Raj Wadhwani & Anor v Natwest Markets PLC (formerly The Royal Bank of Scotland PLC)

A claim may be struck out for warehousing where the claimant deliberately leaves proceedings on hold, even if the claimant intends eventually to pursue them. The court must first decide whether the conduct amounts to abuse of process and then whether strike-out is proportionate.

The court considers subjective intention, the totality of the evidence, the length of delay, reasons for it, prejudice, responsibility for progressing litigation and the effect on court resources. Exceptional delay, prejudice to oral evidence and inadequate preparation may justify strike-out.

The claim arose from an interest-rate swap entered into in 2008. The claim form was issued in June 2015 and particulars of claim were served in September 2015. By consent order, the time for serving a defence was extended until 28 days after service of a schedule of loss.

No schedule was served for more than eight years. The claimants applied to lift an alleged automatic stay under CPR 15.11, amend the claim and obtain relief from sanctions. The defendant applied to strike out for breach of rule, abuse of process by warehousing or prejudicial delay. The issues were whether CPR 15.11 applied, whether relief should be granted and whether the claim should be struck out.

1. CPR 15.11. No automatic stay arose. The consent order superseded the ordinary procedural position, so the six-month period had not begun. It would begin only 28 days after service of the schedule of loss.
2. Relief from sanctions. Relief was refused. The breach was serious and significant, and the reasons advanced did not constitute a good reason. The claimants’ decisions to prioritise business, pursue abandoned Tier 2 losses and change experts caused the delay. The proceedings were exceptionally stale and had not been conducted efficiently. The Bank also faced prejudice concerning oral evidence about the 2007 meeting and causation, and the involvement of former employees.
3. Breach of rule. The admitted breach of CPR 1.3 could support strike-out where the failure to progress proceedings was serious and stark. The same circumstances justified refusal of relief.
4. Warehousing. Warehousing describes conduct in which proceedings are deliberately not pursued or are effectively put on hold. It may exist even where the claimant intends eventually to continue. The first stage requires assessment of subjective intention from the totality of the evidence and circumstances. Inactivity and the length of delay may support an inference of warehousing.
5. At the proportionality stage, alternative orders, including unless orders, were insufficient. The nearly nine-year delay, inadequate preparation, issue at the end of the limitation period and prejudice to oral evidence made strike-out just and proportionate.
6. The claim was struck out under CPR 3.4(2)(c) and CPR 3.4(2)(b). The inherent-jurisdiction ground was not determined.