High Court refuses extension where claimants deliberately failed to serve claim form

In a recent judgment, the Senior Master of the High Court rejected an application for an extension of time to serve a claim form on one of the defendants to an action in circumstances where the claimants had taken a deliberate decision not to serve on that defendant: Viner v Volkswagen Group United Kingdom Limited [2018] EWHC 2006 (QB).

The decision underlines the difficulty of obtaining an extension of time for service where there was no good reason for the failure to serve within the claim form’s period of validity or where, as here, a party has taken a deliberate decision not to do so. The proper course is to serve the claim form in time and then, if appropriate, apply for a stay of the proceedings.

This echoes comments made in Phoenix Healthcare Distribution Ltd v Woodward [2018] EWHC 2152 (Ch), considered here, in which the High Court was critical of the claimants’ solicitors’ decision to delay service of the claim form until particulars of claim were ready for service. Rather, the court in Woodward considered that the claimants should have served the claim form on time and then, if necessary, sought an extension for service of the particulars.

Francesca Ruddy, an associate in our dispute resolution team, considers the decision further below.

Background

The claimants issued a claim form against Volkswagen Group United Kingdom Limited (“VWUK”) in January 2016. The claim form was subsequently amended to include five additional defendants and the claims came to be managed within the VW NOx Emissions Group Litigation relating to diesel emissions from cars manufactured by the Volkswagen Group and related companies.

Over the course of two years, VWUK agreed to a series of extensions for service of the claim form, with the deadline being further extended following an order in the group litigation.

On the final day of the claim form’s extended validity period, the claimants applied to the court for an additional extension under CPR 7.6(2).

Decision

The High Court (Senior Master Fontaine) refused the application. She found that there was no good reason not to serve the claim form within its period of validity and that, applying the overriding objective, it was appropriate for the court not to grant an extension for service.

As the claimants’ application was brought before the validity period had expired, there was no requirement for them to show that there was a “good reason” for failing to serve the claim form on time. However, applying relevant Court of Appeal authority, the absence of a good reason was nonetheless a “substantial hurdle” to overcome in persuading the court that it should exercise its discretion to extend the time for service, particularly when there had been a deliberate decision not to serve.

It was significant that the particulars of claim served in the group litigation did not advance any claim against VWUK and that the claimants’ solicitors had failed to provide details of the claims alleged against VWUK. This was  particularly of concern where, as here, claims of fraud and dishonesty were made. Despite there having been a number of hearings in the group litigation, the claimants’ solicitors had failed to bring the court’s attention to any claims against VWUK. In fact, the claimants’ solicitors had confirmed in correspondence that there was no intention to continue the claims against VWUK, and that they would be discontinued if VWUK agreed there would be no liability for costs (contrary to the usual position on discontinuance). That, the Senior Master said, threw doubt on the claimants’ assertions that the claims were viable.

The court did not have enough information to reach a concluded view on whether the defendants had potential limitation defences which would be defeated by an extension. However, even assuming there were no such defences available to VWUK, this factor was not sufficient to tip the balance in favour of granting an extension when the factors against were, in the Senior Master’s words, “overwhelming”.

Addressing the claimants’ position that an extension was necessary to allow for dialogue between the parties, the court considered that the proper course would have been to serve the claim form and apply for a stay of the proceedings. If, as VWUK claimed, the intention was to avoid the usual costs consequences of discontinuance, the court considered that the appropriate course would have been to apply for an alternative costs order when serving a notice of discontinuance.

Francesca Ruddy
Francesca Ruddy
Associate
Email
+44 20 7466 7615

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