Cain v Francis

Under Limitation Act 1980 section 33, the central question is whether it is fair and just to require the defendant to meet the claim on its merits despite late commencement. The financial consequence of losing an accrued limitation defence is not, without more, prejudice to the defendant. The material prejudice is whether delay has impaired a fair opportunity to investigate, obtain evidence, or defend liability or quantum.

Length and reasons for delay remain relevant, as do early notice of the claim and the claimant’s alternative remedy against negligent solicitors. A claim against solicitors may reduce the claimant’s prejudice but is not determinative. Although the discretion is unfettered, it must be exercised consistently with this guidance.

These conjoined appeals concerned personal-injury claims arising from road traffic accidents. In each, liability had been admitted promptly, insurers had received medical material and made interim payments, but proceedings became ineffective or were issued after the three-year primary limitation period.

In Cain v Francis, the claimant’s solicitor issued proceedings one day late. HH Judge Armitage QC at Oldham County Court refused to disapply section 11. In McKay v Hamlani, solicitors failed to serve an in-time claim form and fresh proceedings began nearly a year late. HH Judge Faulks allowed the action to proceed; the insurer appealed.

The common issue was the proper approach to the equitable discretion under section 33 of the Limitation Act 1980, particularly whether deprivation of an accrued limitation defence was prejudice to the defendant.

1. Disposition. The court allowed Mr Cain’s appeal and directed that the limitation provisions be disapplied. It dismissed the insurer’s appeal in the McKay proceedings. Smith LJ gave the principal judgment; Maurice Kay LJ agreed, and the Chancellor agreed in a separate judgment.
2. The statutory question. Section 33 requires the court to decide whether it is equitable, meaning fair and just, to permit a trial on the merits. The basic inquiry is whether it is fair and just, in all the circumstances, to expect the defendant to meet the claim despite the delay.
3. Prejudice to the defendant. The loss of a limitation defence, and the resulting obligation to pay damages if liability is established, is not itself a relevant head of prejudice. The defendant is prejudiced only to the extent that delay has compromised a fair opportunity to investigate or defend the claim, whether on liability or quantum. The Chancellor reached the same conclusion from the language and purpose of section 33.
4. Relevant circumstances. The court must consider the length and reasons for delay, but principally for their effect on the fairness of a merits trial. Early notification of the claim and the opportunities already available to investigate and assemble evidence are material. The claimant’s remedy against negligent solicitors is relevant to the claimant’s prejudice, but it does not compel refusal of relief.
5. Application. In Cain, the one-day delay caused neither forensic prejudice nor inconvenience. The claimant would still suffer real prejudice if required to sue his continuing solicitor and, initially, repay interim payments. It was fair and just to disapply section 11. In McKay, Judge Faulks had erred in believing counsel agreed a point, but correctly disregarded the loss of a windfall defence and was entitled to find no significant forensic prejudice from the longer delay. His discretionary conclusion stood.

• Court of Appeal (Civil Division): In the combined appeal, the court allowed the claimant’s appeal in Cain v Francis and dismissed the insurer’s appeal in the McKay proceedings: [2008] EWCA Civ 1451.
• Oldham County Court: HH Judge Armitage QC refused a section 33 direction in Cain on 20 December 2007. That decision was reversed.
• Newcastle upon Tyne County Court: HH Judge Faulks allowed the claimant’s section 33 application in the McKay proceedings on 22 January 2008. That decision was upheld.