Blogs
There are many reasons why a claimant may wish to issue but not immediately serve proceedings, for example, to preserve a limitation date or to put pressure on a defendant to try to settle.
In that event, the claimant has a period of four months within which to serve the proceedings upon the defendant. But what if the claimant decides not to serve the proceedings after all?
In the case of Aktas v Adepta (a registered charity) and Dixie v British Polythene Industries Plc [2010] EWCA Civ 1170, it was held that where a claim form is issued but not served, then the claim will not automatically lapse after the four-month service period, but will remain in existence until brought to an end. This may be either where the claimant files a notice of discontinuance or if the court sets aside the claim. This principle has been upheld in later cases.
What are the costs consequences of issuing but not serving?
If the claimant wants to bring proceedings to an end by filing a notice of discontinuance, then this will generally result in the claimant being liable for the defendant’s costs on the standard basis up to the date on which the notice was served. The claimant who wishes to avoid this can apply to the court, but certain grounds must be met to be successful. Due to the costs consequences of discontinuance, it makes sense for the claimant to attempt to come to an agreement with the defendant about costs before filing the notice of discontinuance.
Alternatively, the claimant can do nothing and hope for the best. However, this approach is not risk-free, and the claimant must be aware that the defendant may ultimately decide to pursue their costs by applying to court for an assessment.
The defendants were awarded their costs of and incidental to the claim in the case of Webb Resolutions v Countrywide Surveyors [2016] Ch Div (4 May 2016) after the expiry of the four-month service period (they made their application in September 2014 when the claim had been issued in August 2013 and never served.)
Claimants should always consider carefully about issuing proceedings as it is clear that they are at risk of costs from the moment the claim is issued.
Are there any exceptions to the rules on discontinuance?
Yes – probate claims (governed by CPR 57). If a claimant no longer wants to pursue a probate claim, they cannot simply file a notice of discontinuance. Instead, they must make an application to court for the claim to be discontinued or dismissed. (The defendant can also make the application if proceedings have been served and they have acknowledged service). If an application is made, liability for costs are within the court’s discretion, and so, again, there is the risk of a costs order being made against the claimant.
Here to help
If you are in a situation in which you need to issue proceedings, then please get in touch with our Dispute Resolution Solicitors below.
