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1

What are interim injunctions?

Prohibitory?

Mandatory?

Quia timet?


• They are interim orders
• Designed to preserve the position pending trial
• Having a coercive effect, as the respondent will be in contempt of court if in breach
• Prohibitory injunctions: restrain the respondent from conduct which must be defined in the order eg. that D be forbidden [ie prohibitory] from publishing particular photographs [the defined conduct]
• Mandatory injunctions: require the respondent to do defined actions eg. that D must [ie mandatory] demolish a wall D constructed on C's land as marked in red on an attached plan [the defined conduct]
• Quia timet injunctions: are used where the respondent is threatening to do some civil wrong in the future

2

Background Requirements for Interim Injunctions


An applicant needs to establish that:
(a) The court has jurisdiction
(b) C must have a cause of action
(c) “Just and convenient” to grant the injunction SCA 1981, s. 37(1)

3

In all cases the claimant must have a cause of action
Injunctions are only remedies

Must identify a tort, such as trespass or defamation, or some other cause of action (such as breach of contract) committed (or threatened) by D

4

Usually there must be a named Defendant
Bloomsbury Publishing Group Ltd v News Group Newspapers Ltd [2003] 1 WLR 1633

The court allowed an injunction against a “person unknown” where it was possible to serve on other, named, defendants who would bring the injunction to the attention of the unknown defendant.

South Cambridgeshire DC v Persons Unknown LTL 17/9/2004
CA approved Bloomsbury Publishing

5

QUESTION 1
Your client is the internationally well-known Harrogate Hotel in the West End of London. Located in the hotel is a long-established casino, unsurprisingly called the Harrogate Casino. Your client is concerned about a web site, www.harrogatecasino.com.uk, which is not run by your client. Inquiries have established that the web site is owned by Off-Line Casinos Ltd. Your client is concerned that the web site will have an adverse effect on its business.
What advice should you give on how to protect your client’s commercial interests?

Procedure
APA Civil para 42.19 to 42.24
High Court or County Court?
 High Court must be used for search orders (with some minor exceptions), and libel claims
 Otherwise, unless a substantive claim has already been issued, the applicant can choose between the High Court and County Court
 Here use the Ch D as it is an important case and involves intellectual property. Might want to consider a specialist court, eg the IPEC

6

Q1 Procedural requirements

Procedural requirements
• Issue claim form
• Apply using N244 or N16A, a special interim injunction application notice (DRF Manual p 237-8, provides an example of the wording needed for insertion in form N244)
• Draft Order should be attached (using PF 39CH (pre-action) or PF 40CH (after proceedings are issued, which are set out in “CIVIL LGS07B Injunction Orders”). See also DRF Manual pp 232-235
• Written evidence in support (DRF Manual ch 20)
• Service must be effected 3 clear days notice to the respondent, unless there are grounds for applying without notice
• Usually need a skeleton argument (DRF Manual ch 23)
• Statement of costs 24 hours before the hearing, form N260
• Traditionally heard by a full Judge. PD 2B (2015) paras 3.1 and 8.1 allow Masters and District Judges to hear interim injunction applications (other than freezing injunctions and search orders)

7

Timing
CPR, r. 25.2(1): An order for an interim remedy may be made at any time, including-

(a) before proceedings are started; and
(b) after judgment has been given.
CPR, r. 25.2(2)(a): However, r. 25.2(1) is subject to any rule, PD or other enactment providing otherwise.
CPR, r. 25.2(2)(b): A pre-action application can only be made if:
(i) the matter is urgent; or
(ii) it is otherwise necessary to do so in the interests of justice.
CPR, r. 25.2(c): A defendant cannot apply before acknowledging service, unless the court otherwise orders.

8

PD23 A

, para 2(7): Every application should be made as soon as it becomes apparent that it is necessary or desirable to make it.

9

Without notice applications
See PD 25A paras 4.1 to 4.5.

These are permitted if urgent etc. Applicant has the duty of full and frank disclosure.
An application can be made even by telephone (para 4.5).
Unless the application is secret, the applicant has a duty to give informal advance notice to the respondent (para 4.3(3)).
Applicant may have to give additional undertakings (para 4.4):
• Undertaking to issue and serve claim form
• Undertaking to file signed evidence
• Undertaking to apply for a hearing on notice (to renew the injunction)


10

American Cyanamid Principles
A court dealing with the case in Question 1, as is usual with interim prohibitory injunctions, will apply the American Cyanamid principles:

1. Serious question on merits
2. Damages inadequate for Claimant
3. Claimant’s undertaking in damages being good protection
4. Balance of convenience
5. Preserve Status Quo
6. Any special factors
7. Last resort: merits

APA Civil paras 42.32 to 42.54
The main point is that the courts do not want detailed consideration of the merits on interim applications.


11

Serious Q to be tried


Mothercare?

1. Serious question to be tried APA Civil para 42.34
What are the causes of action in Question 1?
 Passing off
 Possibly infringement of trade marks

Mothercare Ltd v Robson Books Ltd [1979] FSR 466
All that is required is that the claim has substance and reality. It does not matter whether C’s prospects of success are 20% or 90%.

