The proper administration of justice hinges on the timely and efficient resolution of disputes. Hence, the problem of stalled litigation presents a challenge to this ideal. When litigation is deliberately delayed or prolonged, it not only clogs the judicial system but also undermines the principles of fairness and equity that courts strive to uphold. This Article explores the detrimental impact of such practices, examining how they can be strategically used to frustrate the course of justice, and proposing measures to curb this abuse to ensure that the legal process remains just, efficient and accessible for all.
In the recent case of Watford Control Instruments v. Brown [2024] EWHC 1125 (Ch), the court addressed the issue of abuse of process through “warehousing”. The claimant, Watford Control Instruments (WCI), sought to sue the defendant, a former director of YZMA, for breach of fiduciary duty. The claim was dormant for nearly three years before WCI attempted to relist it. The defendant sought to strike out the claim, arguing it was an abuse of process due to the prolonged delay.
At first instance, the court found an abuse of process but opted for a lesser sanction. On appeal, Mr Justice Richards ruled that such “warehoused” claims should be struck out unless ‘compelling reasons’ justify otherwise. He confirmed that the principle from Grovit v Doctor [1997] 1 WLR 640 remains applicable under the current Civil Procedure Rules (CPR). Consequently, WCI’s claim was struck out for abuse of process, setting a significant precedent for handling stalled litigation.
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An abuse of process is defined through case law as the use of the court process for purposes, or in a manner, that deviates significantly from its ordinary and proper use. This broad definition grants the court considerable discretion in determining whether a party’s conduct constitutes an abuse.
Under CPR 3.4(2)(b) and the court’s inherent jurisdiction, the court has the authority to strike out a claim form and particulars of claim on grounds of abuse of process. Grounds for such action include a complete disregard of procedural rules, bringing successive related actions against the same or different defendants in violation of the rule laid down in Henderson v Henderson, attempting to relitigate an issue that has already been decided, and deliberately delaying the prosecution of, or “warehousing” a claim.
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Civil Procedure Rules 1998
When the Civil Procedure Rules were introduced in 1998, Lord Woolf, their creator, hoped they would eliminate outdated claims and motions to dismiss for lack of prosecution. A year earlier, in the case of Arbuthnot Latham Bank Ltd v Trafalgar Holdings [1997] EWCA Civ J1216-15, Lord Woolf had first referred to warehousing in the context of legal proceedings:
“Whereas hitherto it may have been arguable that for a party on its own initiative to, in effect, “warehouse” proceedings until it is convenient to pursue them does not constitute an abuse of process, where hereafter this happens this will no longer be the practice. It leads to stale proceedings which bring the litigation process into disrespect. As case flow management is introduced, it will involve the courts becoming involved in order to find out why the action is not being progressed …”.
Lord Woolf’s confidence in the courts’ proactive role in managing case flow may have been overly optimistic, especially now, when a shortage of judges and court staff makes such unprompted judicial intervention improbable. As a result, claims can stagnate for extended periods without court involvement, leaving defendants in a difficult position.
Understanding Stalled Litigation
Stalled litigation refers to the deliberate or unintentional delay in the progress of a legal case. This can occur due to various reasons such as procedural inefficiencies, lack of evidence or strategic delays by one of the parties involved. While some delays are inevitable in the judicial process, prolonged stalling is considered as undermining the integrity of the legal system.
The primary consequence of stalled litigation is the denial of timely justice. Prolonged delays can lead to increased legal costs, diminished quality of evidence and undue stress for the parties involved. Moreover, it is bound to clog the judicial system, leading to a backlog of cases and further delays in other proceedings, along with increased costs.
Legal Framework for Addressing Stalled Litigation
The legal framework addressing stalled litigation in the UK primarily revolves around the Civil Procedure Rules (CPR), which provides comprehensive guidelines designed to ensure the fair and efficient handling of cases. Key elements of this framework include:
1. CPR Part 1:
The overriding objective of the CPR is to enable the court to deal with cases justly and at proportionate cost. This includes ensuring that the parties are on an equal footing, saving expenses, dealing with cases in ways that are proportionate to the complexity and importance of the issues, ensuring it is dealt expeditiously and fairly, and allotting to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases.
2. Case Management Powers:
Judges in the UK wield significant case management powers under the CPR. These powers allow them to manage the progress of cases actively to prevent unnecessary delays. Judges can set strict timelines for the submission of evidence, limit the issues to be explored at trial, and control the length of hearings. These powers are vital in preventing stalled litigation and ensuring that cases move forward efficiently.
3. Striking Out Applications (CPR Part 3):
Under CPR 3.4(2)(b), the court has the power to strike out a statement of case if it appears that the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings.
CPR 3.4(2)(b) states:
3.4 (2) The court may strike out(GL) a statement of case if it appears to the court –
(a) that the statement of case discloses no reasonable grounds for bringing or defending the claim;
(b) that the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings;
This can be applied in instances where there is prolonged stalling or “warehousing” of cases without a justifiable reason, effectively preventing misuse of the legal system by parties.
