HomeFWJ TakeawayDebt recoveryEnforcementMore evidence that the courts will penalise COVID-19 opportunists

The courts are penalising parties to litigation who try and take advantage of Covid and the pandemic. This recent case explains more.

In the recent case of Stanley v London Borough of Tower Hamlets [2020] EWHC 1622 (QB), the judge, Mr Justice Julian Knowles, determined that it was unreasonable for Stanley’s solicitor to have served their claim by post during lockdown. The judgment was subsequently set aside and the defendant, Tower Hamlets Council, granted relief from sanction, given 14 days to file and serve the acknowledgement of service and defence, and awarded full costs in its application.

This is the first case in which the High Court has exercised its general discretion when faced with procedural default caused by COVID-19.

Background

The claimant brought a claim against the council for breach of GDPR and Article 8 Rights, and misuse of private information. The papers were put in the post to the defendant by the claimant’s solicitor on 25th March 2020. No Acknowledgement of Service was filed by the defendant and Judgment in Default was entered on 17 April 2020.

The defendant’s application for setting aside the default judgment

In its application, the council stated that it had shut its offices on 23 March 2020 in accordance with the government lockdown and that, as a result, had not received the papers. The council argued that the claimant’s solicitors had acted inappropriately by serving the papers by post during lockdown when they knew, or ought to have known, that its offices would be closed.

The council made clear that they intended to defend the claim and the basis of their defence.

Consideration of the application

The court considered the relevant test for setting aside judgment and found that the council had, in its application, established a strong case for defending the claim. The judge then had to go on to consider whether there was any other good reason to set aside the default judgment. In reaching his decision, the judge said he was satisfied that there was a good reason to set aside the default judgment on the basis that the claimant’s solicitor posted the documents to the defendant at precisely the time that the unprecedented national health emergency was unfolding. He highlighted that the claimant’s solicitor “took no steps to ascertain whether the papers had been received and were being processed”. He went on to say that “The world shifted on its axis on 23 March 220 and it was incumbent on him as a responsible solicitor and an officer of the court to contact the council to acknowledge that the situation had changed, and to discuss how proceedings could best and most effectively be served”.

The court found that the reason for the defendant’s default was the COVID-19 crisis and that, but for the defendant’s offices being shut, it would have responded to the claimant’s claim. The court held that another relevant circumstance was that the claimant’s solicitor was at fault for not checking with the defendant whether postal service was still possible and feasible. Mr Justice Julian Knowles stated that “That was an obvious step which he should have taken”.

The court acknowledged the need to enforce compliance with the rule and to conduct litigation at proportionate cost, but stated that it was ‘unconscionable’ for the claimant to benefit from the COVID-19 crisis.

The award of costs

The defendant was awarded its costs in full.

Key points to take away

It is worth remembering the key passages from Denton v White [2014] EWCA Civ 906:

            “The Court will be more ready to penalise opportunism”.


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