Incorrect issue fees, abuse of process and limitation Defence.

Before litigating the claim, it is often the case that the issue fee paid may not be reflective of the true valuation of the claim for a number of reasons. The first instance is where at the time of issuing, the Claimant Solicitors did have in their possession all the relevant evidence to fully quantify all heads of losses, especially in claims in which proceedings are protectively issued. The second instance is where the Solicitors, purely as a result of a human error have miscalculated and consequently paid an incorrect issue fee. The third and more commonly example is where the Claimant’s Solicitors have consciously and deliberately pleaded a lower statement of value at the time of issuing knowing fully well the valuation of the claim with the intentions that they will seek to amend the statement of value and pay the Court Fee shortfall later on in the proceedings.

Given the above scenarios, when can it be said that the conduct when issuing proceedings constitutes an abuse of process. Consequently, if it is held that the conduct was an abuse of process does this then in turn entail that the proceedings ought to be automatically be struck out. Finally, what implications will a finding that there was an abuse of process have on the issues of limitation, in particular the question as to when the claim was brought for the purposes of limitation.

In the case of Atha & Co Solicitors v Liddle [2018] EWHC 1751 (QB) (09 July 2018) the High Court considered at length all of the aforementioned  scenarios in considerable detail.

This was a claim in which the Claimant brought professional negligence action against her Solicitors for discontinuing her Employer’s Labiality claim without her instructions. The six year limitation period for Professional Negligence claims expired on the 31^st March 2016, the Claimant’s claim forms were received by the Court on the 29^th March 2016 and the Court issued proceedings on the 7^th April 2016.

For the purposes of limitation and subject to the satisfaction of pre-conditions below, a claim is taken to have been brought when the claim form is received by the Court and upon fulfilment of these three conditions.

• The claim forms were delivered in due time to the Court office, accompanied by
• A request to issue and
• The appropriate fee

In the case of Atha, the statement of value indicated that the Claimant expected to receive more than £10,000.00 but no more than £,25,000.00. The correct Court fee was therefore £1,250.00 which was paid.

After service of proceedings, the Defendant immediately suspected that the Claimant had deliberately misstated the value of the claim to avoid paying a much higher Court fee when the Defendant made a formal offer of £25,000.00 (the maximum pleaded on the Statement of Value) and the Defendant’s offer was rejected by the Claimant. the Defendant’s suspicious were affirmed and subsequently they advanced an application to strike out the proceedings on the basis that the Claimant’s conduct was an abuse of process.

The Defendant were no doubt influenced by the decision in Lewis v Ward Hardway which was decided 6 months prior to their application being made. In the Lewis case, the Claimants Solicitors brought negligence claims against the Defendant firm of solicitors. In each case the pre-action letters of claim sought substantial sums but the value of the claim stated in their claim forms was considerably lower and the Court fee paid by the Claimant was a lower sum in comparison to what was payable from the valuation mentioned in their letter of claim.

The High Court were understandably severely critical of the conduct of the Claimants solicitors and reached a clear conclusion that they had perpetrated an abuse of process. In some of the cases, the Court subsequently concluded that the appropriate fee was not paid in time and proceeded to summarily dismiss eleven of the Claimants claims.

The High Court in case of Atha & Co Solicitors were highly critical of the Judgement in Lewis v Hardway refused to accept the analogy, approach and conclusion reached in dismissing the Claimants claims.

In the case of Atha, the Court acknowledged the fact that the Solicitors conduct in paying incorrect issue fee was abuse of process but did not however mean that that the claim was automatically struck out. For the purposes of limitation, the Court concluded that the claim was brought at the time the claim form were received by the Court and when it was later issued. The delay the claim was brought for limitation purposes at the time the claim form was received by the Court and when it was later issued. The delay in in issuing the claim form was entirely unconnected with to the Solicitors abuse. Contrast this with the case of Page v  Hewetts [2013] EWCH 2845, a case in which there was a shortfall of £400.00 on the accompanying claim forms as a result of the Solicitors innocent miscalculation. In the Page case, the limitation defence succeeded because the Solicitors had incorrectly miscalculated the Court fee by a relatively small amount. The delay in issuing the claim was causaly connected with the Claimant’s error. In other words, the Court delayed issuing the claim because the issue fee paid did not correspond with the statement of value pleaded, whereas in the Atha case, the issue fee paid did correspond with the statement of value pleaded (albeit that the statement of value was purposely pleaded at a lower sum to avoid paying the higher fee)

In conclusion, a finding or ruling that the Claimant’s Solicitors have perpetrated an abuse of process in not in itself sufficient to automatically strike out the claim.  It is indeed very concerning and in my opinion inconsistently unfair that a limitation defence in the case of Page succeeded due to an innocent miscalculation by the Claimant, whereas in the case of Atha, the limitation defence failed despite the fact that there was a finding of an abuse of process. No doubt the Court of Appeal will soon provide authoritative guidance on these issues.