Procedural delays: TT Club looks at claims being struck out

TT Club has cited a legal case that highlighted the failure to follow through proceedings within a reasonable time frame, and the circumstances under which such delayed claims might be struck out.

The Club noted that it could be frustrating when proceedings were commenced, but not followed-through in a reasonable time-frame. English law articulates three requirements before a claim may be struck out and this judgment clarifies that all three must be satisfied.

In the case under review, a shipping line carried a shipment of bananas in 28 containers from Ecuador and Honduras to Albania. On arrival, the bananas were found to be damaged and the consignee issued proceedings in England against the shipping line, based on delay and an alleged failure to maintain correct temperatures.

Four years and seven months later, the claimant still had not applied for a Case Management Conference. Under the Civil Procedure Rules (CPR) this should have been done within 14 days.

The line defendant made an application to strike out the claim, asserting that the three relevant requirements under the CPR were satisfied, these being that:

  • the delay was inordinate;
  • there was a total disregard of court process; and
  • a fair trial had been prejudiced. 

The shipping line further alleged that the claimant was “warehousing” the claim until it was convenient to proceed with it.

The claimant resisted on grounds of proportionality, in particular that strike out would deprive it of the right to pursue a prima facie legitimate claim. Additionally, it argued the court had a broad discretion, and there were other more appropriate sanctions.

The court found that the delay was inordinate, was not satisfactorily explained, and that it had increased costs. However, there was insufficient evidence that it had prevented a fair trial.

Specifically, the necessary documents had already been collated and the argument would not be greatly dependent on witness evidence. The court was not satisfied on the facts that the claimant had acted intentionally in warehousing the claim, as alleged by the shipping line.

The court therefore ruled that it was not proportionate to strike out the claim. The appropriate sanction was payment of security for costs in the sum of £100,000.

TT Club said that this case made it clear that, under English law, all three of the CPR requirements mentioned above, including prejudice of a fair trial, must be satisfied to justify strike out.

The judgment also emphasizes that strike out must be proportionate.

This was distinguished from an application for relief from a sanction, where the only issue is whether the sanction was properly imposed.

TT Club noted that US Courts take a similar approach to strike out applications, referred to as ‘motions to dismiss for lack of prosecution’. Federal Courts have the inherent power outside of the rules of civil procedure to evaluate whether an alternative sanction would be more appropriate to achieve the orderly and expeditious disposition of cases. State courts broadly follow the same approach, albeit that there may be specific rules applicable.

Alba Exotic Fruit SH PK v MSC Mediterranean Shipping Co SA

[2019] EWHC Comm 1779

https://www.ttclub.com/loss-prevention/tt-talk/tt-talk-legal-eagle-considering-procedural-delays-151226/?dm_i=2RU,6O142,9G2UR,QKX48,1