Artibell Shipping Company Ltd. v Markel International Insurance Company Ltd & Ors

Delay in prosecuting proceedings does not automatically constitute an abuse of process. The court must assess all the circumstances, including the reasons for delay, the parties’ respective responsibilities, prejudice and whether a fair trial remains possible.

Proceedings deliberately warehoused without an intention to pursue them may be abusive, as may wholesale and conscious disregard of the rules. Where strike-out would be disproportionate, lesser sanctions may be imposed, including restrictions on amendments and consideration of the effect of delay on interest. A renewed application for security for costs may be considered afresh where circumstances have materially changed.

The claimant shipowners brought claims under a marine insurance policy concerning engine damage to a vessel in 1997. Proceedings were issued shortly before expiry of the limitation period and reached the close of pleadings in March 2005. No further procedural step was taken until August 2007.

The defendant underwriters applied to strike out the claim for abuse of process or delay. They alleged that the claim had been issued without a genuine intention to pursue it, that the claimants had failed to fix a case management conference, and that misleading correspondence had been sent to the court. They also renewed an application for security for costs.

1. Strike-out application dismissed. The claimants’ conduct was not an abuse of process in the asserted sense. The evidence did not establish that the proceedings had been issued without any intention of progressing them, or that the failure to fix a case management conference involved intentional and contemptuous disregard of the rules.
2. The principles concerning abuse under the court’s inherent jurisdiction and CPR 3.4(2)(b) substantially overlapped. Proceedings commenced without an intention to bring them to trial may be abusive, irrespective of whether delay is inordinate or a fair trial remains possible. Wholesale disregard of the rules, with awareness of the consequences, may also amount to abuse.
3. Delay was governed by no hard and fast rules. The court had to make a broad assessment of the just order in all the circumstances. Relevant considerations included the total period of delay, the claimants’ reliance on an informal standstill, communications with the court, the underwriters’ own failure to intervene, alleged prejudice, the continuing possibility of a fair trial and delay in making the application.
4. The claimants bore primary responsibility for the delay, and their solicitors had failed properly to inform the underwriters. Nevertheless, the underwriters had not shown material prejudice and a fair trial remained possible. Given the availability of contemporary technical documentation and the likely importance of documentary evidence, striking out the claim would be disproportionate.
5. The claimants were debarred from amending their case to introduce issues not already pleaded. The question whether interest should be withheld or reduced was left to the trial judge. The underwriters’ renewed application for security for costs succeeded because the circumstances had materially changed since the earlier application, and the court was entitled to reconsider the matter afresh. The form and amount of security were left for argument at the case management conference.

The judgment records that an earlier application for security for costs was dismissed by Cooke J on 30 July 2004. Clarke LJ refused permission to appeal that decision on 22 September 2004. The present application was determined at first instance by the Commercial Court.