12

2. Damages an adequate remedy APA Civil para 42.39
Damages will not be a sufficient remedy for the claimant where, for example

 Defendant is unable to pay damages
 Wrong irreparable
 Non-pecuniary loss
 Damages difficult to assess

If damages are an adequate remedy, C will not be awarded an equitable remedy such as an injunction (whether final or interim).

On the other hand, the courts do not like the idea of a defendant in effect buying the right to commit a tort.

13

3. Protection of undertaking in damages APA Civil para 42.41
Morning Star v Express Newspapers [1979] FSR 113

In this case the Claimant’s accounts showed it had been in apparent financial difficulty for some time. The proposed injunction would have prevented publication of the Defendant’s newspaper, The Daily Star, so the possible liability on the undertaking was extremely great.

What does “there would be no reason … to refuse” the injunction mean (Lord Diplock in American Cyanamid at p 408E)?

14

National Commercial Bank Jamaica Ltd v Olint Corporation Ltd [2009] 1 WLR 1405, Lord Hoffmann at [16]
Possible pyramid or Ponzi fraud case by customer. Bank did not want to be associated with such a customer. Wrote saying the bank account would be closed. Customer applied for an interim injunction to keep the account.

If there is a serious issue to be tried, and the claimant could be prejudiced by the acts or omissions of the defendant pending trial, and the claimant’s undertaking in damages would provide the defendant with an adequate remedy if it transpires that his freedom of action should not have been restrained, an interim injunction should ordinarily be granted.

15

4. Balance of convenience APA Civil para 42.45
This is sometimes referred to as the balance of the risk of doing an injustice (depending on whether the interim injunction is or is not granted).
Factors brought into the balance include:

 Effects of Defendant’s conduct. Damage to the Claimant’s business reputation; need to protect the Claimant’s intellectual property rights; need to prevent the Defendant misleading the public; making profits using the Claimant’s hard earned goodwill
 Utility of Defendant’s activities
 Effects on non-parties, such as employees, customers, neighbours
 Restrictions imposed by proposed order: whether unduly harsh

16

National Commercial Bank Jamaica Ltd v Olint Corporation Ltd [2009] 1 WLR 1405, Lord Hoffmann at [17]–[18]
This is often an exercise in seeking to determine whether granting or refusing the injunction will cause irremediable prejudice, and to what extent. Among the matters the court may take into account are:

National Commercial Bank Jamaica Ltd v Olint Corporation Ltd [2009] 1 WLR 1405, Lord Hoffmann at [17]–[18]
This is often an exercise in seeking to determine whether granting or refusing the injunction will cause irremediable prejudice, and to what extent. Among the matters the court may take into account are:

17

5. Status quo
Best explanation of this factor is in APA Civil, para 42.50
Garden Cottage Foods v Milk Marketing Board [1984] AC 130
Lord Diplock: the relevant status quo is the state of affairs:

• in the period immediately before the claim form is issued, or
• if there has been unreasonable delay in applying for the injunction after the claim form was issued, in the period immediately before the interim application was issued
Minimal periods between D starting the conduct complained of and C issuing the claim form are ignored:
Play IT Ltd v Digital Bridges Ltd [2005] EWHC 1001 (Ch)

18

6. Special factors APA Civil para 42.51

These turn on the individual facts of particular cases. Such as doctors getting used to using the suture produced by D in American Cyanamid,

19

7. Merits APA Civil para 42.52

This factor only rarely arises, as a last resort. And only if there is no credible dispute.

20

Advocacy
1. You need to know the American Cyanamid principles and must apply them to the facts of your case
2. You may have to cite American Cyanamid in your skeleton argument. However, do not cite or refer to the report in American Cyanamid in your oral submissions. Unless your case is of a technical nature (or comes into one of the exceptions, below), it is rare to need to cite any authorities

3. In Civ ADV classes, after introducing self, opponent and the application, check in passing that the judge has the application notice, draft order and written evidence (usually listed in the skeleton argument)
4. It is usually necessary to make reference to the terms of the orders sought in the draft order
5. You will have to address the elements of the principles. Use your skeleton argument as a point of reference. You need to satisfy the judge on each principle
6. Most applications hinge on one or two of the elements (often the balance of convenience). This means that hopefully several of the principles can be dealt with quite shortly, leaving most of the time to persuade the court on the more contentious points
7. These applications usually turn on factual analysis

21

Exceptions to American Cyanamid

Finally disposes of claim APA Civil, para 42.56

American Cyanamid imposes a low threshold on the merits of the claim, which can be justified as a means of keeping use of court time proportionate in cases where it is anticipated there may well be a trial.
However, there are some cases where there is no realistic chance of the case ever going to trial. Granting an interim injunction without considering the merits in a meaningful way in such a case contravenes the defendant's right to a fair trial.

22

Test

The finally disposes of the claim exception applies if 2 conditions are satisfied

Test
The "finally disposes of the claim" exception applies if 2 conditions are satisfied:
(a) Assume injunction refused:
Claimant has no practical reason to take claim to trial
(b) Assume injunction granted:
Defendant has no practical reason to take claim to trial

23

Principles in final disposal applications

Where this exception applies C has to establish a far stronger case than merely a "serious question". Formulations differ in various authorities, but may be as high as "an overwhelming case" on the merits.