4. Sanctions for Non-Compliance:
The courts have the authority to impose various sanctions on parties that fail to comply with rules, practice directions or court orders. These sanctions can range from fines and cost penalties to the striking out of claims or defenses. Such sanctions are a critical tool in discouraging delays and ensuring adherence to the procedural timeline.
5. Encouraging Alternative Dispute Resolution (ADR):
The CPR and the courts encourage the use of ADR methods such as mediation and arbitration to resolve disputes. ADR can often provide a quicker resolution to disputes without the need for protracted litigation, thereby helping to reduce the burden on the courts and the parties involved.
6. Procedural Rules to Prevent Abuse of Process:
Specific rules within the CPR, like those preventing duplicative litigation, as the principle stipulated in ‘Henderson v Henderson [1843-60] All E.R. Rep. 378’, are designed to avoid unnecessary re-litigation of issues already decided or litigation that aims to harass or pressure an opponent unduly. Henderson established the principle that parties must present their whole case, including all relevant issues, in one set of proceedings. Failure to do so without a valid reason can constitute an abuse of the court process.
This framework forms the backbone of the system designed to address and mitigate stalled litigation, ensuring that the courts can deliver timely justice while maintaining fairness and efficiency in the administration of law.
Identifying Abuse of the Court Process
Abuse of the court process occurs when the legal proceedings are misused in a manner that undermines the administration of justice. The Courts apply a two-stage analysis for abuse, which includes:
- Determine Abuse: The court shall first decide whether the claimant’s conduct amounts to an abuse of process. ‘Asturion Foundation v Alibrahim’ [2020] 1 WLR 1627 clarified that a unilateral decision by a claimant to delay pursuing a claim for a substantial period could be an abuse of process. The court must consider the reason for the delay and the length of the period when deciding whether it constitutes an abuse.
- Sanction Decision: If abuse is found, the court then decides the appropriate sanction. As highlighted in Board of Governors of the National Heart and Chest Hospital v Chettle (1998) 30 HLR 618, a claim will usually be struck out unless there are compelling reasons not to do so.
Some examples of claims that can be regarded as abusing the process of court include:
- Frivolous or Vexatious Claims: Bringing claims without a genuine legal basis, often to harass or pressure the opposing party;
- Deliberate Delays: Employing tactics to intentionally delay the proceedings, such as repeatedly requesting adjournments or failing to comply with court orders; and
- Duplicative Litigation: Initiating multiple proceedings on the same issue to frustrate the legal process.
Legal Precedent – ‘Abuse of Process’
Precedent has shaped the understanding of stalled litigation as an abuse of the court process in the UK.
The principle of dismissing an action for want of prosecution was established in ‘Birkett v James’ [1978] AC 297. However, for a claim to be struck out under this principle, there has to be an inordinate and inexcusable delay causing a substantial risk that a fair trial was not possible or serious prejudice to the defendant.
‘Grovit v Doctor [1997] 1 WLR 640’ further expanded this principle, recognising that delay by a claimant not only affects the defendant but also other court users. It established that a claimant’s unilateral decision not to progress a claim could constitute an abuse of process.
In Grovit, it was held that the courts exist to resolve disputes, and any action not pursued with the intention of resolution constitutes an abuse of process. This abuse could justify striking out the claim even if no direct prejudice to the defendant could be demonstrated. The abuse of process includes cases where the claimant starts and continues litigation without an intention to bring it to a conclusion.
The Role of the Judiciary
Judges play a crucial role in preventing and addressing stalled litigation specifically through active case management, which involves:
- Setting and Enforcing Timelines: Ensuring that cases progress according to a set schedule;
- Imposing Sanctions: Penalising parties that fail to comply with procedural requirements, such as fines or striking out claims; and
- Encouraging Alternative Dispute Resolution (ADR): Promoting the use of mediation and arbitration to resolve disputes efficiently.
Recent judicial commentary has emphasised the importance of preventing stalled litigation. Judges have highlighted the need for strict adherence to procedural rules and have shown a willingness to impose sanctions to deter abusive practices.
No intention to proceed to Trial: A New High Court Ruling on Grovit abuse.
In a recent High Court case, Lloyd v Hayward & Anor [2024] EWHC 2033 (Ch) (05 August 2024), the court looked again at the complex issue of whether excessive delays in litigation can constitute an abuse of process. The judgment of HHJ Keyser KC provides a comprehensive analysis of the legal principles surrounding “Grovit” abuse, a term used to describe cases where a party deliberately prolongs proceedings with no genuine intention to proceed to trial.
“I note that the defendants have counterclaimed in these proceedings and are to be regarded as claimants for the purpose of the counterclaim. Any points that can be taken against the claimant in respect of delay or warehousing can, as it seems to me, be taken equally against the defendants. Grovit abuse is not about stealing a march: it is about not wanting to march at all.” – HHJ Keyser KC
The case also highlights the particular challenges faced by defendants who raise counterclaims. The court affirmed that the duty to progress a counterclaim is essentially identical to the duty to progress the main claim, making it equally difficult for defendants to argue abuse of process in such circumstances.
