Higgins v. ERC Accountants and Business Advisors Ltd.

The court held that the Claim Form had not been validly served. The judge applied the Civil Procedure Rules (in particular Parts 6 and 7 and Practice Direction 6A) and concluded that service on a defendant's solicitors requires either written authorisation under CPR r.6.7 or compliance with the rules for electronic service in PD6A; neither requirement had been satisfied. The claimant's reliance on CPR r.6.15 (retrospective validation) and r.6.16 (dispensing with service) failed because the material did not establish a good reason or exceptional circumstances, and the claimant had not taken all reasonable steps required by CPR r.7.6(3)(b) to effect service within the extended period. The judge also took into account the potential impact on limitation defences under the Limitation Act 1980 and the claimant solicitor's negligence in failing to effect proper service.

Background and parties: The claimants sued their former accountants and advisers for loss said to arise from a tax mitigation scheme and (in one distinct claim) fraud by an employee. The Claim Form was issued on 19 May 2016 but was not served in the manner required by the Civil Procedure Rules. The claimants sought retrospective validation or extension of time for service; the defendants challenged service and sought declarations and other relief. This was first instance Chancery Division litigation about service, jurisdictional and limitation consequences.

Nature of application: The claimant sought declarations that the Claim Form and/or Particulars of Claim had been validly served, or orders under CPR r.3.1 (and related rules) correcting defects, or orders under CPR r.6.15 or r.6.16 validating or dispensing with service, or an extension under CPR r.7.6. The defendants sought orders that service be set aside and declarations that the English court lacked jurisdiction or should not exercise jurisdiction in respect of claims against the second defendant.

Issues framed: (i) Was the Claim Form validly served (notably by enclosure with a 20 July 2016 letter)? (ii) If not, could the failure be corrected or validated under CPR r.6.15 or r.6.16? (iii) Could time be extended under CPR r.7.6 after expiry of the extended period? (iv) What role did consent orders, solicitors' conduct and limitation arguments play?

Court's reasoning: The judge analysed the 20 July 2016 letters in context and concluded objectively they were informational (to record that proceedings had been issued) rather than attempts to effect service. Key defects were that only copies (not court-sealed originals) were sent, no response pack was provided, and no written authority had been given by the defendants' solicitors to accept service (CPR r.6.7). Email service requirements in Practice Direction 6A were not satisfied. The court emphasised that receipt of the documents alone was not sufficient for retrospective validation: the claimant had to show a good reason under r.6.15 (and exceptional circumstances under r.6.16). The claimant's solicitor had left service until late, had not confirmed authority to accept service, and thereafter attempted imperfect methods; this conduct amounted to negligent handling rather than a good reason for validation. The judge also gave weight to the defendants' entitlement to preserve a realistically arguable limitation defence. On CPR r.7.6 the claimant could not show that all reasonable steps had been taken to serve within the period. The practical consequence was that the Claim Form had not been validly served and the claimant's applications to validate or extend time failed; the judge indicated the appropriate order would (provisionally) strike out the current claim and declare the Claim Form not served within its period of validity and dismiss the r.7.6 application.

This is a first instance judgment. The court held that the Claim Form was not validly served. The claimant's applications under CPR r.6.15 and r.6.16 to validate or dispense with service were refused for lack of a good reason or exceptional circumstances, and the application to extend time under CPR r.7.6 failed because the claimant had not taken all reasonable steps to serve within the extended period. The judge indicated that the appropriate order (provisionally) was to strike out the current claim and/or declare that the Claim Form had not been served within its period of validity and to dismiss the r.7.6 application; he did not make a determination on statute-barred limitation issues or a jurisdictional declaration at that stage.