Shapland v Palmer [1999] EWCA Civ 1061 (23 March 1999)

On 26th March 1993 the plaintiff suffered a whiplash injury when the defendant drove into the back of her motorcar. The defendant at the time was driving her company car in the course of her employment. The company, Headway Home and Law Publishing Limited (the Company), and the defendant were both entitled to be indemnified against liability for the accident under the Company’s policy issued by the Provincial Insurance Company. Liability was never disputed and, indeed, within a very few months the insurers made an interim payment of £480 to cover the plaintiff’s own policy excess (her vehicle damage being repaired under a knock-for-knock agreement), loss of vehicle use, and osteopathy treatment. The medical position, however, was then still unclear.

The plaintiff issued proceedings initially against the Company. That was on 26th March 1996, the very last day of the three year primary limitation period. The proceedings were by summons in the Kingston Upon Thames County Court. The summons, however, was not served during the four month period of its validity: it was sent by DX to the defendant Company’s solicitors at the very end of that period and the deemed date of service was one day out of time. Those proceedings, therefore, were later struck out. The strike out application was made on the 6th February 1998 and granted by the District Judge on the 13th July 1998, the plaintiff’s appeal against that order being dismissed by Judge Bishop on 2nd September 1998.

What this appeal concerns is a second similar action brought on 21st August 1998 not against the Company in respect of their vicarious liability for the defendant’s negligence but rather against the defendant driver herself. This second action is, of course, out of time so that the plaintiff needs the primary limitation period (three years under s.11 of the Limitation Act 1980) to be disapplied. The court’s discretion to disapply it arises under s.33 of the Act. These sections are too well known to need setting out here.

The Walkley principle would clearly have precluded the plaintiff from obtaining such a disapplication order had she brought the second action, like the first, against the Company itself. Where it applies, I should note, there is simply no s.33 discretion to exercise. The first question now arising, however, is whether the fact that she brings it instead against the defendant driver should take the case outside the Walkley principle.

On 2nd September 1998 Judge Bishop (on the same occasion as he dismissed the plaintiff’s appeal against the striking out of the first action, a ruling not now contested) held that the Walkley principle applied to bar the second action no less than the first. He observed that “the proposed claim against Mrs Palmer is for all practical purposes the same” as the first claim; that “this proposed second action has to be a device to try or to attempt to resurrect an action which has come to an end”; and that “this will be an attempt to have a ‘second bite of the cherry’”. On that ruling, of course, the Judge had no discretion to exercise and therefore never called for the defendant’s submissions upon how such a discretion should be exercised. That said, he gave a clear indication that but for the Walkley principle he would have been inclined to let the second action proceed.

The plaintiff now appeals against the Judge’s ruling that the Walkley principle applies to this action and contends that there is indeed a discretion here which should now be exercised in her favour. The defendant seeks to uphold the Judge’s ruling (inviting this court to make the modest extension to the Walkley principle which he recognises is necessary to his submission), contending in the alternative that even if strictly a s.33 discretion arises here, it should in the circumstances of this case not be exercised in the plaintiff’s favour.

"The provisions of section 2A [now s.11] are those which require an action for personal injuries to be brought within three years. So subsection (1)(a) [now s.33] must be contemplating a case in which, because the three years have expired without an action being brought, section 2A applies to the prejudice of the plaintiff. But if the plaintiff has brought his action within the three years, how has he been prejudiced by section 2A? This I fail to understand. If this argument is sound, the respondent’s case fails in limine. He brought his first action within the normal limitation period, and if he has suffered any prejudice, it is by his own inaction and not by the operation of the Act."

Lord Wilberforce was there saying that as a matter of construction the particular prejudice to which the s.33 discretion is directed is that occasioned by the plaintiff not having issued his proceedings within the primary three year limitation period. Once he has issued his proceedings within that period, then, for whatever reason they have ceased to exist - whether through failure to serve, strike out for want of prosecution, or discontinuance - s.33 simply has no application.

Although Lord Wilberforce observes that any prejudice resulting from the ultimate ineffectiveness of the first proceedings is due rather to the plaintiff’s inaction than to the Act (i.e. the proceedings not having been issued in time), this observation seems to me strictly outside the ratio. It is, after all, plain that the s.33 discretion arises notwithstanding a plaintiff’s solicitors’ perhaps far greater negligence in failing ever to have issued proceedings within the primary limitation period in the first place. Indeed, as Lord Diplock expressly recognised in Thompson v Brown [1981] 1 WLR 744 at 752, that is an undoubted anomaly arising from the Walkley principle.

