Professional negligence claims against solicitors often involve missed Court deadlines.
The courts used to be fairly sympathetic to litigants who could give good reasons for any lapse, but a significant change took place in 2014. Alongside new costs rules the Courts suddenly became much more rigid in their requirement for the Court’s rules to be complied with.
Negligence claims against solicitors rose rapidly as they were caught out by the new regime and their clients lost ground in their legal cases.
As part of a general rowing back from that approach, a July 2019 case has allowed a late filed defence to defeat an application for default judgment. On the Rules the decision seems correct, but it sends a worrying signal to parties to litigation if something as fundamental as filing a defence on time is now without sanction.
The time limit for a defence
When a Claim Form is served the Defendant usually has 28 days to file a defence, or up to 56 days if an extension is agreed with the Claimant. If they fail to file a defence within that period the claimant is entitled to request judgment. This is called judgment in default (i.e of a defence). It is most useful when the defendant has no intention of defending and the claimant needs to move swiftly on to enforcement action.
Clements Smith v Berrymans Lace Mawer solicitors
However in the case of Smith v Berrymans, the Court decided that a defence filed late was sufficient to evade an application for judgment.
The claimant would have been extremely keen to have valid judgment on her claim for personal injury damages of £3m, but the defendant much prejudiced by that if it had real defences. Had the judgment in default been valid then they would have had to discuss their position with their solicitors and potentially a professional negligence claim could have resulted for any solicitors’ failings in the conduct of the claim.
In reality it seems that confusion and delays were caused by the Court itself. An application to extend time to serve a defence was made by the defendant on 30 September 2018, but that was not passed to a judge in time to be dealt with before the nominal date for service of a defence on 4 October had passed. The application for default judgment then came in from the claimant on 17 October, but again was not dealt with particularly fast. Two competing applications had been made in good faith.
The application for an extension of time to serve the defence was then listed to be heard on 15 February 2019 but in fact the defendant was able to file a defence on 28 December. This was out of time, although an application for more time had been made within the first period.
Default judgment was entered on 15 February 2019. The judge was being asked to set it aside and allow the claim to continue.
Defence stands despite being late
The judge decided that, despite the defence being filed over ten weeks late, it could stand and the judgment in default was set aside.
This favours the defendant and perhaps indicates a leniency towards the Rules but it was a decision based on the letter of the rules. It may be subject to appeal given how the outcome appears to be contrary to the intention of having a time limit in Court rules.
Solicitors will want to monitor the development of this case carefully since a request for more time to serve a defence is very often made. If no consent is given by the claimant and an application is needed then the position is clear enough for now; but it may change on appeal.