Time lost may never be found again

The decision in Medhi Khosravi v British American Tobacco plc [2016] EWHC 123 (QB) provides a useful reminder that it can be a risky strategy to seek extensions of time for service of a claim which has already been issued. Such extensions should not be granted lightly, and might be set aside at a later date.

Extensions of time for service of a claim

Under the civil procedure rule 7.5 where the claim form is to be served within jurisdiction the defendant must be served with the claim form within four months of its issue at court. However, under civil procedure rule 7.6 the court may grant an application by a claimant to extend the time for service of the claim.

Facts

The claim in this case was for "hundreds of millions of pounds" and concerned an alleged kidnap of and serious physical assaults on the claimant by the alleged agent of certain companies within the British American Tobacco group, connected to an alleged Iranian government investigation into the smuggling of cigarettes into Iran.

The judge noted that the claim seemed far-fetched and called out for an explanation. Nevertheless, the judge commented that when the subject matter of litigation turns upon allegations of skulduggery in international business transactions, that inherent implausibility is by no means always a sure guide to the merits because people do sometimes resort to "surprising tactics" when the stakes are high. However, the Judge also observed that no lawyer had put his or her name to the pleading of the claimant, which lacked cogency and coherence.

The claim had been issued on 10 January 2014 and ordinarily would have been due to be served on the first defendant in May 2014. However, seven extensions of time were obtained before it was served on the first and sixth defendants on 8 September 2015 (twenty months after its issue). These defendants brought applications for the setting aside of various orders made granting the extensions of time for service. They also brought applications to strike out the claim, and for summary judgment and a dismissal of the claim.

Decision

The judge struck out the claim and granted summary judgment against the claimant.

Although it was unnecessary for him to do so, he also considered the application for the extensions of time for service of the claim to be set aside.

The judge noted that the jurisdiction to extend time under rule 7.6 must be exercised in accordance with the overriding objective of the civil procedure rules (which is to enable the court to deal with cases justly and at proportionate cost). A good reason must be given for the extension of time to be granted.

In this case the claimant's stated reasons for the extensions were (i) a lack of funding; and (ii) because time was needed to gather further evidence.

The judge noted that the court will not generally recognise lack of funding as a good reason.

As for time required to gather evidence, the judge noted that this reason might have justified the seeking of a stay (at an inter partes hearing) once the proceedings had been launched but that it was hard to see how this would be a reasonable ground for holding up the service of the claim form for nearly eighteen months. Although the claimant had been in poor health, the judge stated that defendants as well as claimants are entitled to consideration and fair treatment in the litigation process and that the longer the process drags on the greater the time and expenditure the defendants will have to devote to it; they are entitled to see "at least the prospect of light at the end of the tunnel".

The judge concluded that but for having already struck out the claims, he would have set aside the orders granting extensions of time for service.

Commentary

The judge emphasised that extensions should not be granted as a formality or go through "on the nod". The overriding objective should not be allowed to lapse unnecessarily.

His decision is a warning to claimants who do not take seriously the obligation to serve claims which have been issued within the four month period laid down in rule 7.5. If a claim is not served in time it may need to be re-issued, at a considerable cost, or even risk being lost entirely because of a limitation period.

Rather than seeking an extension of time for service of a claim form, a safer strategy for a claimant to adopt if it needs more time, might be to serve the claim form and then make an application to court for a stay in proceedings.

It is also noteworthy that the judge commented that where a claimant's difficulties in serving the claim in time could be regarded as attributable to wrongdoing by a defendant (for example, as might be the case in a personal injury claim), it might be appropriate for the court to show a degree of forbearance to the claimant. However, that was not position in this case.