I accordingly understand the Walkley principle to exclude from s.33 only actions which involve the same defendant and the same cause of action as was the subject of earlier, timeous proceedings. It follows that strictly it does not catch the plaintiff’s second action here. That a cause of action against a personal defendant is not the same as one alleging vicarious liability on the part of a principal or employer is trite law. Assume, for example, that the plaintiff here had successfully pursued her claim against the Company and then found it uninsured and insolvent, she would still have been able to sue Mrs Palmer as a joint tortfeasor - see ss.3 and 4 of the Civil Liability (Contribution) Act 1978. Or suppose that during the first proceedings the question of the Company’s vicarious liability for Mrs Palmer’s negligence had been put in issue: it cannot be doubted that then, even assuming the primary limitation period to have elapsed, the plaintiff would have been entitled to apply to join Mrs Palmer as second defendant under the provisions of ss 35(2)(b) and 35(3) of the 1980 Act.

Whitfield concerned a plaintiff who had suffered permanent injury through radical surgery to her shoulder carried out by a general surgeon (Mr Cook) following a mistaken report from a consultant cytologist (Dr Robinson) that the shoulder was the site of a malignant lesion. Ms Whitfield sued first, and in time, Mr Cook and the Health Authority (the latter in respect of Mr Cook’s alleged negligence) and, the first writ never having been served, secondly, out of time, just the Health Authority (this time in respect of both Mr Cook’s and Dr Robinson’s alleged negligence). Clearly the Walkley principle operated to bar the second action insofar as it sought to rely (as had the first) on the Health Authority’s vicarious liability for Mr Cook’s negligence. But what about the claim against Dr Robinson and the Health Authority’s vicarious liability for negligence on his part? It was never suggested there that Walkley prevented a s.33 discretion arising in respect of this part of the case. Mr Stanton for the plaintiff submits that that was because plainly Walkley has no application where different causes of action are being pursued - in that case for different negligent acts albeit (as to the Health Authority) against the same party; here the same negligent act but alleged against a different party. Mr James on the other hand submits that the very fact that the Walkley argument was not advanced there means that the case is of no authority on the point.

"Had the first solicitors acted properly, Dr Robinson would have been named in the 1987 writ, and Walkley would have applied to rule out the applicability of s.33 in respect of his negligence as well as that of Mr Cook. It would not, therefore, be ‘equitable’ (within the terms of s.33 (1)) to confer on the plaintiff a windfall advantage from the incompetence of her own first solicitors by allowing the survival of a claim against the Authority in respect of Dr Robinson’s negligence which would have fallen at the Walkley fence if they had acted competently."

I turn briefly to the McEvoy line of authority. This establishes that where a first writ issued within the primary limitation period is itself ineffective (although not a nullity) through having been issued variously without consent against a company in liquidation (as in McEvoy itself), or through being issued against an unincorporated association in its own name ( White v Glass , Court of Appeal transcript 17th February 1989), or through being issued against a company which had been struck off the register ( In re Workvale Limited [1992] 1 WLR 416), the Walkley principle does not apply to defeat in limine a second action, notwithstanding that in each of those cases the defect was recognised to be curable: in McEvoy by the late grant of leave; in White v Glass by substituting the names of representative members; and In Re Workvale by having the company restored to the register.

The general tendency of these cases, I have no doubt, is to support the plaintiff’s argument. In the first place they suggest a marked unwillingness on the Court’s part to apply Walkley unless it is plainly indistinguishable. Secondly, they appear to suggest that if the second action is brought against a different party then it is not caught by the Walkley principle. That was clearly the position in White v Glass (although Kerr LJ in the Court of Appeal does not appear to have distinguished Walkley on that precise basis); it was clearly not the position in In re Workvale ; in McEvoy itself the facts were somewhat complicated, the defendants to the second action having earlier been joined to the first action but then successfully applied to set the joinder aside. It is, however, worth noting that Evans LJ in McEvoy described the circumstances in which Walkley bars a plaintiff from seeking an extension of time under s.33 as:

Should then the Walkley principle be extended to the limited degree necessary to encompass the present action? In submitting that it should, Mr James naturally emphasises the narrowness of the distinction between this action and the earlier one brought against the Company, the sole difference between the two being, of course, that of the actual defendant. The tort, he points out, is in both cases identical. Both tortfeasors are covered under the same policy of insurance. And there was never in fact any issue as to whether the Company was vicariously liable.

