Delivering its
judgment in Cowley v LW Carlisle [2020] EWCA Civ 227, the court
described as ‘misguided’ the commencement of proceedings against LW Carlisle
when it was known the company had been dissolved and without taking prompt
steps towards restoring it to the register.
Patrick
McBrien, DWF director and solicitor for the respondent, said: ‘It is pleasing
that the Court of Appeal upheld the decision of a District Judge and then a
Circuit Judge to strike out this deafness claim brought against a dissolved
defendant, the claimant having failed to take the fundamental step of restoring
the former company to the register before starting the litigation.
‘The Court
held that irrespective of issues of jurisdiction arising out of CPR 11, the
District Judge had a freestanding right to strike the claim out on grounds of
abuse of process and as part of his case management powers. The Court of Appeal
held that strike out was a reasonable exercise of the DJ's discretion in the
circumstances of this case.
‘The judgment
expressly recognises that insurers and those with a potential financial
interest are placed in a difficult position procedurally when claims are
brought against former policyholders who are now dissolved. The judgment is
likely to be welcomed by the market, as discouraging such claims.
‘The judgment
also serves as a warning to claimant solicitors in relation to costs as the
Court of Appeal has clearly indicated that it will be the claimant’s solicitors
(not the claimant) who will have to bear the costs of the initial strike out
application and the two appeals.’