24

Cayne v Global Natural Resources plc [1984] 1 All ER 225
• Similar on the facts
• Overwhelming case on the merits

Chambers v British Olympic Association (2008) LTL 18/7/2008
• Injunction aimed at allowing athlete to compete in the Beijing Olympics despite a rule in the Association’s rulebook preventing this where a drugs test had been failed
• Interim injunction finally disposed of the case
• Applied the “high degree of assurance” test

The other requirements set out in American Cyanamid are the same.

25

Defamation claims
Defamation claims where Defendant alleges that the statement was substantially true (the old defence of justification) APA Civil, para 42.60. The 19th century authorities remain good law:

Greene v Associated Newspapers Ltd [2005] QB 972
Where D in a defamation claim:
(a) states in its witness statement that it intends to plead the defence of:
• substantial truth
• honest opinion
• public interest
(b) and the alleged libel is not obviously untruthful / malicious
The court will refuse an interim injunction (or discharge an existing injunction) in order to protect free speech.

26

Freedom of Expression
APA Civil, para 42.64. These often bring into conflict:

• The right to freedom of expression
• Protection of confidential information
Injunctions interfering with freedom of expression are governed by:
• the Human Rights Act 1998, s. 12, and ECHR art. 10; and
• Cream Holdings v Banerjee [2005] 1 AC 253.

27

COSTS OF THE APPLICATION

(2) [The Defendant shall pay the Claimant's costs of this Application.] [The costs of
this Application are reserved to be dealt with by the Judge who tries this Claim.]
[The costs of this Application are to be costs in the case.] [The costs of this
Application are to be the Claimant's costs in the case.]

28

VARIATION OR DISCHARGE OF THIS ORDER

The Defendant may apply to the Court at any time to vary or discharge this Order but if
he wishes to do so he must first inform the Claimant's Solicitors in writing at least 48
hours beforehand.

29

There are 3 protections for freedom of expression APA Civil para 42.64

1. C must take all practical steps to inform D of any application to restrain publication (HRA 1998, s. 12(2))
2. No interim injunction will be granted unless "the court is satisfied" C is likely to establish that publication should not be allowed (HRA 1998, s. 12(3))
3. Particular regard must be had to the importance of the right to freedom of expression (HRA 1998, s. 12(4)) and:

(i) whether the material is available to the public; and
(ii) whether it is in the public interest for material to be published

30

Mandatory injunctions APA Civil para 42.85

Interim mandatory injunctions are particularly sensitive, because they can have the effect of over-reaching the defendant in ways not readily compensated by the undertaking in damages. Being interim remedies, this obviously is happening before liability has been established.

31

Shepherd Homes Ltd v Sandham [1971] Ch 340 Megarry J
Traditionally interim mandatory injunctions are not granted unless the judge can feel a “high degree of assurance” about the cause of action.

Nottingham Building Society v Eurodynamics Systems [1993] FSR 468
The American Cyanamid guidelines apply to an application for an interim mandatory injunction. When considering whether there ought to be a higher test applied, by virtue of the mandatory relief requested, four guidelines were laid down:

32

4 guidelines Eurodynamics Systems?

(1) The overriding consideration is which course of action is likely to involve the least risk of injustice, should the interim decision turn out to be ‘wrong’ (i.e. the winning party at the interim stage ultimately loses at trial).
(2) The court must keep in mind that an order requiring a party to take some positive step at an interim stage may well carry a greater degree of injustice than preserving the status quo, if at trial the order turns out to have been wrongly made.
(3) In a case in which a mandatory interim injunction is sought, it is legitimate to consider whether the court feels a high degree of assurance that the applicant will be able to establish his case at trial, as the greater the degree of assurance the lower the risk of injustice.
(4) Even where the court does not feel a high degree of assurance, there may be circumstances in which it is appropriate to grant an interim mandatory injunction. The court still has to balance the risk of injustice between the parties.

33

National Commercial Bank Jamaica Ltd v Olint Corporation Ltd [2009] 1 WLR 1405, at [19], Lord Hoffmann said:

There is no underlying difference in principle between interim prohibitory and mandatory injunctions. His Lordship’s view is that it is often more likely that there will be irremediable prejudice to the defendant if the injunction is mandatory in nature.
If the injunction is likely to cause irremediable damage to the defendant, the court should be reluctant to grant the injunction unless it is satisfied that the chances that it will turn out to have been wrongly granted are low. It is for this reason that it is said that mandatory injunctions should be granted only if the court felt a ‘high degree of assurance’ that at trial it will turn out that the injunction was rightly granted.

34

No defence APA Civil para 42.81
Where the defendant has no defence to the claim, C can apply for summary judgment for a final injunction.

Even if the claimant does not apply for summary judgment, but just applies for an interim injunction, the court often does not apply American Cyanamid if there is no defence, and simply applies normal equitable considerations in deciding whether to grant the interim injunction.
Official Custodian for Charities v Mackey [1985] Ch 168

35

Negative covenants APA Civil para 42.73
An example is a covenant in a lease given by the tenant not to make structural alterations to the property. Or not to keep pets at the property.

