Higgins & Ors v ERC Accountants & Business Advisers Ltd

Service of a claim form requires compliance with the Civil Procedure Rules and an objective assessment of what was communicated. Sending a copy of an issued claim form for information does not amount to service where the surrounding circumstances show no intention to serve, the recipient solicitor has not confirmed authority to accept service, and the required sealed claim form and response pack are absent.

Under CPR r.6.15, knowledge of the claim form is necessary but insufficient. A good reason must be shown, assessed in all the circumstances. Solicitors’ error, the defendants’ failure to warn of the defect, and the defendants’ knowledge of the claim will not ordinarily suffice, particularly where allowing retrospective service would deprive them of a realistically arguable limitation defence.

The claimants brought proceedings against their former accountants and advisers for alleged contractual, negligent, fiduciary and statutory breaches. The claim form was issued on 19 May 2016. Copies were sent to the defendants’ solicitors on 20 July 2016, expressly to confirm that proceedings had been issued, while extensions of time for service were subsequently agreed.

In March 2017, the claimants sent particulars of claim but not the claim form. The defendants applied to set aside service and sought declarations concerning jurisdiction. The claimants sought declarations that service had occurred, or retrospective relief under CPR rr.6.15 and 6.16, and an extension under CPR r.7.6. The central issues were whether the claim form had been served and, if not, whether the court could validate or extend service retrospectively.

1. The applications were dismissed in substance. The claim form was not served by the letters of 20 July 2016. Objectively construed in context, those letters sent copies only to confirm that proceedings had been issued as a protective measure. They did not communicate an intention to serve the claim form. The solicitors had not confirmed authority to accept service, and neither a sealed court copy nor a response pack was supplied.
2. Service on a solicitor requires compliance with CPR r.6.7. A solicitor does not generally have implied authority to accept service. Electronic service also required the prior written indication required by paragraph 4.1 of Practice Direction 6A. These requirements were not met.
3. The court followed the approach in Hills Contractors & Construction Ltd v Struth, [2014] 1 WLR 1, that a copy of a claim form is insufficient where the rules require a court-sealed copy. The court also rejected reliance on United Utilities Group Plc v Hart, an unreported County Court decision, because the High Court authority should be followed and was not plainly wrong.
4. Under CPR r.6.15, the defendants’ receipt of the claim form and knowledge of the allegations were necessary but insufficient. The question was whether, in all the circumstances, there was a good reason to validate the steps taken. The court applied the principles in Abela v Baadarani, [2013] UKSC 44, and Barton v Wright Hassall LLP, [2016] EWCA Civ 177.
5. No good reason existed. The failure resulted from the claimants’ solicitors’ error, although proper service could readily have been effected within the extended period. The defendants’ solicitors were not obliged to correct the claimants’ mistake where doing so might prejudice their clients’ limitation position. The potential loss of a realistically arguable limitation defence was a material consideration.
6. CPR r.6.16 imposed the higher threshold of exceptional circumstances, which was not met. CPR r.7.6(3) also prevented a late extension because the claimants had not taken all reasonable steps to serve within the extended period. The court did not determine whether the claims were statute-barred. The current claim was provisionally to be struck out or declared unserved, with the CPR r.7.6 application dismissed.