Elysa Alton v Powszechny Zaklad Ubezpieczen

An appellate court may interfere with a discretionary decision where the lower court makes an error of principle or reaches a conclusion outside the reasonable range. On a strike-out or amendment application, the question is whether the proposed claim has a real, rather than fanciful, prospect of success. A claimant need not establish that the claim will succeed, identify every foreign-law provision, or produce expert evidence unless arguability is genuinely in issue. The court should consider proportionate case management, including an unless order, and balance the prejudice of striking out against the prejudice to the defendant of permitting amendment. The Court provisionally considered that a change in the legal basis of a claim may arise from the same or substantially the same facts.

The claimant brought a personal injury claim arising from a road accident involving a Polish lorry. She initially sued InterEurope AG, the United Kingdom claims handler, and later obtained permission to substitute Powszechny Zaklad Ubezpieczen, the Polish insurer. Her amended pleading relied incorrectly on the European Communities (Rights Against Insurers) Regulations 2002 and the Third Party (Rights Against Insurers) Act 2010.

The defendant applied to strike out. The Deputy District Judge granted the application, considering that the pleading did not sufficiently establish a claim against the insurer. On appeal, the County Court judge set aside the strike-out order. The Court of Appeal considered whether the judge had been entitled to re-evaluate the matter and whether strike-out was proportionate, including whether the defect could be cured by amendment and whether limitation might bar the amendment.

1. Appeal dismissed. The County Court judge was entitled to interfere with the Deputy District Judge’s discretionary decision. An appellate court may intervene for procedural unfairness or irregularity, an error of principle, or a conclusion outside the generous ambit within which reasonable disagreement is possible: Carroll v Chief Constable of Greater Manchester Police [2017] EWCA Civ 1992.
2. The Deputy District Judge made three material errors. He wrongly doubted that a proper pleading could be formulated against the insurer, treated the claimant as undecided about applying to amend, and failed to consider an unless order. He also failed to evaluate the balance of prejudice.
3. The relevant amendment question was whether the proposed pleading had a real, rather than fanciful, prospect of success. That is the merits threshold for strike-out, reverse summary judgment and amendment applications: Kawasaki Kisen Kaisha Ltd v James Kemball Ltd [2021] EWCA Civ 33. The material before the Deputy District Judge showed at least an arguable direct claim under Polish law, and in practical terms made its existence overwhelmingly likely.
4. Failure to identify the precise provision of Polish law was not critical. Nor was the absence of foreign expert evidence. Foreign law is generally a question of fact requiring proof, but expert evidence is not invariably required on an amendment application. It is appropriate at that stage only where a genuine issue exists as to whether the proposed claim meets the threshold of arguability.
5. The Court expressed the provisional view that the amended claim arose out of the same or substantially the same facts for the purposes of section 35 of the Limitation Act 1980 and rule 17.4(2) of the Civil Procedure Rules 1998. A claim may arise from substantially the same facts despite depending on a new fact: Mulalley v Martlet Homes Ltd [2022] EWCA Civ 32. The limitation issue remained for the County Court if necessary.
6. The principle that a court will normally allow an opportunity to cure a defective pleading where there is reason to believe the defect can be remedied, stated in Park v Kim [2011] EWHC 1781 (QB), is not freestanding. It reflects the Overriding Objective. An unless order could address uncertainty about the claimant’s intention to amend, and costs could address costs prejudice.
7. The balance of prejudice strongly favoured refusing strike-out. The claimant risked losing a claim in which liability was unlikely to be disputed, whereas the insurer would suffer no material prejudice from a properly controlled amendment. The Judge’s decision disclosed no error of principle and fell within the proper evaluative range.

• Court of Appeal (Civil Division) — appeal from the County Court at Dartford dismissed. The Court upheld the County Court judge’s order setting aside the Deputy District Judge’s strike-out order.
• County Court at Dartford — His Honour Judge Parker set aside the strike-out order made by Deputy District Judge Pithouse on 21 July 2023.
• County Court at Dartford — the Deputy District Judge had struck out the claim following the defendant’s application.