Injunctions in these cases are normally granted as a matter of course. All you have to prove are:
(a) That the defendant has made the promise not to do something; and
(b) That they are now doing it.
All the injunction is doing is enforcing compliance with what the defendant has already promised not to do.

36

Covenants in restraint of trade APA Civil para 42.74-42.80
These are a particular example of a negative covenant. It is not uncommon for an employment contract or a service contract to contain a term that the employee / consultant will not compete with the employer for a stated period at the end of their engagement. There are two underlying problems:

(a) Unless it is “reasonable”, a covenant in restraint of trade is illegal
(b) To be reasonable a covenant has to be reasonably short. That means it will almost certainly expire before legal proceedings can reach trial
Although the law is more complicated than this, the basic position is that a covenant in restraint of trade will only be reasonable (and enforceable) if it is reasonable in:
• the activities covered
• geographical area
• period of time covered

37

Office Overload Ltd v Gunn [1977] FSR 39
An injunction will be granted (without further inquiry) if:

(i) all the facts are before the court, and
(ii) the covenant is prima facie valid, and
(iii) the court finds an infringement by D.

38

Lawrence David Ltd v Ashton [1991] 1 All ER 385
This means:

• That where the 3 points from Office Overload are present, the court simply grants the prohibitory injunction
• That if there is any doubt about any of the 3 points, the court applies American Cyanamid

39


QUESTION 2
You have been instructed on behalf of Gordon Engineering Ltd. The company has recently been served with proceedings and an application for an interim injunction restraining it from considering certain resolutions at any meetings of its shareholders pending trial. The resolutions relate to proposed alterations to the share capital of the company, which are part of a scheme under which the bulk of the company’s assets will be sold to a third party.

The directors of Gordon Engineering Ltd inform you that:
• the proposals are of the utmost importance;
• there will be considerable commercial loss if the scheme collapses; and
• it is essential that the scheme is completed within about the next three months, or it will fall through.

Your view is that the issues raised in the claim are so complex that it is likely to be at least two years before the claim is tried.
On the hearing of the application for the interim injunction, what principles will be applied?

-

40

Undertakings
Typical undertakings found in interim injunction orders include:

• Undertaking in damages
• Without notice undertakings (see above)

41

Undertaking in damages
Standard form undertaking

‘If the Court later finds that this Order has caused loss to the Defendant or any other Party served with or notified of this Order and decides that the Defendant or other Party should be compensated for that loss, the Claimant will comply with any Order the Court may make.’

42

PD 25A Guidance
para 5.1(1) provides that any order for an injunction, unless the court orders otherwise, must contain ..., an undertaking by the applicant to the court to pay any damages which the respondent sustains which the court considers the applicant should pay.

para 5.1A: ... when the court makes an order for an injunction, it should consider whether to require an undertaking by the applicant to pay any damages sustained by a person other than the respondent, including another party to the proceedings or any other person who may suffer loss as a consequence of the order.

43

Injunction Order
Will follow the format in LGS 07B.

PD 25A, para 5.3: Any order for an injunction must set out clearly what the respondent must do or not do.

PD 25A, para 5.2: An order for an injunction made in the presence of all parties to be bound by it or made at a hearing of which they have had notice, may state that it is effective until trial or further order.

PD 25A, para 5.1(3): If made without notice to any other party, [the injunction order must state] a return date for a further hearing at which the other party can be present,

44

Discharging and Varying Injunctions
Without Notice Injunctions
These are usually granted for a short period (about 7 days)
Usually have a provision for a second hearing with notice before the same Judge
Often have an additional provision allowing the Defendant to apply to vary or discharge on short notice before then. Dealt with by same level of Judge

As the Defendant was not present at the first hearing, the injunction may be varied or discharged on any ground, such as persuading the Judge:
• the essential conditions were not satisfied
• breach of duty of full and frank disclosure; or
• on the grounds of a defence

45

QUESTION 4
You are instructed by Hudson British Fashions Inc, which has been served with an injunction obtained by Cosworth Fabrics plc ("Cosworth"). The injunction was made without notice by a High Court judge. It restrains Hudson British Fashions Inc from using a consignment of expensive cloth which Cosworth says in its written evidence in support of the injunction infringes Cosworth's intellectual property rights. Hudson British Fashions Inc intends to contest the claim on the basis that the cloth comes from a reputable supplier and is in fact genuine Cosworth fabric, a point it raised in reply to an email from Cosworth's solicitors 2 days before the injunction was sought.

Advise Hudson British Fashions Inc on:
(a) how it may apply to court to discharge or vary the injunction;
(b) any grounds it might have for applying to vary the injunction; and
(c) any grounds it might have for applying to discharge the injunction.

-

46

Procedure
Apply back to the court that granted the original interim order.