Ably though the argument was advanced, I have no doubt that it must be rejected. By the same token that the Walkley principle itself rests upon a narrow and somewhat technical construction of s.33, so too it is in my judgment possible to escape it on just such grounds. That, moreover, is particularly appropriate given the undoubted anomalies that in any event arise from the application of the principle - most notably, as already pointed out, its failure to impact on cases of perhaps greater negligence where no writ was ever issued in the first place. I would accordingly rule that the s.33 discretion arises in all cases save those which fall four-square within the Walkley principle.

How then should that discretion be exercised here? This to my mind is a more difficult question. The indication given by the Judge below that upon this issue he was favourably inclined towards to the plaintiff is of little help to the plaintiff. Not only had the Judge not heard the defendant on the point, but, no less importantly, his view plainly gave no weight whatever to the Walkley factor. That factor, submits Mr James, clearly remains significant even if not decisive. The position is, he submits, substantially the same as described by Waite LJ in Whitfield:

Even if it be wrong to characterise this plaintiff’s solicitor’s initial decision to sue only the Company as a “failure” on their part, it is certainly no less fortuitous here than in Whitfield that a further opportunity to sue now arises. Given first, the general policy consideration that a plaintiff should ordinarily bring all relevant claims at one and the same time to avoid a multiplicity of proceedings, and second, the strictness with which the courts invariably view any application to extend the validity of a writ - see particularly Kleinwort Benson v Barbrak Limited [1987] AC 597 - it would be wrong in principle to allow this plaintiff by a second action now to obtain by the back door what plainly she could no longer obtain through the front door. It is a powerful argument.

Mr Stanton’s contrary argument - also most skilfully developed - acknowledges the relevance of the now defunct first action to the exercise of the Court’s s.33 discretion in respect of the second action. It is, he submits, relevant in three ways: first, because it may well explain the reason for the delay in issuing the second action - one of the circumstances to which the court is required to have regard by s.33(3)(a); second, because it is a factor which the court will wish to take into account as in Whitfield; and third, because it may well have a bearing on the existence of an alternative claim by the plaintiff against her solicitors in negligence, itself a relevant factor - see Thompson v Brown . As to this third consideration, Mr Stanton rightly recognises that, were this appeal to fail, the plaintiff’s solicitors here could have no answer to such a claim.

All this notwithstanding, Mr Stanton argues that we should exercise our s.33 discretion in favour of the plaintiff so as to allow her second action to proceed. This was, he points out, an early notification case (as to which see Lord Griffith’s speech in Donovan v Gwentoys [1991] 1 WLR 472), and realistically the subsequent delay has occasioned the defendant no prejudice whatever (apart only from being denied the benefit of a Limitation Act defence, the inevitable corollary of exercising the s.33 discretion in any case). The plaintiff has a strong - indeed thus far undisputed - claim against the defendant and, as Lord Diplock observed in Thompson v Brown at p.750:

I have come to the conclusion that the plaintiff’s argument should prevail. This case seems to me in important respects different from Whitfield and to call for a different result. First and foremost it seems plain that the passage of time caused here by the abortive first proceedings occasioned this defendant no real prejudice whatever. I put aside - as Kelly v Bastible, The Times Law Reports, 15 November 1996, and basic principle requires that we should, Parker LJ’s comment in Hartley v Birmingham City Council [1992] 1 WLR 968 at 980 notwithstanding - the mere fact that the defendant here is insured. The fact, however, that both she and the Company were covered under the same policy of insurance and that those insurers have already investigated this claim and made an interim payment in respect of it is of some relevance. The defendant in the result is no less able to respond effectively to the claim now than had she been named on the writ during the primary limitation period. That was not the position in Whitfield. Secondly, whilst it was undoubtedly right in Whitfield to criticise the plaintiffs’ solicitors for not having sued at the outset in reliance upon Dr Robinson’s alleged negligence as well as that of Mr Cook, I do not think that any such criticism can properly be levelled here for the initial decision to sue only the Company. The Company were, after all, the party named as the insured in the Provincial Insurance Company’s correspondence and, when the summons was issued, there was no reason to doubt that a claim directed solely against the Company was sufficient for the plaintiff’s purpose. No question arises here as to abuse of process or the principle in Henderson v Henderson (1843) 3 Hare 100.

