You made a mistake!
Woodward & Anor v Phoenix Healthcare Distribution Ltd [16.03.18]
Is there a duty on a party to litigation to point out their opponent’s errors? According to Master Bowles in Woodward, they should do so where this will further the overriding objective.
However this decision is, arguably, at odds with the recent Supreme Court decision in Barton v Wright Hassall LLP , which concluded that the defendant’s solicitors in that case were not under any duty to advise the claimant of his mistake as to service of proceedings. Woodward is being appealed to the Court of Appeal and so we will need to watch for further developments, but the current position is as follows.
The defendant’s solicitors (Mills & Reeve) wrote to the claimant's solicitors (Collyer Bristow) informing them that they were instructed on behalf of the defendant. Correspondence was exchanged and, in July 2017, Collyer Bristow wrote to the Mills & Reeve stating that they would serve proceedings on them. Mills & Reeve did not have instructions to accept service and had never asserted that they did. They did not inform Collyer Bristow that, if proceedings were served upon them, they would be invalid.
The Claim Form was served on Mills & Reeve on 17 October 2017 and was received on 18 October 2017. The time for service expired on 19 October 2017. On 20 October 2017, Mills & Reeve wrote to Collyer Bristow pointing out that service of the proceedings was defective. Collyer Bristow then sent copies of the Claim Form to the defendant direct. The defendant applied to strike out the claim and the claimant applied for an order that it had effected good service under the Civil Procedure Rules.
The overriding objective
Most of the claimant’s arguments failed before Master Bowles, but the submission which ultimately succeeded was summed up by the Master as follows:
“…by reason of the overriding objective, parties to litigation now owe a duty to the court to co-operate in respect of procedural matters, that that duty extends, in an appropriate case, to a duty to advise, or inform, an opposing party of his mistakes, that that duty arose in this case, that Mills & Reeve’s conduct and that of its client, in not warning Collyer Bristow, timeously, as to its error, such as to enable Collyer Bristow to correct that error, amounted to a breach of that duty and afforded, therefore, a very good reason to validate the defective service and so put the claimants in the same position as if Mills & Reeve’s obligation to the court had been fulfilled.”
In contrast, in the case of Barton, the Supreme Court held that the defendant’s solicitors were not under a duty to inform the claimant (a litigant in person) of his mistake as to service.
As a result of the decision in Barton (which was handed down after the Woodward draft judgment had been released but not handed down), Master Bowles issued an addendum to his judgment which stated:
“The Supreme Court, however, was not asked to consider and did not consider, as I have been asked to, any developed argument, as to the impact and effect of the duty to further the overriding objective, as giving rise to a duty to the court to warn an opposing party of his, or her, mistakes.”
The Master went on to say, “I do not think that the undoubted culpability of Collyer Bristow, in overlooking the fact that Mills & Reeve had not indicated that it had authority to accept service, outweighs Mills & Reeves’ conduct, in failing to draw Collyer Bristow's attention to its mistake. Had Mills & Reeve acted as it should have done, Collyer Bristow's mistake would not have precluded good service being effected in the lifetime of the Claim Form.”
Consequently the Master dismissed the defendant’s application, finding that a flexible approach should be given to service of the Claim Form, and held that the steps taken by the claimant’s solicitors constituted good service.
Given the importance of the point, the Master did however give permission to the defendant to lodge its appeal directly with the Court of Appeal.
The key point to take from Woodward, pending the decision of the Court of Appeal, is that, if a party to litigation maintains their silence, rather than pointing out the other side’s obvious mistakes, then this might be said to constitute the “deliberate playing of a technical game”, which is discouraged by the courts.
Read other items in the Professions and Financial Lines Brief - June 2018