• Can often be done under an express clause (if included) in the original order providing for a further return day to consider the case
• Any order made on an application without notice must contain a statement of the right to make an application to set aside or vary the order (CPR, r 23.9(3))
• An application to set aside or vary is made using the normal Part 23 procedure (application notice and witness statement in support)
• It must be made within 7 days after service of the order (CPR, r. 23.10(2))


47

Grounds to vary
eg if the injunction:

• is too wide
• fails to include clauses protecting D or third parties

48

Third Parties
With Notice Injunctions

Third Parties
They are not present. If an injunction has an unfair impact on them, they can apply back to the Judge for a variation

With Notice Injunctions
As the Defendant is given notice of the hearing, these can be discharged or varied by the Defendant only if there has been a material change of circumstances
Otherwise, the only route is to appeal (to higher court)

49

Grounds to discharge (in without notice applications)
eg. where:

Grounds to discharge (in without notice applications)
eg. where:

50

9. Amendment

Authority to Amend

• Before filing, issue or service: the document is just a draft, and can be amended without restriction
• After filing or issue, before service. Amendments can be made without seeking court permission
• After service. Amendments not involving a change of parties can be made with the consent of the other parties, or with court permission
• After service, amendments involving a change of parties can only be made with the court's permission.
See: CPR, r. 17.1 and r. 19.4(1).
Note CPR, r. 17.2, which gives the court the power to disallow amendments made as of right (before service). There is a 14-day time limit on applying to disallow.

51

Applying for permission to amend
Application notice
Copy of the draft amended statement of case (PD 17, para 1.2)
Witness statement may be required addressing the facts establishing the principles for allowing amendments, except in obvious cases

If the substance of the pleading is changed it will require a new statement of truth
Generally on notice (PD 17, para 1.1)
Application to substitute a party may be without notice (CPR, r. 19.4(3))

52

Principles for granting permission to amend APA ch 22
No criteria governing permission to amend are laid down in CPR rr. 17.1, 17.3 and 19.4.

In accordance with the overriding objective, amendments should generally be allowed where this is just and proportionate.

53

Merits of Substantive Amended Claim

Merits of Substantive Amended Claim WB 17.3.6
An amendment will not be allowed if the amended case is too weak.
• There needs to be a “real prospect of success” on the amended case

54

General Principles on Amending WB 17.3.5
Swain-Mason v Mills & Reeve [2011] 1 WLR 2735

The court must consider all the circumstances of the case.

55

Cobbold v London Borough of Greenwich, LTL 24/5/2001

When an amendment includes withdrawing an admission the court will take into account the practice under CPR, Part 14.

There is no absolute rule of law precluding an amendment to add a cause of action that arose after issue of the claim form.

• Overriding objective is to deal with cases justly
• Requires cases to be dealt with expeditiously and fairly
• Amendments in general ought to be allowed so that the real dispute between the parties can be adjudicated upon
• Provided that any prejudice caused to the other party by the amendment can be compensated in costs
• And that the public interest in the administration of justice is not significantly harmed
Note: prejudice, its weight, or the absence of prejudice, is one of several factors.

56

Late Amendments WB 17.3.7

• Late amendments can put the parties on an unequal footing
• They may jeopardise the trial date
• There is a heavy onus on a party seeking to amend close to the trial

57

Worldwide Corporation Ltd v GPT Ltd [1998] EWCA Civ 1894, Waller LJ said:

'In the modern era it is more readily recognised that in truth the payment of costs of an adjournment may well not adequately compensate someone who is desirous of being rid of a piece of litigation which has been hanging over his head for some time, and may not adequately compensate him for being totally (and we are afraid there are no better words for it) "mucked around" at the last moment. Furthermore, the courts are now much more conscious that in assessing the justice of the case the disruption caused to other litigants by last minute adjournments and last minute applications have also to be brought into the scales.'

58

Factors

• Is there a satisfactory explanation for not amending earlier?
• Prejudice to the party seeking to amend if permission is refused
• Prejudice to the other parties if permission is granted
• Whether the text of the amendments is clear and particularised
• History of amendments in the case
• Does the amendment substantially alter the case?
• Was the amendment "pre-shadowed" in earlier witness statements etc
• Perhaps, take into account the Mitchell / Denton principles on sanctions
• Strength of the amended claim (MacLeod v Mears, but this is unprincipled)

59

Amendments at End of Trial WB 17.3.8
Court has power to permit amendments even after judgment has been delivered, up to the point when the order drawing up the judgment is sealed (WB 17.3.8, 3rd para)
Factors

• Whether the amendment will give an unfair advantage
• Whether the resisting party was able to make submissions on the new case
• Whether the resisting party had sufficient notice of the new case
• If judgment has been delivered, there must be exceptional circumstances or strong reasons

60

Costs
Invariably, the party seeking to amend must pay “the costs of and occasioned by the amendments”.

Notice the two elements of the usual costs order on amending.

61

Orders permitting amendments
Usually have to include permitting the resisting party to amend any of its statements of case affected by the present amendments
Copies of any order and the amended statement of case must be served on other parties (PD 17, para 1.5)

Where the amendment involves a change of parties, by CPR r. 19.4(6) and PD paras 2.1 to 3.3 there will be consequential directions dealing with:
• filing and serving the claim form on any new defendant
• a new defendant becomes a party on service of the amended claim form
• serving relevant documents (including amended pleadings) on the new party and on other parties affected by the amendment
• filing of consent if there is a new claimant
• case management

62

Amendments to change parties (no limitation issue)
QUESTION 5
By an agreement negotiated between Cathy and Gordon, Cathy agree to buy a consignment of camera equipment for £36,000. The contract provided for payment against shipping documents, so Cathy paid for the goods before delivery. When the equipment was unpacked after delivery Cathy discovered that most of the items had been damaged. Gordon ignored letters from Cathy's solicitors, so proceedings were issued by Cathy against Gordon claiming damages for breach of contract.

