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Bc Disease News a Weekly Disease Update 9 March 2020 Edition 304 BC DISEASE NEWS A WEEKLY DISEASE UPDATE CONTENTS PAGE 2 Welcome Welcome PAGE 3 Strike Out, Contesting Welcome to this week’s edition of BC Disease News. Jurisdiction and Restoration in Claims Brought Against In this issue, we provide detailed analysis on the Court of Appeal’s latest non- Dissolved Companies: Cowley prescriptive ‘guidance’ for insurers, in cases where proceedings are served v LW Carlisle & Company Ltd against a dissolved insured and uncertainty is created over whether the insurer has legal authority to act, pending restoration. [2020] EWCA Civ 227 What is more, Stuart Bacon, Head of BC Legal’s Southend and London Offices, PAGE 8 comments on conduct which ought to be protected by legal professional Why Stop at Discontinuance privilege. He does so, in the wake of Hoy v Secretary of State for the Department of Transport (2019), in which Walker Prestons Solicitors was recently ordered to When You Can Recover pay wasted costs arising out of a noise-induced hearing loss claim (NIHL) claim, Wasted Costs? Hoy v Secretary which discontinued only hours before the trial was set to commence. of State for the Department of Transport (Middlesbrough Elsewhere, we report that Kamran Akram, the former Principal of defunct claimant County Court, 17 October firm, Asons Solicitors, has agreed not to ‘apply for a certificate to practice as a 2019) solicitor without first obtaining permission from the High Court’. This has been heralded as a ‘great outcome’ by those who have fallen victim to insurance PAGE 12 fraud. Setting-Off Costs Against Costs Finally, we reveal possible new methods for detecting ‘acute subconcussive When QOCS Applies: Faulkner injury’, as identified by researchers at the University of Indiana, which may be of v Secretary of State for significant clinical utility if repeated sub-concussive head trauma (e.g. heading Business, Energy And Industrial footballs) is eventually identified as a definite cause of neurodegenerative Strategy [2020] EWHC 296 (QB) disease. Any comments or feedback can be sent to Boris Cetnik or Charlotte Owen. PAGE 14 ‘Good Reason’ to Depart from As always, warmest regards to all. the Costs Budget: Chapman v Norfolk and Norwich University SUBJECTS Hospitals NHS Foundation Trust (Birmingham County Court, 4 Serving Proceedings Against Dissolved Companies – Wasted Costs – Setting-Off March 2020) Costs Against Costs – ‘Good Reason’ under CPR 3.18(b) – Kamran Akram Compromise Agreement in Committal Proceedings – Updated FA Heading PAGE 15 Guidance. Former Head of Asons Banned from Legal Practice and Company Directorship PAGE 17 Football Association Publishes New Heading Guidance, as US Researchers Identify Effects of Heading on Vision and Brain Function P AGE | 2 Strike Out, Contesting Jurisdiction and Restoration in Claims Brought Against Dissolved Companies: Cowley v LW Carlisle & Company Ltd [2020] EWCA Civ 227 The case of Cowley v LW Carlisle & Company Ltd [2020] EWCA Civ 227 regarded a noise-induced hearing loss (NIHL) claim, pursued against 4 former defendant companies that collectively employed the claimant, between 1963 and 2000. When proceedings were purportedly served at the ‘last known place of business’ of the 3rd defendant (the defendant), on 1 September 2017, the claimant’s solicitors were aware that it had been struck off the Register of Companies and subsequently dissolved. Around the date of purported service, the claimant’s solicitors also wrote a letter to the defendant (and its insurers), which addressed its assumed position on the legality of the claim, with respect to the defendant’s inactive status. PAGE | 3 Giving instructions on behalf of its employers’ liability (EL) insured, Royal Sun & Alliance (RSA) Insurance PLC contended that proceedings could not be served on the defendant, as it was still dissolved. However, on 27 April 2018, the defendant’s solicitors (instructed by RSA), indicated that it would likely file an Acknowledgment of Service on behalf of the defendant (‘... we are instructed to act on behalf of L.W. Carlisle & Company Limited’), which would contest jurisdiction on the basis that there had been no attempt to restore the company to the Register, thereby making the proceedings a ‘nullity’. Accordingly, the defendant filed an application on 2 May 2018, which sought for the claim to be struck out (as an ‘abuse’ of the court’s process and/or for failing to comply with a rule, practice direction or court order), pursuant to CPR 3.4(2). Additionally, or in the alternative, the defendant sought a declaration that the court had no jurisdiction, or would not exercise its jurisdiction, pursuant to CPR 11(6). The 1st instance application hearing took place on 31 May 2018, before District Judge Etherington, who struck out the claim and ordered the claimant to serve a witness statement showing cause as to why they should not pay the defendant’s costs, summarily assessed at £555, or else the relevant order would be made. In the course of the hearing, the District Judge rejected the claimant’s submission that restoration of the defendant to the Register would retrospectively validate ‘good service’ of the claim form (per Munby LJ, in Peaktone Ltd v Joddrell [2012] EWCA Civ 1035), as the courts ‘... will only correct errors in procedure where there is imminent restoration ...’ He went on to reject any notion that the claim would be stayed, because the claimant’s solicitors had created a nonsensical excuse with ‘loads of factious technical arguments that all amount to nought’. They had not been ‘practical’ and taken steps to restore the company. Indeed, it was not until 25 June 2018 that the restoration application was made to the High Court at Manchester (with the order having been granted on 5 February 2019). PAGE | 4 On 14 November 2018, the first appeal of the District Judge’s decision was heard by His Honour Judge Rawlings, at Stoke-on-Trent County Court. More in hope than expectation, the claimant’s 1st ground of appeal was that the judge had, in actual fact, declined jurisdiction under CPR 11(6). The defendant, in having filed and served its notice of Acknowledgment by 18 May 2018 (the delay having been caused by the fact that the claim was sent to the address of an inactive business), was posited as having been non-compliant with CPR 11(2) and the consequence of doing so therefore had to be that jurisdiction was conceded. On a 2nd ground of appeal, the claimant submitted that, if the District Judge had instead acceded to an application made by a non- existent party, pursuant to CPR 3.4(2), then he had erred in striking out the claim by this method. Ultimately HHJ Rawlings concluded that the claimant’s 1st ground of appeal was redundant, as DJ Etherington had clearly acted under CPR 3.4 and not CPR 11. Moving on to the 2nd ground, he reasoned that: ‘... it remained open to the court to exercise its case management powers to strike out a claim on the basis that the purported defendant did not exist and no sensible steps had been taken on the Appellant’s behalf to procure the company’s restoration to the register’. Strike out was the ‘appropriate’ resolution and fell within the ambit of the District Judge’s discretionary powers of case management – see CPR 3.1(2)(m). PAGE | 5 It was ‘remarkable’ to the Circuit Judge that proceedings were being ‘held up’ by such ‘excessive delay’ in taking steps that were necessary, i.e. restoring the defendant to the register, in conjunction with a stay of proceedings. So, can a party ‘subvert’ a jurisdictional challenge ‘by the backdoor’, by invoking CPR 3.4 powers? Based on the decision of HHJ Rawlings, the claimant argued, during the most recent Cowley appeal, that the judge at 1st instance had erred in striking out the case, in accordance with CPR 3.4(2)(c), when the ‘proper challenge’ was to contest jurisdiction under CPR 11 [per Dyson LJ, in Hoddinott & Ors v Persimmon Homes (Wessex) Ltd [2007] EWCA Civ 120], with an Acknowledgment of Service filed within the prescribed time limit. Alternatively, the claimant submitted that the defendant’s strike out application waived any right that it had to oppose jurisdiction. This two-pronged line of argument mirrored the claimant’s 2nd submission in Peaktone, but because the appeal in that case succeeded on the 1st ground (retrospective validation of proceedings was achieved through restoration, under s.1032(1) of the Companies Act 2006), it was not necessary to provide an answer. In Cowley, Lord Justices McCombe, Holroyde and Jackson also avoided this submission, albeit for a different reason. Claimant counsel’s entire argument centred around the unconvincing assertion that service had been validly effected ‘upon a company which at that time [i.e. when DJ Etherington struck out the claim] did not exist’. Put frankly, one cannot waive jurisdiction to null proceedings. On the flipside, the Court of Appeal judges struggled to accept that the EL insurer could rely on subrogated authority when making its application in the defendant’s name, if the company was regarded as being non-existent: ‘... it seems such an authority to the Insurers to act as agents for the company may well have lapsed along with its dissolution, just as any agent’s authority would lapse on the death of the principal’. N.B. If the right of subrogation ‘dies’ with a company, is it fair to assume that an insurer’s contractual liability to indemnify the dissolved is simultaneously extinguished (until it is resurrected by way of restoration)? Despite this technicality, namely whether the defendant’s application had been ‘properly brought’, it was concluded that DJ Etherington was entitled to consider how best to progress the action in the exercise of his case management powers.
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