In a decision that will be welcomed by insurers and their legal representatives, the Court of Appeal has ruled in the case of MH Site Maintenance Services Limited & Anor v James Watson [2025] EWCA Civ 775 that the courts do have the power to order parties to get on with claims in the Portal.
Background
The claimant, Mr Watson, brought a claim in relation to a road traffic accident, commencing the pre-action protocol (PAP) process by submitting a claim notification form dated 17 July 2020. Liability was admitted by the second defendant on 30 July 2020, thereby completing Stage 1 of the PAP process.
The claim did not progress through Stage 2, as the claimant never provided the settlement pack as required, and effectively stayed in limbo.
The issue of proceedings
Although the case had not progressed through Stage 2, the claimant issued a claim under Part 8 of the Civil Procedure Rules, a step permitted by Practice Direction 49F, on 6 September 2022 (10 days before the limitation period expired) in order to prevent a limitation defence accruing.
On 13 September 2022, Deputy District Judge Openshaw stayed the Part 8 claim (for a year) effective until 16 September 2023 on terms that, unless the claimant applied by letter to lift the stay and proceed to a Stage 3 hearing, or transfer the matter to Part 7 by the stipulated deadline, the claim would be struck out. The order, which was made ex parte, also gave the defendants liberty to apply within seven days of the service of the order to vary or set it aside.
The defendants' application
Three months before the stay was due to expire, the defendants sought an order that:
- The stay be lifted; and
- Unless the Stage 2 Settlement Pack was provided within 21 days, the Part 8 claim would be struck out.
The matter was heard by District Judge Baldwin who concluded that he had no power to make any order relating to the provision of the Stage 2 settlement pack. Having come to this conclusion, the District Judge expressed the opinion that if the stay was lifted the case would then have to be transferred to CPR Part 7, which was not what the defendants wanted.
The first appeal
The defendants' appeal against the decision of District Judge Baldwin was heard by His Honour Judge Wood KC who, while expressing a degree of sympathy for the defendants, dismissed their appeal holding that, while the court should use such powers as do exist to compel parties to progress claims and not to be dilatory, it did not have the power to make an order in relation to the PAP process and, therefore, could not make the order that the defendants had sought in relation to the Stage 2 settlement pack.
The Court of Appeal
Having been granted permission to proceed with a second appeal, the matter came before the Court of Appeal which defined the issue it had to determine in the following terms:
"The central issue in this appeal is whether or not the court has jurisdiction to make directions in connection with a claim within the pre-action protocol for low value RTA claims (“the PAP”), where the claimant has also commenced proceedings under CPR Part 8 to protect that claim against a limitation defence."
Having determined that the appeal was not academic as a result of subsequent developments in the claim and that, in the words of Lord Justice Coulson who delivered the lead judgment, "even if the appeal is academic, I consider that it would be contrary to the overriding objective for this court, at the last minute, to duck out of deciding the substantive issue because of a late argument that the appeal was academic," the court went on to determine the issue.
In allowing the appeal, Lord Justice Coulson (with whom Lady Justice Andrews and Lord Justice Holgate agreed) said:
"For all those reasons, therefore, I consider that, in the circumstances of this case, DJ Baldwin and Judge Wood were wrong to draw a distinction between the PAP process and the Part 8 proceedings. In my view, once Part 8 proceedings are up and running, the court has all the powers identified in r.3.1(2); it has an express power under the Practice Direction cited at paragraph 26 above to order compliance with the PAP; and is obliged to take such matters into account in any event when granting or reconsidering a stay, or making the stay conditional."
Recognising the problems often faced by defendants resulting from renewed or indefinite stays granted while claimants fail to progress claims, Lady Justice Andrews said:
"In the course of the hearing we were told that in practice stays granted under paragraph 16.2 of PD 49F are often renewed as a matter of course, sometimes more than once, and that some district judges even grant indefinite stays. They should not be doing this. The effect, in practical terms, is to afford a dilatory claimant a longer time to bring proceedings in court than the Limitation Act permits. There is no reason why claimants with low value claims should be granted that indulgence when those who have suffered more serious injuries would not be. Whilst, like Lord Justice Coulson, I have no desire to increase the workload of busy district judges, lengthy periods of inactivity by claimants are contrary to the rationale of the PAP and should be discouraged. The renewal of the stay should never be treated as a rubber-stamping exercise and an indefinite stay would rarely, if ever, be justified."
What does this mean for defendants and insurers
The failure of claimants to progress claims through the Portal, while protecting their claims from a limitation defence by issuing proceedings which are stayed for extended periods by courts seemingly powerless to force the claimant to get on with the claim, is a problem which has arisen far too frequently.
The decision of the Court of Appeal brings this impotency to an end and puts the issue beyond doubt: the courts do have the power to make orders requiring claimants to progress the PAP process. Where claimants are failing to do so, there is no longer any doubt that defendants have the firepower and the courts the authority to require them to take action.
Any clients wishing to discuss the practical implications of this decision are invited to get in touch with their usual DACB contact or a member of our Motor Injury or Casualty Injury teams.