Gordon has filed a Defence saying he was at all materials times acting as a director on behalf of Electrical Importers Ltd. The shipping documents and the invoice for the price are all on standard forms bearing the name of Electrical Importers Ltd.

Advise Cathy.

-

63

Amendments

CPR, r. 19.4
(1) The court’s permission is required to remove, add or substitute a party, unless the claim form has not been served.
(2) An application for permission under paragraph (1) may be made by –
(a) an existing party; or
(b) a person who wishes to become a party.

CPR, r. 19.2 APA Civil para 22.20
(1) This rule applies where a party is to be added or substituted except where the case falls within rule 19.5 (special provisions about changing parties after the end of a relevant limitation period).
(2) The court may order a person to be added as a new party if –
(a) it is desirable to add the new party so that the court can resolve all the matters in dispute in the proceedings; or
(b) there is an issue involving the new party and an existing party which is connected to the matters in dispute in the proceedings, and it is desirable to add the new party so that the court can resolve that issue.
(3) The court may order any person to cease to be a party if it is not desirable for that person to be a party to the proceedings.
(4) The court may order a new party to be substituted for an existing one if –
(a) the existing party’s interest or liability has passed to the new party; and
(b) it is desirable to substitute the new party so that the court can resolve the matters in dispute in the proceedings.

64

Amendments to change parties

• Permission must be sought for this type of amendment, where the amendment is desired after service of the claim form (r. 19.4(1)). Means
o No consent required before service
o After service, this type of amendment cannot be made by consent
• The test is whether the change in parties is desirable (r. 19.2(2))
• Application notice (N244) with written evidence
• Evidence must explain the new party’s interest in the proceedings (intervening) or connection with the claim (PD 19A, para 1.3)

65

Amendments after limitation
APA Civil, para 22.25-22.45

 Generally amendments are allowed provided there is no prejudice to the other side that cannot be compensated in costs.
 This means that tidying up amendments, even after limitation, are normally allowed.
 Amendments after limitation to add a new claim: circumvent LA 1980, so are banned by Limitation Act 1980 s. 35(3), subject to restricted exceptions.

New claim
• Adding or substituting a new party
• Adding or substituting a new cause of action

66

EXCEPTIONS

NEW PARTY ADDED OR SUBSTITUTED AFTER LIMITATION

EXCEPTIONS
(where amendments may be allowed after the expiry of limitation even though the amendment adds a new claim)

NEW PARTY added or substituted after limitation
WB paras 19.5.2, 19.5.7 & 19.5.8
Adding or substituting a new party is allowed under Limitation Act 1980, s. 35, only where:
• the amendment is necessary and
• complies with the CPR.


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Amendment

2 main applications of the principle

Two main applications of the principle:
• To correct a mistake: r. 19.5(3)(a)
• Claim cannot be carried on without the change in parties: r. 19.5(3)(b)

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Correcting a mistake WB 19.5.7
CPR, r. 19.5(3)(a):

The addition or substitution of a party is necessary [for the purposes of LA 1980, s. 35] only if the court is satisfied that - (a) the new party is to be substituted for a party who was named in the claim form in mistake for the new party ...

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In applying r. 19.5(3)(a) the court is really interpreting LA 1980, s. 35(6)(a):

(6) The addition or substitution of a new party shall not be regarded for the purposes of subsection (5)(b) above as necessary for the determination of the original action unless either—
(a) the new party is substituted for a party whose name was given in any claim made in the original action in mistake for the new party’s name;

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WB 19.5.7, 3rd para, draws a distinction between mistakes of name and of person

Mistake of name is where C knows he should be suing Smith, but mistakenly gives the name "Jones" for the defendant on the claim form.
Mistake of person is where C thinks Jones is the tortfeasor, so C sues Jones, but C later discovers that the tortfeasor was in fact Smith. C has sued the wrong legal person.

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Adelson v Associated Newspapers Ltd [2008] 1 WLR 585
This was an application to substitute a party after the expiry of limitation under r 19.5(3)(a). It was held that this provision of the CPR gives effect to the Limitation Act 1980, s 35, with the same intention as the old provision in RSC ord 20, r 5. It was therefore necessary to have regard to the pre-CPR principles in applying r 19.5(3)(a).
The principles are:

