Ndole Assets Ltd v Designer M&E Services UK Ltd

Service of a claim form and particulars of claim is a reserved legal activity because it forms part of the prosecution of proceedings and is a formal step required in litigation. A litigant in person may nevertheless serve those documents personally or delegate service to an agent. The validity of service depends on proper service of the documents, not on the identity of the person physically serving them.

An assignment described as a debt remains subject to maintenance and champerty principles if its true substance is a claim for damages arising from disputed contractual breaches. Summary judgment is inappropriate where the assignee has a realistic prospect of establishing a genuine commercial interest and the evidence requires a trial.

The claimant, a litigant in person, brought proceedings concerning claims assigned to it by Sheldon Construction SRVC (London) Limited against the defendant, a former subcontractor. The defendant applied for a declaration that the claim form and particulars of claim had been invalidly served because service was carried out by an unqualified claims consultant. It also sought summary judgment on the basis that the assignments amounted to maintenance or champerty.

The court considered the meaning of reserved legal activity under the Legal Services Act 2007, the effect of service by an agent, the true character of the assigned claims, and whether the evidence established that the claim had no realistic prospect of overcoming the maintenance and champerty objection.

1. Service. Service of a claim form and particulars of claim falls within the prosecution of proceedings under Schedule 2 paragraph 4(b) of the Legal Services Act 2007. It is also an ancillary function because it is a formal step required in the conduct of litigation. The court rejected the argument that Agassi v S Robinson (HM Inspector of Taxes) [2005] EWCA Civ. 1507 endorsed a list of activities as administrative support. That list recorded counsel’s submissions and was not adopted by the Court of Appeal.
2. The CPR does not override substantive statutory restrictions. Solicitors may delegate service to process-servers while remaining responsible for the reserved activity. A litigant in person may likewise delegate service to an agent. The service was therefore valid.
3. The court expressed concern about correspondence which failed to make clear that CSD Legal was not a firm of solicitors, but considered that conduct irrelevant to the validity of service.
4. Maintenance and champerty. The true categorisation of the cause of action controls. The assigned claims were, on the material presently available, claims for damages or losses arising from disputed breaches and termination, rather than bona fide debts. Describing them as debts could not avoid maintenance and champerty principles.
5. The governing principle in Trendtex Trading Corporation v Credit Suisse [1982] AC 679 requires an assignee of a bare right to litigate to show a genuine commercial interest in enforcing the claim for its own benefit. The evidence raised an arguable case that neither Ellme nor Ndole had such an interest, but it did not make the defence unanswerable. Following Mellor v Partridge [2013] EWCA Civ. 477, Ndole had a realistic prospect of success. Summary judgment was refused.
6. The court rejected the defendant’s application on service and refused summary judgment on maintenance and champerty. It invited submissions on security for costs and the possibility of a preliminary trial of the maintenance issue.

First-instance decision. The judgment itself records no appeal or earlier decision in the same proceedings.