Cable v Liverpool Victoria Insurance Co Ltd

A court considering whether to lift a stay obtained under the low-value road-traffic-accident procedure must first decide whether there has been an abuse of process. If there has, it must then decide what sanction is proportionate. Striking out is a remedy of last resort, not an automatic consequence of abuse or an administrative consequence of refusing to lift a stay.

Serious misuse of the Civil Procedure Rules 1998 and a pre-action protocol may amount to abuse, including the use of a Part 8 claim and a stay for a claim known to be unsuitable for that procedure. However, the court must balance the actual prejudice caused, the claimant’s substantive right to pursue an admitted claim, and the availability of lesser sanctions. A transfer from Part 8 to Part 7 is available where a claim has ceased to be suitable for the low-value protocol.

The appellant was injured in a road traffic accident. Liability was admitted. His solicitors began the claim under the low-value RTA Protocol, but later medical evidence and substantial loss of earnings meant that the claim was plainly unsuitable for that process.

They nevertheless issued a Part 8 claim before limitation expired and obtained a stay purportedly to complete the RTA Protocol. They later sought to lift the stay and transfer the claim to Part 7. The district judge found an abuse of process, refused the transfer and struck out the claim. Judge Wood QC dismissed the appellant’s appeal.

The appellant appealed to the Court of Appeal. The central issues were whether the solicitors’ conduct was an abuse of process, whether striking out was proportionate, and whether relief from sanctions should be granted for late service of the amended claim form and particulars.

1. Appeal allowed. The stay was lifted, the claim was transferred to CPR Part 7, and the appellant was granted relief from sanctions. The claim was not struck out.

2. There had been an abuse of process. When the Part 8 claim and stay were sought, the solicitors knew or ought to have known that the claim was far above the low-value limit and unsuitable for both the RTA Protocol and Part 8. They also sought a stay to complete a protocol which did not apply and did not use the stay for its stated purpose. Those matters involved misuse of the court process and, in part, misuse of the protocol process.

3. Compliance with pre-action protocols is expected under the Civil Procedure Rules 1998. In an extreme case, non-compliance may therefore amount to abuse of process. The RTA Protocol is closely integrated with the CPR and cannot be treated as irrelevant merely because much of the conduct occurs before formal proceedings.

4. The correct approach was the two-stage approach stated in Asturion Foundation v Alibrahim [2020] EWCA Civ 32: first determine whether there was abuse; secondly decide whether striking out is a proportionate sanction. The first-instance judge had wrongly treated striking out as the consequence of refusing to lift the stay. Abuse does not create an automatic or prima facie entitlement to strike out.

5. The demonstrated prejudice to the insurer was principally a one-year delay in receiving a properly detailed multi-track claim. There was no evidence that earlier use of the PI Protocol would have changed treatment, rehabilitation or expert evidence, that a limitation defence had been lost, or that the insurer had suffered reserving prejudice. Against that, liability had been admitted, the claim form had been issued in time, and striking out would force the claimant into an inferior and uncertain professional-negligence claim against his solicitors.

6. Indemnity costs through the hearing before the district judge and denial of interest on special damages for the same period were proportionate sanctions. Although late service was serious and lacked good reason, relief under Denton v TH White [2014] EWCA Civ 906 was justified when all the circumstances were considered.

• Court of Appeal (Civil Division): Allowed the appeal in [2020] EWCA Civ 1015. It lifted the stay, transferred the claim to Part 7, imposed costs and interest sanctions, and granted relief from sanctions.

• County Court at Liverpool, Judge Wood QC: Dismissed the appellant’s appeal from the district judge’s order.

• County Court at Birkenhead, District Judge Campbell: Found an abuse of process, declined to permit the claim to proceed under Part 7, struck out the claim, and refused relief from sanctions.