(i) r 19.5(3)(a) and s 35(6) allow more than the mere correction of the name of the party as it allows the substitution of a new party for the original party named;
(ii) in one sense, a C always intends to sue the person who is liable for the wrong he has suffered; but the test cannot be that he has made a mistake which can be corrected, otherwise leave to substitute would always be granted;
(iii) so there must be a test which includes, but is broader than, mere correction of name but narrower than substitution of the person intended to be sued for the person actually sued;
(iv) the test is: is it possible to identify the intended defendant “by reference to a description more or less specific to the particular case”? If it is, it is a mistake of the type covered by s.35(6)(a) as implemented by r.19.5(3)(a)
(v) so, if C gets the right description but the wrong name for his intended D, there is unlikely to be any doubt as to the identity of the person intended to be sued; but if he gets the wrong description, it will be otherwise
(vi) this test might allow the substitution of a new D, unconnected with the original D and unaware of the claim until after the expiry of the limitation period; but any potential injustice can be avoided by the exercise of the court’s discretion under s. 35.
Broadhurst v Broadhurst [2007] EWHC 1828 (Ch)
Use of the word “substituted” in r. 19.5(3)(a) as opposed to “added or substituted” in r. 19.5(3)(b) is significant. It means that a pure addition of a party is not permitted under r. 19.5(3)(a).

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Cannot be carried on without the amendment WB 19.5.8
Merrett v Babb [2001] QB 1174
This applies where there is some technical defect in the parties, such as a sole claimant bringing a claim to enforce a right vested in two people jointly. The second person must be joined, or the original claim will fail.
Other situations:

• Public rights in the absence of special damage, which have to be brought by relator proceedings in the name of the Attorney-General
• Claims by shareholders against directors for breach of director's duties to the company (which have to be brought in the name of the company, Foss v Harbottle (1843))

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NEW CAUSE OF ACTION added or substituted after limitation
Adding or substituting a new cause of action after the expiry of limitation is allowed by Limitation Act 1980, s. 35(3)-(5) in each of the 3 following circumstances

• The new claim is an original set-off or counterclaim
• The court disapplies the personal injuries 3-year time limit under s. 33
• The new claim arises out of the same or substantially the same facts as those already in issue

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Original set-off or counterclaim LA 1980, s 35(3)
• simply means it is the first time the defendant is pleading a counterclaim (or set-off)

• can be regarded as a procedural quirk. If this provision is used as an offensive weapon, the amendment may be refused in the court’s discretion (Law Society v Shah (No. 2) [2009] 1 WLR 2254)

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Same or substantially the same facts LA 1980, s 35(5)(a)
CPR, r. 17.4(2): “The court may allow an amendment whose effect will be to add or substitute a new claim, but only if the new claim arises out of the same facts or substantially the same facts as a claim in respect of which the party applying for permission has already claimed a remedy in the proceedings.”

In most cases this is done by comparing the original PoC with the proposed amended PoC to see if the amended case relies on substantially the same facts as originally pleaded.

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Goode v Martin [2002] 1 WLR 1828
Yachting accident on the Solent. After limitation C needed to amend to completely change her PoC, but to adopt the facts sets out in the Defence.
Applying traditional interpretation principles, the new case was not substantially the same as C's existing case, so at first instance permission to amend was refused.

In the CA, it was held HRA 1998, s. 3 allowed the court to read the words “are already in issue on” into r. 17.4(2) (after the word “as” in line 3)
Permission was granted for the amendment

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Amendment AFFECTING ACCRUED LIMITATION RIGHTS
Generally, this type of amendment is not allowed, because the party seeking to amend cannot compensate the prejudice to the other side by an order for costs:

Steward v North Metropolitan Tramways (1886) 16 QBD 556

This covers situations such as:-
Accident at work on a building site
C sues Main Contractor for beach of statutory duty as sole defendant
D files Defence denying breach
Limitation Expires
D seeks to amend the Defence to plead C was not wearing safety equipment
C says: do not allow the amendment, it prejudices me, because if D is right I would want to sue my employer for not issuing the safety equipment, but I am now time-barred against my employer

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Exceptionally, an amendment after limitation has expired affecting accrued limitation rights may be allowed:

(1) where the party seeking to amend is not at fault:
Weait v Jayanbee Joinery [1963] 1 QB 239

(2) where the “innocent” party already knew the facts introduced by the proposed amendments.

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Example
Cluley v RL Dix Heating [2003] EWCA Civ 1595 WB 17.3.5
Heating system installed in October 1996
Claim issued 2002

Defence May 2002: admitted the contract between C and D, denied breach
June 2003 D sought to amend the Defence to deny it was the contracting party. D argued it was for C to decide who to sue, and any prejudice was caused by C
Held: Original Defence vindicated C’s decision to sue D, and D was not allowed to amend because, limitation having expired, C could not be adequately protected by an order for costs.


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8 Third Party Proceedings/Additional claims under Part 20
See APA Civil chapter 20 and the DRF Manual Chapter 15
There are also 2 podcasts on Part 20 on Moodle

In Lewis v Russell the Defendant may take the view that part or all the blame for the collision rests with the driver of Miss Lewis’ car, Mr Williamson. If so, Mr Russell (the defendant) may issue a Third Party claim against Mr Williamson.

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Nature of a Third Party Claim
While grafted into the original claim, a third party claim is also in some respects treated as a separate claim.