I entirely agree with the judgments of Simon Brown and Clarke LJJ, which I have seen in draft, save for the way in which they would exercise their discretion. I accept that because the plaintiff fortuitously did not sue the driver in the first action, this second action does not strictly fall foul of the Walkley principle. As appears from the judgment of Simon Brown LJ, the Walkley principle provides as a matter of statutory construction that a plaintiff is not prejudiced by the application of the limitation period raised in a second action, where the plaintiff has brought a first action and has had that first action struck out through the negligence of his or her legal advisers, but only where the two actions are between the same parties.

It would seem to me that albeit it has not been contended that the second action is an abuse of process within Henderson v Henderson , the court should, in exercising its discretion, take note of the fact that parties to litigation should, if it is practicable to do so, bring all their claims in one proceedings, including joining all relevant parties. The court should further take notice of the fact that no encouragement should be given to those who delay in commencing proceedings, or, where they have delayed in commencing proceedings, do not prosecute the same with due diligence. To hold that it is equitable to allow the second action to proceed in a case such as this, would seem to me to encourage plaintiffs or their advisers not to join all the relevant parties in the first action, and will not visit the sins of the delay in prosecution where they should be visited. Furthermore, any plaintiff, or possibly any plaintiff’s legal adviser who has been informed that a second action has fallen within the Walkley principle and cannot be proceeded with, will not feel that justice or equity is even-handed where the fortuity of not joining the driver in the first action is said to make all the difference.

I have reached the conclusion that this appeal should be allowed for the reasons given by Simon Brown LJ. I only wish to add a few short comments of my own, principally on the question whether the Walkley principle should be extended as suggested by Mr James. That depends in part upon ascertaining what the principle established by Walkley is. The question whether the court has jurisdiction to disapply what is now section 11(1) of the Limitation Act 1980 depends upon the true construction of section 33(1) of the Act, which provides:

It is common ground that in this case the period applicable is three years from the date on which the cause of action accrued. That is the primary limitation period. The reason why in any such case the provisions of section 11 “prejudice the plaintiff” within the meaning of section 33(1) is that the action, that is the second action, is brought after the three year period, with the result that in that action the defendant can plead section 11 by way of defence and the action will fail.

That is the reason why this action would fail if section 11 were not disapplied under section 33. I would myself have thought that the same could have been said on the facts of Walkley, since there too the reason why the second action would have failed was the expiry of the three year period and thus the application of section 11(3). I am not sure whether it was argued in Walkley or in any of the later cases that on the true construction of section 33(1) the action there referred to must be the second action and not the first, as in my opinion must be the case. However that may be, as my Lord has pointed out, the House of Lords has decided that the passage which he has quoted from the speech of Lord Wilberforce is to be taken as stating the relevant principle.

The principle is that stated by Evans LJ in McEvoy in the passage also quoted by my Lord, namely that where a plaintiff, who has previously commenced proceedings against the same defendant in respect of the same accident within the primary limitation period and who has then either failed to prosecute them or discontinued them, brings a new action outside the primary limitation period, he is not prejudiced by the provisions of section 11(3) because the only cause of prejudice to him is (as Lord Wilberforce put it at page 609) “his own inaction and not the .. the operation of the Act” and (as Lord Diplock put it at page 619) dilatoriness after the action was started.

Mr James submits that the same principle should be applied here because it can be said that the sole cause of the prejudice suffered by the plaintiff was her own failure to issue and serve proceedings against the new defendant, the driver of the car. Given the approach of the House of Lords that submission seems to me to have some logical force, but the difficulty with it is this. In all cases in which the plaintiff issues proceedings out of time it can be said that the true cause of the prejudice to him is inaction, either on his part or on the part of his legal advisers. Yet the whole purpose of section 33 is to enable the court to disapply section 11 in those circumstances. It follows that the mere failure to sue the driver before the expiry of the three years does not mean that the plaintiff will not be prejudiced by the application of section 11. In these circumstances, it does not seem to me to be sensible to hold that it was the plaintiff’s failure to issue and serve the proceedings in time which prejudiced the plaintiff and not section 11, especially when section 11 is concerned with the period after the second action is brought.

