Out of time and out of luck: extending time for service out of the jurisdiction

This article was first published in the Practical Law Dispute Resolution Blog.

The recent decision of Cox J in Foran v Secret Surgery Ltd and others is a salutary tale emphasising the strict approach of the courts to applications to extend time for service of the claim form. Here, the fact that service had to be effected out of the jurisdiction did not avail the claimant, with the result that her claim was time-barred against three of the four defendants.

Background

The claimant had booked a package holiday to Poland, which included undergoing plastic surgery. The first defendant was the tour operator, domiciled in England. The second, third, and fourth defendants (the Polish defendants) were all domiciled in Poland and were the insurers, surgeon, and hospital involved in the cosmetic surgery, respectively. The claimant alleged that the surgery had been carried out negligently, leaving her with extensive scarring, and that she had not received sufficient aftercare. She claimed in excess of £50,000.

After issue, there was a delay of over four months before the claimant sought advice as to service in Poland. The claimant eventually issued an application for extension of time for service of the claim form under CPR 7.6(2). Later, the six month deadline in CPR 7.5(2) for service of the claim form out of the jurisdiction expired.

A Master made an ex parte order on the papers listing the matter for a hearing and extending time for service in the meantime. The defendants were to be put on notice of the hearing, and the claimant’s solicitors wrote to the Polish defendants enclosing the documents sent to the first defendant, by way of “informal service”.

At the hearing, the Master granted the application, finding that the claimant had taken all reasonable steps to serve the Polish defendants, who successfully appealed that decision.

The arguments

It was accepted by all parties that the Master had erred in finding that the application was made within the limitation period (and therefore also erred in distinguishing Bayat v Cecil on that basis).

The Polish defendants argued that the claimant had not actually provided a good reason for failing to serve the claim form on them within the prescribed six month time limit, but had merely rehearsed the facts leading to the application being made. They also highlighted that the extension of time for service had effectively deprived them of a limitation defence.

The claimant argued that the case was outside the norm, owing to the difficulties of having documents translated, and trouble corresponding with the relevant foreign authorities. These complicating factors were said to constitute a good reason for failing to serve the claim form in time.

The decision

Cox J referred to a trio of Court of Appeal authorities on applications for extension of time: Hashtroodi v Hancock, Collier v Williams and Bayat v Cecil. The cumulative effect of Hashtroodi and Collier is that a “calibrated approach” would be taken when deciding applications for extension of time, in accordance with the overriding objective. However, where the application would be more likely to succeed, the reason provided for failing to serve within the time limit would be better. Bayat reiterated a point made in Collier: that service of the claim form is a crucial step in proceedings, and that if there is any background issue which might prevent a claimant progressing a claim, service should be effected first, before an appropriate application being made subsequently. Bayat also stated that where a defendant’s limitation defence would or might be prejudiced by an extension of time for service, the court should effectively apply the test under CPR 7.6(3), which requires a claimant to demonstrate that all reasonable steps had been taken to serve the claim form. Extension of time for service effectively extends the limitation period; claimants’ arguments relying on the prejudice in being denied a valuable claim should be rejected as the corollary to that suffered by defendants in losing a limitation defence.

The judge found these principles to be of general application. As a general principle, it was also stated that difficulties associated with a cross-border element to a claim are already accounted for in the “generous” period of six months, as opposed to four, for service of the claim form. Litigants should consciously act with more urgency in such cases, because issues of the sort which arose in this case may be anticipated.

Difficulties in translating documents and obtaining medical reports were not set out in the supporting witness statement, and neither did it exhibit any documents or correspondence. The judge refused to take into account matters which were not properly evidenced, and emphasised the importance of a full explanation being given for any periods of delay. In particular, mention should have been made of any attempts to expedite service and why those attempts did not succeed.

The judge also considered that the Polish defendants had effectively been deprived of a limitation defence, and had regard to the fact that the limitation period had expired almost six months prior to the application being made.

Comment

This decision clarifies that the principles set out in Hashtroodi, Collier, and Bayat are of general application, and do not only apply to service within the jurisdiction. What is striking, however, is that there was no mention of the Mitchell/Denton three-stage test, which arose later than the authorities relied upon by Cox J, and which has since been applied in a variety of procedural contexts. Self-evidently, the test in CPR 7.6(3) is more stringent than that in Denton, but this was an application under CPR 7.6(2). It is perhaps surprising, then, to find this rigid test “imported” wholesale in the way suggested in Bayat (mandatory requirements and all), without explicit regard to what would be just in all the circumstances of the case.

Of interest to litigators are the comments concerning supporting evidence to an application of this nature. When preparing such an application, it is clear that the evidence in support should be as exhaustive as possible. The reasons given by Cox J suggest that the bench may take an analytical approach to such evidence, requiring a full explanation for each and every period of delay. This would potentially require an account of advice given by foreign lawyers on the subject of service and will be unwelcome news to any client faced with the already considerable expenses of having to effect service out of the jurisdiction.

Finally, it appears that the recent changes to court fees and litigation funding have not altered the court’s approach to applications of this nature. Bayat, for example, concerned a claimant attempting to source funding before progressing the claim, and it appears that a litigant will still be expected to effect service of the claim form on time in these circumstances. Though standstill agreements can be, and frequently are, negotiated between the parties in these circumstances, it appears that the approach taken by the courts is to require claimants to incur significant expense in issuing and serving the claim form before these matters will even be taken into account in support of any application for extension of time or a stay.