Irwin Mitchell Solicitors v Patel

An automatic strike-out order should not be made on an application treated as without notice where service was required and the parties were in dispute. The court must exercise its discretion on the true procedural facts and in accordance with the overriding objective. It must consider the full range of available sanctions rather than treating strike-out as inevitable. Informal correspondence may amount to a good-faith application to vary or set aside an order and should be considered on its merits. Time for an appeal may be extended where procedural error causes substantial prejudice and the justice of the case requires review.

The claimant solicitors sued their former client for unpaid fees arising from representation in Employment Tribunal proceedings. The defendant counterclaimed substantial damages for alleged professional negligence. Following a case management order, disputes arose over copies of disclosed documents and the timing of a schedule of loss.

On an application that was not served on the defendant, the Central London County Court made an order requiring compliance by a specified date, failing which the defence and counterclaim would stand struck out automatically. The order was later declared effective, the trial was vacated, and the defendant’s application was rejected. His Honour Judge Reynolds QC held that appeals against the earlier orders were out of time and declined to interfere under CPR part 52.11. The central issues were whether the orders were validly made and whether time should be extended.

1. Appeal allowed. Time was extended for appealing against the orders of 12 September, 19 October and 28 November 2001. The relevant orders of the District Judge and His Honour Judge Reynolds QC were set aside. The case was remitted to the Central London County Court for a case management conference.
2. The order of 12 September 2001 could not stand. The judge treated the application as without notice, although the application notice indicated that the defendant was to be served. The dispute over disclosure and the schedule of loss required consideration of the defendant’s position. Under CPR 23.8, disposal without a hearing was not justified on the true facts.
3. The judge’s discretion had been exercised on an erroneous procedural basis. The automatic strike-out order therefore provided no sound foundation for the later orders and judgment.
4. The order of 19 October 2001 also could not stand. The judge had read the defendant’s correspondence but refused to treat it as an application or good-faith attempt to obtain relief. He should have considered the merits, arranged an early hearing, or dealt with the matter on paper after putting any formal application and fee requirement in place. That approach was inconsistent with the overriding objective in rule 1 of the Civil Procedure Rules and the principles in Biguzzi v Rank Leisure Plc [1999] 1 WLR 1926, which emphasised the availability of sanctions short of strike-out.
5. Although the appeals to Judge Reynolds were technically out of time, time should have been extended. The defendant suffered the relevant prejudice, the claimant showed no material prejudice apart from delay caused by the procedural dispute, and the defendant only later discovered that the application ought to have been served. The relevant administration-of-justice and party-prejudice considerations in rule 3.9 of the Civil Procedure Rules supported extension.
6. Robert v Momentum Services Ltd [2003] EWCA Civ 299 was considered on the possible effect of an application made before an automatic sanction took effect, but the point was not finally determined.

Costs orders below were set aside. The claimant was ordered to pay the defendant £4,000 costs within 21 days.

• Central London County Court: District Judge Lightman made orders on 12 September, 19 October and 28 November 2001, with related later orders, resulting in the automatic strike-out of the defence and counterclaim and vacation of the trial.
• Central London County Court, appellate jurisdiction: His Honour Judge Reynolds QC on 20 August 2002 held that the appeals against the earlier orders were out of time and declined to interfere under CPR part 52.11.
• Court of Appeal (Civil Division): Appeal allowed. Time was extended, the relevant orders were set aside, and the case was remitted to the Central London County Court for a case management conference.