Brooks v AH Brooks & Co (a firm)

A claim against an unincorporated partnership is, in substance, a claim against the individuals who were partners when the relevant causes of action accrued. Service at the firm’s business address may be ineffective against a former partner where the claimant knows, or has reason to believe, that the individual no longer carries on business there. The claimant must then take reasonable steps to identify a current address or consider an alternative method of service.

An acknowledgment of service made in the partnership’s name by a person authorised by a partner at the relevant time is generally effective for all relevant partners, unless expressly qualified. Such an acknowledgment waives defects in service. For costs purposes, a person reasonably alleged to be a partner may be treated as a party even if that person ultimately establishes that no claim lies against them.

The claimant brought proceedings in the business name of a long-established unincorporated solicitors’ firm concerning events dating from 1990. The firm’s partners had changed substantially before the claim form was issued in 2009. The claim form was posted to the firm’s business address and acknowledged by solicitors acting under the firm’s professional indemnity arrangements.

Two former partners disputed effective service. The present partners also participated in the proceedings and brought Part 20 claims against former partners, although the claimant later accepted that no substantive claim lay against them. The court had to determine the validity and effect of service and acknowledgment of service, the status of the present partners for costs purposes, and the appropriate disposal of the Part 20 proceedings.

1. Service on former partners. A partnership is not a separate legal entity. Proceedings brought in the firm’s business name are substantively proceedings against the persons who were partners when the causes of action accrued. Under Civil Procedure Rules 1998 CPR 6.9, each such individual must be considered separately when identifying the proper address for service.
2. Where the claimant knows or has reason to believe that a former partner no longer carries on business at the firm’s address, paragraphs 6.9(3) to (6) require reasonable steps to identify a current address or an alternative place or method of service. An employee does not carry on business for this purpose because the employee has no business of their own. Service at the firm’s address was therefore not good service on either former partner.
3. Acknowledgment of service. The acknowledgment was signed by solicitors authorised under the firm’s insurance arrangements by a former partner who had been a partner when the causes of action accrued. Under PD 10 paragraph 4.4, it was effective on behalf of all relevant partners. In the absence of an express qualification, an acknowledgment in the firm’s name is construed as being on behalf of all persons who were partners at the relevant time. It waived the defects in service.
4. The court would alternatively have made a retrospective order under CPR 6.15(2). The proceedings had been brought to the former partners’ attention promptly, and they had had a full opportunity to participate. Those circumstances supplied both good reason for the method and place of service and sufficient reason for a retrospective order.
5. Costs and Part 20 proceedings. For CPR 44.3 purposes, “party” includes a person reasonably alleged to be a partner who participates to establish that no claim lies against them. The claimant’s prolonged correspondence and procedural conduct reasonably led the present partners to defend themselves and issue Part 20 claims. The claimant was ordered to pay their reasonable costs. The Part 20 claims were dismissed, save that the contractual indemnity claim against the former sole partner under the business sale agreement remained maintainable. Costs of the other Part 20 claims were ordered in accordance with the directions stated in the judgment.

This was a first-instance decision of the High Court (Chancery Division). The judgment records earlier case-management and interlocutory hearings but does not state any appellate decision.