Share on LinkedIn Tweet This Share on Facebook Share Tweet Share Lewis v Ward Hadaway – A wake up call for claimant litigators regarding issue fees, abuse of process and limitation Introduction A High Court decision handed down before Christmas but published on Lawtel on 05.01.2016 makes for worrying reading for claimant litigators. The dramatic increase in court fees last year (for example, £10,000 fee for a £200,000 case) has created yet another bar to access to justice. This is particularly so in the realm of personal injury. Badly injured claimants with +£200,000 claims usually find themselves out of work, reliant on benefits and without a spare £10,000. With ATE premiums no longer being able to be recovered from defendants, there is no readily available source of funding for issue fees. The circle of despair continues if a defendant refuses to make an interim payment pre-action and proceedings need to be issued in order to make an application for one.The consequence is that many claims are issued with lower statements of value than the real value of the case and consequently a lower fee being paid. The claims are then amended at a later date to reflect the true value with the difference in the issue fee being paid. Often this is done after a successful application for an interim payment. Lewis and others v Ward Hadaway  EWHC 3503 (Ch) indicates that this practice can lead to dire consequences. The Facts The case concerned 31 claims brought against a firm of solicitors in relation to alleged professional negligence in conveyancing transactions. The letters of claims claimed substantial sums, in each case running into hundreds of thousands of pounds. All claims were issued, but not served, just prior to limitation expiring. Each claim form had statements much lower than the letters of claim, ranging from £300 or less to £300,000 or less. As a result low issue fees were paid. In each case the claim form was amended just before service to claim the larger sums and the difference in the issue fee was paid. The Decision Mr John Male QC, sitting as a Deputy High Court Judge, found that issuing a claim form with a statement of value lower than the true value of the claim and in the knowledge that it would be amended later to increase the value was an abuse of process. This was so even though the claim forms were amended and the increased court fee paid prior to service. Abuse of process was found [paragraphs  to  of the judgment] because:1. It was always the claimants’ intention to amend the claims at a later stage for no good reason other than to pay a reduced fee;2. Although the proper fee was later paid, this caused disruption to cash flow for the court system and the increased administration caused by the need to process two sets of fees and claim forms;3. There was a public interest in claimants not behaving in this way;4. There was a possible advantage gained over the defendant by the claimants being able to stop time running by paying a lower issue fee to issue the claims. The Judge was buoyed by the fact that other District Judges had reached the same conclusion on the same issue in cases involving the same firm of solicitors as in this case. Importantly the claims were not struck out because of lack of prejudice to the defendant and because the period of abuse was limited .There was, however, a serious sting in the tail for 11 claimants. Their claims were delivered to the court office prior to limitation expiring although the claim forms were issued after limitation expired. The Judge gave summary judgment to the defendant in those cases. Usually there is no concern if a claim form is issued out of time as long as it was delivered to the court office in time. Paragraph 5.1 of Practice Direction 7A provides that in this situation the claim is “brought” for the purposes of the Limitation Act 1980 on the earlier date. The issue in this case was when the action was “brought”. The Judge referred to Page v Hewetts  EWCA Civ 805 and said the question was whether the claim forms and request for information were accompanied by “the appropriate fee”. In the circumstances the Judge found that these 11 claim forms were not accompanied by the appropriate fee. He said that paying the “appropriate fee” did not cover the payment of a fee in circumstances where the act of payment was an abuse of process . As the appropriate fee was not paid in time these 11 claims were statute barred. Conclusion As this decision stands it should be of serious concern to all litigators. It is also another reminder not to leave issuing claims until the last minute. There is some comfort to personal injury claimants on the summary judgment point. Because these were professional negligence claims there was no s.33 Limitation Act 1980 discretion available to the claimants, as there would be in a personal injury claim. There is some suggestion of what claimant litigators faced with the dilemma of an impecunious claimant unable to afford the proper issue fee could do at  to avoid a finding of abuse of process:"I agree that, as Mr Evans argued, there could be a spectrum of cases where claims and fees might be limited and where a lesser fee was paid at the outset and where conduct might be acceptable. So, at one end of the spectrum there might be an example like that given by Mr Evans in oral argument of, say, a financially strapped litigant who knows that he will soon receive a substantial legacy, who informs the defendant of his parlous financial position and of the imminent legacy, who seeks the defendant’s agreement to his paying the fees in the way in which Robinson Murphy paid them and who also informs the Court of what he is doing. In other words, there would be complete transparency in what was done and the agreement of both the defendant and the Court would be sought. It may well be that, in that sort of case, there would be no abuse of process."This approach carries its own risks of course. In the meantime requests for interim payments pre-issue to cover the issue fee and consideration of funding for issue fees needs to be addressed with claimants early on. Contact us Jasmine Murphy This article was written by Jasmine Murphy. If you would like to discuss any of the topics in this article, please contact Jasmine.