Ethan Thomas Wragg & Ors v Opel Automobile GmbH & Ors

On a challenge to discretionary case-management decisions, the appellate court must respect the first-instance judge’s broad evaluative margin. It may intervene for legal or procedural error, irrelevant or omitted considerations, or a plainly wrong result, while deferring on weight. The duty of full and frank disclosure on a without-notice application remains unchanged in group litigation, although proportionality and the complexity of individual limitation issues may affect the appropriate sanction. For extensions of time to serve a claim form under CPR 7.6(2), the court must identify the actual cause of delay and apply a calibrated approach. A defendant’s lawful insistence on service in accordance with the rules, including through a foreign process, is not itself a good reason for delay. Where limitation may be defeated, exceptional circumstances are required. Group complexity qualifies only where evidence shows that it caused the delay.

The claimants brought group claims alleging that diesel vehicles manufactured or supplied by the defendants contained unlawful defeat devices. The German defendants challenged orders permitting service out of the jurisdiction and extending time for service. The first 26 without-notice applications did not disclose potential limitation defences, and later applications addressed limitation incompletely.

Senior Master Fontaine found a breach of the duty of full and frank disclosure but declined to set aside the service-out and extension orders. Mr Justice Constable granted permission to appeal. The appeal concerned the proper sanction for non-disclosure and whether the evidence established a good reason or exceptional circumstances for extending time where limitation might be affected.

1. Disposition. The appeal was allowed in part. The refusal to set aside the service-out orders was upheld. The orders arising from the 10 November 2021 Extension Application and the Omnibus Application were set aside, and fresh extensions were refused. The precise consequential scope of the order was reserved for further submissions.

2. Appellate approach. The court applied the principles in Royal & Sun Alliance Insurance Plc v T&N Ltd [2002] EWCA Civ 1964, Azam v University Hospital Birmingham NHS Foundation Trust [2020] EWHC 3384 and ST v BAI (SA) trading as Brittany Ferries [2022] EWCA Civ 1037. An appellate court should interfere with a discretionary decision only for a recognised error of law or fact, procedural unfairness or irregularity, irrelevant or omitted considerations, or a plainly wrong result. The weight given to relevant factors remains primarily for the first-instance judge.

3. Non-disclosure. The duty to give full and frank disclosure on a without-notice application includes adverse matters and remains applicable in group litigation. The court applied the principles in Knauf UK GmbH v British Gypsum Ltd [2002] EWCA Civ 1570, Arena Corp. Ltd v Schroeder [2003] EWHC 1089 (Ch) and Re OJSC ANK Yugraneft v Sibir Energy plc [2008] EWHC 2614 (Ch). Discharge is the general response to a breach, but the court retains a sparing discretion to continue or regrant relief. Culpability, the importance of the omitted matter, proportionality, the merits and the risk of injustice must be assessed. The sanction is penal and deterrent in character.

4. The service-out applications were not set aside. Potential limitation issues were material, but the individual circumstances of tens of thousands of claimants could not sensibly have been resolved summarily at that stage. The omission was a breach, but the judge was entitled to regard it as a wrong judgment call closer to an innocent breach than the egregious conduct considered in The Libyan Investment Authority v JP Morgan Markets Ltd [2019] EWHC 1452 (Comm). A costs sanction could mark the breach without terminating claims unaffected by limitation.

5. Extensions of time. Under CPR 7.6(2), the court must identify the actual reason for delay and adopt a calibrated approach. Difficulty in effecting service may constitute a good reason, but a weak reason is unlikely to suffice. Where a limitation defence will or may be prejudiced, the expiry or potential expiry of limitation is a matter of considerable importance and the circumstances must be exceptional, meaning out of the ordinary. The balance of hardship arises only after a good reason has been shown.

6. A foreign defendant is entitled to insist on service in accordance with the rules and has no duty to assist, cooperate or accept service through English solicitors. The claimants’ hope that the German defendants would change their position was therefore not a good reason. Delays caused by the Foreign Process Service or Hague Convention process may justify an extension only where the evidence shows that they actually caused the delay.

7. The complexity and expense of group litigation could amount to a good reason or exceptional circumstances where it was shown to have caused the delay. Here, however, there was no evidence that coordination difficulties caused the failure to commence the service-out process promptly, or the delay between October 2021 and June 2022. The judge therefore erred in principle in retaining the extension orders. The limitation non-disclosure was also more serious in the extension applications because it affected the applicable exceptional-circumstances test.

• High Court (King’s Bench Division), on appeal — On 14 May 2024, Mr Justice Constable upheld the service-out orders but set aside the relevant extension orders and refused fresh extensions.
• High Court (King’s Bench Division), before Senior Master Fontaine — On 23 October 2023, Senior Master Fontaine refused to set aside the service-out and extension orders despite finding material non-disclosure. Permission to appeal was initially refused and was granted by Mr Justice Constable on 12 February 2024.