It may seem anomalous that a defendant should be better off where, unknown to him, a writ has been issued but not served than he would be if the writ had not been issued at all; but this is a consequence of the greater anomaly too well-established for this House to abolish that, for the purposes of a limitation period, an action is brought when a writ or other originating process is issued ... and not when it is brought to the knowledge of the defendant by service upon him.

It appears to me that another reason for the anomaly is the view of causation taken by the House in Walkley, but whatever the reason for it, the anomaly should not be extended except for very good reason. I agree with my Lord that there are a number of reasons (which he has set out) for not extending it to a second action brought against a different defendant. There is no need to do so in order to ensure that justice is done between the parties because that can be achieved by the application of section 33(1), which gives the court power to disapply section 11 if it is equitable to do so, and the court is enjoined by section 33(3) to have regard to all the circumstances of the case.

In my opinion, on the facts of this case, if section 11 is not disapplied the plaintiff will be prejudiced by it because the action is bound to fail. It follows that the court has power to allow the action to proceed if it is equitable to do so. The remaining question is whether it is equitable to allow the plaintiff’s action to proceed, having regard on the one hand to that prejudice to the plaintiff and on the other hand to the prejudice to the defendant. That question must be therefore judged having regard to all the circumstances of the case. If the plaintiff is not allowed to proceed with this action she will have to begin new proceedings against her solicitors instead of continuing with this action against the defendant. On the other hand if she is allowed to continue with this action the defendant will be prejudiced by not being able to rely upon the three year limitation period.

It is perhaps fortuitous that the plaintiff is able to ask the court to exercise a discretion under section 33, which she would not have been able to do if she had begun an action against the defendant in the first place and served it one day out of time, as happened in the case of the defendant in the first action. However, if the plaintiff is permitted to proceed with this action, I agree with Lord Justice Simon Brown that the defendant will not suffer any prejudice other than being deprived of her limitation defence. The plaintiff’s claim had been investigated by her insurers, who as I understand it insured both her and her employers, at any rate when she was driving in the course of her employment. They presumably concluded that she was responsible for the accident because they made an interim payment at an early stage. There is no suggestion that the defendant or her insurers wish to advance any other case. The true position is that the insurers have the conduct of her defence just as they had the conduct of her employers’ defence. In the latter capacity, they were aware that proceedings had been issued and, although they did not accept service of the proceedings on the employers’ behalf, there is convincing evidence that they agreed an extension of time for the service of a defence revocable on 21 days’ notice. They were thus content that, for some purposes at least, the matter should be left in abeyance, no doubt for the purposes of further negotiations on quantum. If this action is allowed to proceed, I feel sure that just such negotiations will take place because, in the absence of settlement, the only realistic question for determination in the action will be the quantum of the plaintiff’s damages, for which the defendant was primarily liable. There is no suggestion that a fair trial on quantum could not now take place.

Having read the judgment of Waller LJ in draft, I recognise the force of the arguments in favour of refusing to disapply section 11, but (unlike the discretion to extend time for service) the discretion is entirely at large and its exercise depends upon a balance of all the circumstances of the case, including those identified in section 33(3) of the Act. Having tried to conduct that balance I agree with Simon Brown LJ that having regard to all the circumstances of the case it would be equitable to disapply section 11 and to allow the action to proceed.

I would only add this in the light of a particular concern expressed by Waller LJ. I entirely agree that neither plaintiffs nor their solicitors should be encouraged not to join relevant parties in the hope that the court will assist them under section 33 if they should fail to comply with the rules. If there were any suggestion that that had occurred in any case, that would be a powerful factor in favour of refusing to disapply section 11 or its equivalent. There is, however, no suggestion that anything like that occurred here.

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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Shapland v Palmer [1999] EWCA Civ 1061 (23 March 1999) URL: http://www.bailii.org/ew/cases/EWCA/Civ/1999/1061.html Cite as: [1999] EWCA Civ 1061, [1999] PIQR P249, [1999] 1 WLR 2068, [1999] WLR 2068

England and Wales Court of Appeal (Civil Division) Decisions