In Lloyd, the defendants applied to strike out the case and the basis of the application was that the claimant had been alleged to have no genuine intention of taking his claim to trial. It was said that this amounted to an abuse of process. The issue was whether litigation was being conducted with no real intention of taking the matter to trial, following the decision of the House of Lords in Grovit v Doctor [1997] 1 WLR 640.
The judge emphasised the gravity of Grovit abuse, highlighting its detrimental impact on both the overall justice system and individual cases. This type of misconduct, characterised by a deliberate intention to delay proceedings, directly contradicts the core principles of efficient and fair litigation. While the court possesses the power to strike out a claim for Grovit abuse, the judge cautioned against viewing this as a standard response. Instead, each case should be assessed on its own merits to determine the most appropriate remedy.
In this particular case, the judge concluded that there was no evidence of Grovit abuse. Despite acknowledging significant delays, the court attributed some of these to its own administrative errors. Importantly, the judge also noted that the defendant, who had filed a counterclaim, shared responsibility for progressing the case and could not solely rely on the claimant’s delays to justify an abuse of process argument.
High Court Dismisses Solicitor’s Counterclaim Due to Excessive Delay
A solicitor’s counterclaim was dismissed by the High Court due to a six-year delay in bringing proceedings, which the court deemed an abuse of process. Master Davison ruled that the defendants in Western Avenue Properties Ltd & Anor v Soni & Anor had “seriously breached” the overriding objective of the court by warehousing the counterclaim. He characterised the delay as “inordinate, inexcusable, and tactical.”
The initial dispute involved a confidentiality claim against the solicitor, Sadhana Soni, who had previously worked as in-house counsel for Western Avenue Properties. The claimant sought an interim injunction to prevent Soni from representing a particular client, which was granted. Soni then counterclaimed for unpaid fees.
After a significant delay of nearly five years, the defendants successfully applied to strike out the claimant’s claim based upon the principle in Havering London Borough Council v Persons Unknown [2021] EWHC 2648 (QB) which is noted in the White Book as authority for the following proposition: “A failure to progress a claim expeditiously following the grant of an interim injunction may well be found to be an abuse of process.” The commentary at 3.4.16 of volume 1 of the White Book states:
“In Wearn v HNH International Holdings Limited [2014] EWHC 3542 (Ch), Barling J, the case was struck out under CPR rule 3.4(2)(b) and rule 3.4(2)(c) for delay and noncompliance with court orders. The claim had been ongoing for almost 14 years and the claimant was largely responsible for the delay. The court recognised that the guiding principle was the delay alone, even if it was inordinate and inexcusable, could not be an abuse of process. However, abuse of process might arise when delay was combined with some other relevant factor.”
“In Alfozan v Quastel Midgen LLP [2022] EWHC 66 (Comm), HHJ Pearce, sitting as a High Court Judge, ruled that evidence or very long period of procedural inactivity by the claimant often gives rise to an inference that the claimant has no real intention of progressing the claim. However, that inference can be rebutted if there is a satisfactory explanation for the delay.”
However, they subsequently sought to revive their counterclaim, arguing that it had been temporarily paused. The learned master, however, concluded that the more likely explanation was that the defendants had deliberately avoided pursuing the counterclaim to prevent provoking the claimants into action.
It seems to me there is also force in Mr Warwick’s point that the defendants are “approbating and reprobating”, that is to say they are castigating inaction on the part of the claimants but seeking to excuse exactly the same inaction on their own part. In general the law frowns upon such conduct and that has indeed the status of a legal principle – see Express Newspapers Plc v News (UK) Limited [1990] 1 WLR 1320 (Ch).
Master Davison ruled that the defendants had engaged in “tactical maneuvering” by intentionally delaying their application for directions in the counterclaim until the claimant’s case was struck out. He therefore dismissed the counterclaim. The learned Master ruled:
“The defendants are in serious breach of the overriding objective. It seems to me that there is, or should be, parity with the treatment of the claimants’ claim. The delay here is inordinate and inexcusable and (though not strictly relevant to the application) the claimants would be prejudiced by it. Prejudice is to be inferred from the scale of the delay and the nature of the counterclaim.” – King’s Bench Master Davison
Practical Steps for Litigants
Parties involved in litigation must ensure strict compliance with court orders and procedural rules. Non-compliance can lead to severe penalties and may result in a finding of abuse of the court process that directly results in the case being struck out. In addition to this, litigants should engage in proactive case management, including timely submission of documents, cooperation with the opposing party and adherence to court schedules. This helps in maintaining the integrity of the legal process and avoiding unnecessary delays.
Stalled litigation, when used as a tactic to abuse the proper process of the court, undermines the administration of justice and burdens the judicial system. Our legal framework, through statutory provisions, rules and case law, provides mechanisms to address and prevent such abuses. It is imperative for litigants to adhere to procedural rules and for the judiciary to exercise active case management to ensure the timely and fair resolution of disputes. Through strict enforcement, the integrity of the legal process can be preserved, ensuring justice is served efficiently and effectively.
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