Delay – Discretion – Limitation periods – Road traffic accidents

McDonnell and anor v David Walker (executor of the estate of Richard Walker, deceased): CA (Civ Div) (Lords Justice Waller (vice-president), Rimer, Sir Paul Kennedy): 24 November 2009

The appellant executor (W) appealed against a decision granting the application of the respondents (M) to disapply the provisions, section 11 under section 33, of the Limitation Act 1980.

M were the driver and a passenger in a car involved in a road traffic accident. The driver of the other car was killed in the accident. M issued proceedings against his estate, represented by W, claiming damages for personal injury. Liability was not disputed by the deceased’s insurers. M’s proceedings were served one day late. The insurers took the late service point and an application for an extension of time was refused. At that time the law was that the court could not exercise its power under section 33 of the Limitation Act 1980 to disapply the ordinary three-year time limit in a personal injury action where the claimant had brought an action within the time limit and was bringing a second action in which the section 33 application was made. M went to new solicitors who initially pursued a claim against M’s previous solicitors. The law then changed and it became possible for a court to exercise its discretion under section 33, even though an action had previously been brought within the limitation period. Some 22 months later M commenced a second action against the deceased’s estate and successfully applied under section 33 to disapply the limitation period. The claims in the second proceedings were different from and much larger than the claims in the first proceedings, including substantial claims for loss of future earnings and psychological injury. W contended that the judge had misunderstood important aspects of the evidence, misdirected himself in various ways, including in respect of the test to be applied, failed to identify the correct period of delay, and reached a decision in the exercise of his discretion which was not open to him.

Held: (1) The judge had failed to identify the correct period of delay. The ‘delay’ in sections 33(3)(a) and 33(3)(b) was the delay since expiry of the limitation period, but the overall delay was also relevant as part of all the circumstances of the case. The judge concentrated on the period after the House of Lords decision in Horton v Sadler [2006] UKHL 27, [2007] 1 AC 307 made it possible to exercise the discretion under section 33 in a second action, even though a claimant had brought an abortive action before the expiry of the limitation period, Horton considered. That wrongly suggested that, provided there was no delay post-Horton, a claimant should be able to succeed in a disapplication of the limitation period in any second action. However, Horton was a case where there was no forensic prejudice to the defendant. Cain v Francis [2008] EWCA Civ 1451, [2009] 3 WLR 551 similarly supported the disapplication in a second action where there was no forensic prejudice, Cain considered. But if there was forensic prejudice, then where that prejudice was caused by inexcusable delay and where there was little if any prejudice to a claimant with an action against his solicitors, the position would be different. The judge’s approach to forensic prejudice was also flawed. He suggested that there was correspondence during the period of three years from the accident and that it was for W’s insurers to investigate, but until the insurers had details of the claim being made they were in no position to do so. Reports relevant to general damages were only received three years after the accident, no psychological report was received at that time and no claim for loss of earnings, present or future, was received at all. The claim ultimately received some seven years after the accident was of a different magnitude. Clearly, forensic prejudice had been suffered by W’s insurers who had to investigate the second claim from a standing start. Since the judge had misdirected himself in various respects, the court had to consider whether it was appropriate to disapply the limitation period under section 33.

(2) If delay had caused forensic prejudice to the defendant, then the court had to consider the cause of the delay: if the delay was excusable and on balance it was still possible to have a fair trial, then it might be just and fair to allow the action to proceed; on the other hand, if the delay had caused unfairness to the defendant in his ability to investigate the claim and there was no excuse for the delay, the action should not be allowed to proceed. In this case the only period of delay for which there was any kind of excuse was that between the failure of the first action and the decision in Horton. Thus, W had been forensically disadvantaged by a substantial period of inexcusable delay. M would suffer only minor prejudice if they had to proceed against the solicitors who made the error over service of the first proceedings and some of that prejudice was their own fault. In all the circumstances it was not right to disapply the limitation period under section 33.

Appeal allowed.

Frank Burton QC, Paul Russell (instructed by Cogent) for the ­appellant; Simon Hilton (instructed by Pannone) for the respondents.