Shutting the stable door

Every good litigator ensures that all causes of action available to the (correct) client are pleaded out and incorporated within the statement of case before the limitation period expires: for the court’s residual discretion to permit an amendment after the expiry of a critical limitation period (CPR Pt 17, r 4) is severely restricted. Once the statutory time limit has expired the court has no discretion to permit an amendment which has the effect of adding a new cause of action or adding/swapping a party who may have known enough to appreciate that he had a cause of action during the limitation period, but let it pass (Limitation Act 1980, s 35). An attempt to amend after expiry would likely be an abuse of process and struck out [CPR Pt 3.4(2)(b)]—a classic case of trying to shut the door after the horse has bolted.
 

Exception
 

The trouble is, every litigator also knows that there is usually at least one exception to every rule; and that some exceptions have the appearance of cancelling each other out. On the one hand: it is well-established that there is little point adding a party as a possible target in case the limitation period expires if you do not have the material foundations for a claim: Steamship Mutual Underwriting Association v Trollope & Colls Ltd (1986) 33 BLR 77. On the other hand: in Stuart v Goldberg Linde (a firm) [2008] All ER (D) 73 (Jan) it was held that a claimant should not be criticised for not pleading something that would have been struck out for want of particulars at the material time—for it should not be an abuse of process for a party not to enforce his rights until he has the information that would prevent his case from being struck out. Recently this principle was applied in Wallbrook Trustees (Jersey) Ltd v Fattal & ors [2009] EWCA Civ 297, [2009] All ER (D) 107 (Apr), to allow a “second bite” at the same facts because the claimants did not know that they had the wrong evidence first time around.
 

What about a claimant who has a good arguable case on the facts; who does not presently hold the right of action but is going to obtain it by assignment very soon; but the limitation period is going to expire before his legal standing is secured? Surely—thinks the litigator—we issue a claim form in order to preserve the client’s position prior to expiry, then serve after the disability is removed, or (at worst) we apply to amend later, to plead the claimant’s locus once everything is legitimised? No, said the Court of Appeal, in Pickthall v Hill Dickinson LLP [2009] EWCA Civ 543, [2009] All ER (D) 235 (Jun).
 

In January 2001 Mr Pickthall retained Hill Dickinson to draw up paperwork for the sale of his company shares, completed on 6 February 2001. Shortly thereafter the company went into administration; the end result being that Mr Pickthall was adjudicated bankrupt on his own petition in October 2001. He believed he had a good claim for professional negligence against Hill Dickinson, but neglected to inform his Trustee-in-Bankruptcy; thinking instead that he would sue once discharged in August 2006. Mr Pickthall was then advised that the Official Receiver held this cause of action. Negotiations for an assignment from the OR were still ongoing when, on 5 February 2007, and well aware that the six-year anniversary was imminent, Mr Pickthall issued his claim form; with the intention of amending after the assignment was obtained (three months later).
 

Struck out
 

The claim was struck out by the Court of Appeal. “Only people who own causes of action, or who have an appropriate interest in proceedings, have any business asserting the cause of action or starting proceedings: any other use of the court’s process is improper,” held Mr Justice Mann, on behalf of a unanimous court [at para 15]: “The position would be likely to be otherwise if the claimant does not know, or is uncertain, as to whether he has title to the relevant cause of action...at least until it is authoritatively determined that the claimant does not own the cause of action, it may well not be appropriate to characterise the proceedings as an abuse.” If the limitation period expires after issue but before assignment, an amendment to plead the assignment does not prevent the abuse: the amendment cannot affect the date from which the assignment vests the cause of action in the claimant, which is still after expiry. The otherwise inconvenient decision in Smith v Henniker-Major & Co [2002] EWCA Civ 762, [2002] All ER (D) 310 (Jul)—namely, that permission to amend can even be given where a limitation period expires after a failed assignment—was distinguished on the facts, because here Mr Pickthall knew full well that he did not have the cause of action when he issued the claim form.
 

Saddling a horse is best done in the stable. Once the horse is out and away there is no point shutting the door and reaching for the tack: the beast is gone. Trying to throw the saddle onto a horse already into its stride is an occupation not worth the risk: both horse and rider are at risk of falling down in the attempt.
 

David Dabbs is a barrister, 42 Bedford Row

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