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09 February 2021
The Court of Appeal recently ruled that pleadings which have previously been struck out cannot be used to introduce a new, limitation-barred claim that arises out of substantially the same set of facts as the struck out claim (Libyan Investment Authority v King ( EWCA Civ 1690)).
The claim arose out of a failed joint venture between the parties to build a shopping centre in Hertfordshire. The claimants' amended particulars of claim were struck out by the first-instance judge on the basis that there was no reasonable prospect of any of the claims succeeding. However, the claim form was not struck out in order to give the claimants the opportunity to reformulate their claims in a viable manner.
These amended claims were new claims and therefore arguably statute barred, but the claimants applied to amend their particulars of claim on the basis that a new claim can be pleaded after the limitation period has expired, provided that it arises out of the same facts, or substantially the same facts, as an ongoing claim (Civil Procedure Rule (CPR) 17.4). The first-instance judge allowed the amendment on the basis that the new claims arose out of the same facts as those pleaded in the previously struck out claims.
The defendants appealed the first-instance decision and were granted permission to appeal on a single ground: that the court had no power to grant permission to the claimants to amend their claim because there were no claims in issue in the case (providing facts from which a new claim could arise) as all of the claims had been struck out.
The Court of Appeal allowed the appeal, unanimously finding that:
However, by way of a majority decision, the Court of Appeal allowed the claimants to amend their claim under the 'slip rule' in CPR 40.12 which allows a mistake in an order or judgment to be corrected. The first-instance judge had clearly intended to give the claimants the opportunity to reformulate a claim against the defendants based on facts in the re-amended particulars of claim; the order had failed to give effect to this intention because of the way in which the striking out and amendment appeared in the order. Therefore, the facts in the amended particulars of claim were not considered struck out and the claimants could introduce the new claim as it had arisen out of existing facts in issue in the dispute.
The Court of Appeal decision makes clear two key issues:
Consequently, parties looking to discontinue a claim or defend a strike-out application should carefully consider the implications that a strike out could have on any future claims which they may want to introduce by amendment.
For further information on this topic please contact Geraldine Elliott or Steven Rajavinothan at RPC by telephone (+44 20 3060 6000) or email (email@example.com or firstname.lastname@example.org). The RPC website can be accessed at www.rpc.co.uk.
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