Daryanani v Kumar & Co & Anor

Under the Civil Procedure Rules, a party is generally treated as responsible for the acts and omissions of legal representatives when the court considers delay and sanctions. The court should ordinarily assess responsibility without conducting a separate investigation into blame between client and lawyers. The relevant considerations include the length and explanation of the delay, responsibility for it, prejudice, the possibility of a fair trial, and the balance between unfairness to the claimant and defendants. A claim should not be struck out merely because it has been delayed where a fair trial remains possible and loss is capable of proof. Documentary evidence and valuation evidence may provide a sufficient basis for continuing the claim.

The claimant brought proceedings against his former solicitors and counsel, alleging negligence and breach of duty in compromising earlier property litigation by a Tomlin order and in advising on its effect. The action had made very little progress over several years.

A Deputy Master struck out the claim. His Honour Judge Hicks QC allowed the claimant’s appeal in part, striking out allegations based on what he was allegedly told about selling the property but allowing claims concerning the drafting and effect of the compromise. The defendants appealed, arguing that the delay, prejudice and absence of recoverable loss required the remaining claims to be struck out.

1. Appeal dismissed. The court upheld the order allowing the claims concerning the drafting and effect of the Tomlin order to continue.
2. There had been inordinate and inexcusable delay. In applying the overriding objective, the court was required to consider the length and explanation of the delay, responsibility for it, prejudice, the possibility of a fair trial, and the competing risks of unfairness. The decision to strike out was discretionary and was not to operate merely as a penalty.
3. Although the judge below had wrongly given weight to the fact that the delay was attributable to the claimant’s solicitors rather than to the claimant personally, that was only one factor. The claimant and his legal representatives should ordinarily be treated as a single unit for this purpose. The court should not generally undertake an investigation into the allocation of blame between them. This approach remained relevant under the Civil Procedure Rules, subject to exceptional provisions such as CPR 3.9(1)(f).
4. The judge was entitled to conclude that a fair trial remained possible. The central issues concerning the Tomlin order and the trust documentation were substantially documentary. The potential prejudice from faded oral recollection was not unusually great, particularly where the claimant alleged that the compromise had failed to secure the intended proprietary interest.
5. The claim was not valueless. The difference between the interest obtained and the more valuable interest allegedly intended could be assessed by valuation evidence. Loss was therefore capable of proof, and the claim should not be stopped at that stage.
6. Otton LJ expressed reservations about the fairness of trying issues dependent on recollections of negotiations in 1989, but accepted that the judge’s finding was one of fact supported by evidence and agreed that the appeal should be dismissed. Sir Ronald Waterhouse agreed with Mantell LJ.

• Court of Appeal (Civil Division): dismissed the defendants’ appeal and upheld the order of His Honour Judge Hicks QC.
• Queen’s Bench Division: allowed the claimant’s appeal from the Deputy Master in part. The claims concerning the drafting and effect of the Tomlin order remained, while allegations based on an alleged assurance concerning sale of the property were struck out.
• Deputy Master: struck out the claimant’s action.