Jones relied on the principle set out in the case of Nomura International Plc v Granada Group Ltd [2007] EWHC 642 (Comm), [2007] 2 All E.R. (Comm) 878, [2007] 3 WLUK 628 (Nomura). 

Watkin Jones argued that at the time the claim was filed:

a) USAF did not have a claim that it intended to pursue, and

b) It had not specified the failings and deficiencies for which it said that the Defendant was responsible, and 

c) The claim form failed to comply with the requirement in CPR r.16.2 to contain a concise statement of the nature of the claim. 

The decision of the Technology and Construction Court (TCC)

The TCC accepted that in cases where a claim was merely speculative and without an identified basis the claim would be struck out for abuse of process. The principles in Nomura were based on the facts of that particular case, however, and therefore should not be construed rigidly.

The TCC concluded that USAF had not simply issued proceedings in order to avoid the limitation period expiring whilst hoping that evidence would eventually materialise that would provide the basis for a pursuable claim. USAF had every intention of pursuing the claim and was actively gathering statements and evidence. Furthermore, it honestly believed it had a claim to pursue. USAF could not, therefore, in the opinion of the TCC, be admonished for not having all the facts to hand in order to adequately plead its case.

Comment and three key takeaways

The case of USAF Nominee No 18 Limited v Watkin Jones & Son Limited confirms that if a Claimant issues proceedings to avoid its claim being time-barred despite not having the full scope of its case prepared or even understood, such an action will not be deemed an abuse of process so long as the Claimant genuinely believes there is a pursuable claim to advance.

Three ways a Claimant can ensure the claim filed meets the above standard include:

a) Ensure that at the time of issuing the claim the act or omission or the essence of the act or omission underpinning the claim can be identified.

b) Demonstrate to the Court that the gathering of witness statements, disclosure, and evidence is underway.

c) Be aware of the limitation period expiry and undertake to prepare the case and issue proceedings well in advance of the limitation deadline.

In the case of a Defendant who wants to have a claim struck out at the preliminary stage, the decision in USAF illustrates that this is not an action the Courts take without serious consideration. Before making such an application, therefore, it is imperative to carefully examine whether or not the Claimant has in fact demonstrated the above three actions. If they have, it may be best to concentrate resources on building a robust defence instead of pursuing a strike out application

While every effort has been made to ensure the accuracy of these court updates, these articles are intended as a general overview and not intended, and should not be used, as a substitute for taking legal advice in any specific situation. Neither Zurich Municipal, nor any member of the Zurich group of companies, will accept any responsibility for any actions taken or not taken on the basis of these articles.

 

 
Zurich Municipal logo

If you would like more information about our products, visit our Zurich Municipal website

 

Contact Zurich Municipal

0800 232 1901