Mark Keilaus & Anor v Nicola Houghton & Anor
[2024] EWHC 2108 (Ch)
Katherine Playfair & Ors v Pannells LLP (formerly PKF (UK) LLP) & Ors
30 July 2024
[2024] EWHC 1933 (Ch)
High Court
A family sued their former accountants and lawyers for bad advice that cost them money. They missed the deadline to officially serve the lawsuit, and the judge refused to extend the deadline because they hadn't tried hard enough to meet it. They should have sought an agreement to extend the time or taken other steps to protect their case sooner.
Key Facts
- •Claimants are beneficiaries and trustees of family trusts, alleging negligence against defendant advisors (accountants and solicitors) regarding a 2008 trust restructuring.
- •Claim issued on 16 June 2023, application to extend service time made on 13 October 2023.
- •Claimants allege negligent advice led to ineffective deeds and unforeseen tax liabilities (CGT and IHT).
- •Claimants contend they became aware of the negligence only after October 2021, relying on section 14A of the Limitation Act 1980.
- •Change of solicitors due to conflict of interest delayed the process.
- •Defendants argue the claim is time-barred.
- •Claimants' inability to serve the claim form within the specified time is attributed to the complexity of the claim, the difficulty in identifying the correct defendants and the limitation issue.
Legal Principles
The court's discretion to extend time for service under CPR 7.6(2) must be exercised in accordance with the overriding objective and considers the reason for the inability to serve within time.
ST v BAI (SA) [2022] EWCA Civ 1037, Collier v Williams [2006] EWCA Civ 20, Hashtroodi, Hoddinott, FG Hawkes, Al-Zahra, Qatar Investment
Service of the claim form, not particulars of claim, engages the court's jurisdiction and should not be delayed.
Phoenix Healthcare Distribution Ltd v Woodward [2018] EWHC 2152 (Ch)
A defendant has a right to be sued within the statutory limitation period. Departure needs justification; incompetence or oversight may not be a good reason.
ST v BAI (SA) [2022] EWCA Civ 1037
If the limitation period has expired, the claimant must show reasonable steps were taken to serve within time. This includes considering whether the inability to serve was due to difficulties in the mechanics of service or in preparing the documentation.
ST v BAI (SA) [2022] EWCA Civ 1037
Steele v Mooney [2005] 1 WLR 2819 does not establish a general principle that uncertainty about a claim justifies delaying service; each case is fact-specific.
Cecil v Bayat [2011] 1 WLR 3086, ST v BAI (SA) [2022] EWCA Civ 1037
Claimants have various options to protect their position when limitation is approaching, including standstill agreements, stays of proceedings, or extensions of time for particulars of claim.
Pre-Action Protocol for Professional Negligence claims, Phoenix Healthcare Distribution Ltd, Hoddinott
Outcomes
Application to extend time for service of the claim form dismissed.
Claimants failed to take reasonable steps to serve the claim form within its period of validity. The reasons provided for the delay, while acknowledged, were not considered 'good reasons' in light of established case law. The claimants had various alternative options available to protect their claim but failed to utilize them.
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