Procedural omissions for service out of the jurisdiction will not impact issuance of a claim for the purposes of limitation.

In Chelfat v. Hutchinson 3G UK Limited [2022] EWCA Civ 455, the UK Court of Appeal recently determined the effect of a procedural failure in relation to service of a claim outside of the jurisdiction without permission, including whether such failure entitled the court to refuse to issue a claim form, and the consequences for potential limitation defences.

Service out of the jurisdiction without permission is increasingly prevalent in practice following amendments to the Civil Procedure Rules (CPR) post-Brexit on 6 April 2021 to allow such service when the underlying contract has an English jurisdiction clause. If the court’s permission is not required for service out of the jurisdiction, as set out under CPR 6.32 (Northern Ireland or Scotland) and 6.33 (outside of the UK), CPR 6.34(1) provides that a party must file and serve with the claim form a notice containing a statement of the grounds on which the claimant is entitled to serve the claim form out of the jurisdiction. Practice Direction 6, paragraph 2.1 provides that the notice should be on Practice Form N510 (Form N510). CPR 6.34(2) sets out that unless the claimant has filed the claim form with a copy of Form N510, the claim form cannot be served without permission from the court.

The decision in Chelfat clarifies that failure to comply with the procedural requirements for service out of the jurisdiction should not prevent the claim form from being issued. As a result, failure to file Form N510 will not displace the general rule that time ceases to run for the purposes of a limitation period upon the issue of the claim form.

Facts

In December 2009, Zehour Chelfat (Appellant) purchased two dongles from Hutchinson 3G UK Limited (Respondent). The Appellant claimed that her laptop suffered irreparable damage caused by the dongles. The Appellant tried to bring a claim in the County Court Money Claim Centre (CCMCC) in December 2015 in contract and tort, shortly before the expiry of the respective limitation periods. However, the CCMCC declined to issue the claim form on the basis that the Respondent’s address for service was in Scotland and the Appellant had not completed Form N510.

The Appellant tried to issue proceedings again in December 2016, using an address for the Respondent in Maidenhead. By this time, the limitation periods had expired, and the Respondent succeeded in striking out the claim on the basis that it was time-barred. The Appellant was unsuccessful on her first appeal, but obtained permission for a second appeal to the Court of Appeal (Court).

Judgment

The Court considered whether the CCMCC had erred in refusing to issue the Appellant’s claim form in December 2015. The Court found that, as the sanction in CPR 6.34 for failure to file Form N510 does not concern the issue of the claim form, and there was no authority to support the proposition that failure to file Form N510 would prevent a claim from proceeding, the CCMCC was not permitted to refuse to issue the Appellant’s claim form.

The Court then considered whether it was arguable that the action was brought in December 2015, prior to the expiry of the relevant limitation periods, notwithstanding that the first claim form was never issued. The Court referred to Practice Direction 7A, paragraph 5.1, which provides that:

“where the claim form as issued was received in the court office on a date earlier than the date on which it was issued by the court, the claim is ‘brought’ for the purposes of the Limitation Act 1980 and any other relevant statute on that earlier date.”

On the basis that the content of the claim form received by the CCMCC in December 2015 was substantively similar to that of the claim form issued in December 2016, the Court determined that both concerned the same claim. The only change made was the address for service, and this had no bearing on the claim itself.

The claim was therefore held to have been “brought” in December 2015, within the relevant limitation periods, and the matter was remitted to the County Court.

Conclusions

This decision clarifies that procedural requirements relating to service can only impact service of the claim form and not its issue.

Form N510 is a requirement under the CPR, with the helpful function of informing the receiving party of the jurisdictional basis for the claim. CPR 6.34 sets out a clear sanction for failure to file Form N510, namely that the claim form cannot be served on the defendant. While this is rectifiable either by filing Form N510 or seeking retrospective permission from the court, the additional delay may place a claimant outside of the time period for service of the issued claim form and require the claimant to seek relief from sanction at a very early stage of the proceedings, leading to costly satellite litigation.

Several recent decisions from the Court concerning Form N510 show that claimants frequently forget to file this form. The authorities show that although failure to file Form N510 is a “non-trivial breach”, the Court will strongly consider providing relief from sanctions to give retrospective permission to serve the claim form without filing Form N510.

Claimants seeking to issue a claim out of the jurisdiction without permission should therefore be conscious of the requirements imposed by CPR 6.34. Failure to file Form N510, while potentially not fatal to the claim, could lead to costly procedural disputes to rectify the error.

Defendants should note that procedural failings on service will not be an effective basis for a limitation defence, as the court will focus on whether the claimant has done all that it reasonably could to bring the matter before the court at the appropriate time, and omission of Form N510 is not a proper basis for a court to refuse to issue a claim form. The better approach for a defendant may be to challenge the claim on the basis that there has not been proper service, leading to additional cost and delay, which could take a claimant outside the time limit for service after issue of the claim form.

This post was prepared with the assistance of Kate Burrell in the London office of Latham & Watkins.