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Civil Litigation Group – Successful Court of Appeal Case

Mr James Patience, assisted by Mr Byron Austin (pupil), was successful in the recent Court of Appeal case of Alton V Powszechny Zaklad Ubezpieczen SA (‘PZU’) [2024] EWCA Civ 1435.

INTRODUCTION

Mr James Patience, assisted by Mr Byron Austin (pupil), was successful in the recent Court of Appeal case of Alton V Powszechny Zaklad Ubezpieczen SA (‘PZU’) [2024] EWCA Civ 1435.

The case dealt with amending a statement of case to add a new cause of action against a foreign defendant after primary limitation has expired (CPR 17.4) and the discretion of a judge to strike out a statement of case.

Mr Patience represented the Claimant and was successful on all grounds. The case has since settled in Ms Alton’s favour at her full valuation.

BACKGROUND

Ms Alton was involved in an RTA with a lorry registered in Poland. She brought a claim against InterEurope, the Polish insurers UK handling agent. Liability was not in issue. The Particulars of Claim pleaded the cause of action under The Third Party (Rights Against Insurers) Act 2010 and the European Communities (Rights Against Insurers) Regulations 2002.

The claim was defended on the basis that the correct defendant was PZU, not InterEurope, (who acted only as the claims handler for PZU) and that the pleaded causes of action did not apply to vehicles registered outside of the UK.

An application to amend was made to change the name of the Defendant and was granted. However, Ms Alton did not apply to amend the pleaded cause of action. The Defendant then made a strike out application.

At the strike out application hearing, counsel for the Claimant submitted that an unless order should be made to enable Ms Alton to amend her pleadings to plead the correct cause of action.

The Defendant submitted that the claim was now statute barred under the s.35 Limitation Act 1980. They submitted that because the amendment included a piece of foreign law, the amendment was not based on the same/substantially the same facts and the claim should be struck out forthwith.

In a very short judgment, described by the Court of Appeal as not “easy to follow” DDJ Pithouse struck out the claim. He gave little explanation for his decision save for stating:

“I am not satisfied that there is sufficient pleading that would enable this matter to overcome the requirements and content of pleading and in those circumstances, with some hesitation, I strike out the claim on the basis for the reasons I have given”

Mr Patience was instructed at this point and advised that DDJ Pithouse’s decision should be appealed and drafted grounds for the appeal.

At the first appeal, HHJ Parker noted that DDJ Pithouse had made no mention of proportionality in striking out the claim and had not considered an unless order. He stated (obiter) that the claim seemed to arise out of substantially the same facts. He concluded that the strike out was not proportionate and was outside of the DDJ’s reasonable discretion and allowed the appeal.

HHJ Parker’s decision was appealed by the defendant. The Court of Appeal granted permission on the basis that the matter contained an important point of principle in relation to the procedure to amend a case to add a cause of action against a foreign party post limitation.

COURT OF APPEAL

The Court of Appeal accepted Mr Patience’s argument that, in this context, it is not necessary to show that a cause of action that is bound to succeed. They agreed with Mr Patience that the relevant test was whether it had a real, as opposed to fanciful prospect of success, in line with the test in relation to CPR 3.4(2)(a).

The Court of Appeal observed the fact that liability had already been admitted and agreed with Mr Patience’s submission that it had never been argued by the Appellant/Defendant before that there was no direct right of action under Polish law.

The Court of Appeal found that on all the material before DDJ Pithouse, the test was easily overcome and accepted that the cause of action was ‘overwhelmingly likely’ to succeed.

The Appellant submitted at length that without the specific provision of Polish law being identified and supported by expert evidence the court could not be satisfied of a real prospect of success. The Court of Appeal rejected this and agreed with Mr Patience that it was “by no means necessary” for a party to adduce expert evidence when applying to amend a pleading.

The Appellant argued that amending a pleading to include foreign law meant the claim fell out of the scope of s.35 of the Limitation Act 2018 because the fact of foreign law would be substantially different. Agreeing with Mr Patience’s submissions, the Court of Appeal disagreed. The Court stated that although foreign law is a question of fact, it has been treated as a special kind of question of fact, and one on which findings are to be treated differently from other findings of fact. The Court stated that it is part of the identification of the legal basis for the claim, not the factual basis. The Court emphasised that a change in the legal basis of a claim can be made without offending against “either the letter or spirit” of what is precluded by S35 of the Limitation Act and CPR 17.4.

The Court of Appeal accepted Mr Patience’s submissions on the balance of prejudice and agreed with him that PZU would suffer “no prejudice” by reason of the defective pleading being cured by amendment and that any prejudice that might be suffered could be addressed by way of a costs order. The Court concluded that most of the DDJ’s limited consideration (if not all) failed to deal with any prejudice to Ms Alton and that HHJ Parker was perfectly entitled to substitute his own view.

The appeal was dismissed with the respondent being awarded their costs and a substantial interim payment on account.

DISCUSSION

This decision reiterates that strike out is a last resort and that parties should be given an opportunity to amend their pleadings before striking out pleadings.

The analysis by the Court of Appeal on how foreign law is treated differently to other findings of fact demonstrates that changing the cause of action, post limitation, does not necessarily offend the provisions of s.35 of the Limitation Act 2018, nor CPR 17.4(2).

Claimants can take some encouragement from this decision. If a claim is struck out without giving proper reasons and without applying the correct legal test their remains ample scope for the position to be rectified by the higher courts. The full judgment of the case is available here.

 

 

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