• limitation periods are different
• case management needs to be synchronised if possible
• a Part 20 claim can survive (if there is anything left to deal with) if the main claim ends early
• trials of the main proceedings and third party claims normally take place together

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Relief that can be claimed in third party proceedings

• Contribution
• Indemnity
• Other remedies related to the original proceedings
• Asking court to answer a question related to the original proceedings

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Contribution (as a remedy)

The third party claim in Lewis v Russell would principally seek a contribution towards any damages that Mr Russell might be ordered to pay to Miss Lewis. The nature of contribution claims is helpfully described in BCP at para 29.2. Seeking a contribution from other drivers is dealt with by the Civil Liability (Contribution) Act 1978. Section 1(1) provides:
“Subject to the following provisions of this section, any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).”

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Contribution as as remedy 2

The most important question is whether Mr Williamson and Mr Russell would be liable to Miss Lewis "in respect of the same damage". This would be the case, because Miss Lewis could have sued both drivers, and both drivers (if to blame), would be liable to Miss Lewis for same damage, her personal injuries. Note the word is "damage", not "damages".
The extent of any contribution between the drivers, like contributory negligence, is decided by a combined "causation" and "blameworthiness" test, with a weighting towards blameworthiness.

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Indemnity

A contribution normally results in a percentage split between the contributing parties. An indemnity usually produces a 100% reimbursement. Indemnities arise either as a matter of contract, such as indemnity clauses in many building contracts, or by law, typically under specialised statutes.

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"Some other remedy"

In this context, Mr Russell could also include a claim for damages for his own personal injuries, if any, (and damage to his car) from Mr Williamson in his third party claim.

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“Third Party Notice”
Technically, a third party notice issued in this situation is called a "Defendant's Additional Claim Against a Third Party", see PD 20, para 7.10. Not surprisingly, they are commonly referred to as third party notices.

There is a prescribed form for the additional claim form (form N211).
The N211 has to include the particulars of the third party claim: either by drafting them into the claim form, or attaching them to the claim form (CPR, r. 20.7(4)).

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Permission to issue an Additional Claim/Third Party Claim
Permission is not required to file an additional claim/third party claim provided it is issued before or at the same time as filing of the Defence (CPR, r. 20.7(3)(a)).

An additional claim/third party claim may only be issued after that time with the court's permission (r. 20.7(3)(b)). This will need:

• application notice
• a copy of the proposed third party claim (PD 20, para 1.2)
• witness statement stating (PD 20, para 2.1 to 2.4):
• the stage the main proceedings have reached
• the nature of the additional claim
• a summary of the facts on which the additional claim is based
• the explanation for any delay
• a timetable of the proceedings to date

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The application is usually made without notice (r. 20.7(5)). Factors governing the discretion are set out in r. 20.9(2):

• the connection between the additional claim and the original claim
• whether D is seeking substantially the same remedy as C is claiming
• whether D is asking the court to decide any question connected with the subject matter of the existing proceedings

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4p claim

Fourth Party claims
A third party can commence a Fourth Party claim against a non-party they in turn blame.
In fourth party claims (and beyond), in the body of the statement of case the party is referred to by name rather than as the "Fourth Party" (PD 20, para 7.11).

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Limitation

Limitation
The Limitation Act 1980, s. 35(1)(a) provides:
"For the purposes of this Act, any new claim made in the course of any action shall be deemed to be a separate action and to have been commenced in the case of a new claim made in or by way of third party proceedings, on the date on which those proceedings were commenced ..."
An additional claim "is made" when the court issues the appropriate third party claim form (r. 20.7(2)).

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Service

Service
An Additional Claim Form must be served within 14 days after it is issued (r. 20.8(1)(b)).
It must be served together with:
• the usual response pack forms (r. 20.12(1)(a) to (c))
• all the existing statements of case (r. 20.12(1)(d)).
It must also be served on all the other existing parties (r. 20.12(2)).

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Treated as a claim
Additional Claims/Third Party claims are treated for the purposes of the CPR like claims, with some rules not applying (r. 20.3).

• the original defendant has the status of being the claimant in the TPN
• the Third Party has the status of a defendant

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No Default Judgment

A Defence is required to an Additional Claim/Third Party claim. The normal rules on default judgment do not apply (r. 20.3(3)). Instead, r. 20.11(2) provides that where the Third Party fails to acknowledge service or serve a Defence to the TP claim:
• they are deemed to admit the additional claim
• they are bound by any judgment or decision in the main proceedings which is relevant

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Directions

Where a Defence is filed to the TP claim, the court must consider the future conduct of the case and give appropriate directions. In doing so, the court must ensure, so far as practicable, that the original claim and additional claim are managed together (r. 20.13).

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Contribution Notice
These are used for bringing claims for contribution, indemnity and related relief by one existing defendant against another existing defendant.

CPR, r. 20.6:
(1) A defendant who has filed an acknowledgment of service or a defence may make an additional claim for contribution or indemnity against a person who is already a party to the proceedings by –
(a) filing a notice containing a statement of the nature and grounds of his additional claim; and
(b) serving the notice on that party.
(2) A defendant may file and serve a notice under this rule –
(a) without the court’s permission, if he files and serves it –
(i) with his defence; or
(ii) if his additional claim for contribution or indemnity is against a party added to the claim later, within 28 days after that party files his defence; or
(b) at any other time with the court’s permission.