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01 March 2016
The decision in Medhi Khosravi v British American Tobacco plc ( 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.
Under Civil Procedure Rule 7.5, where the claim form is to be served within the 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.
The claim in this case was for "hundreds of millions of pounds" and concerned the alleged kidnapping 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 farfetched and called 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 January 10 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 September 8 2015 (20 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 dismissal of the claim.
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 Civil Procedure 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 a lack of funding and 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 18 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.
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.
The decision is a warning to claimants that do not take seriously the obligation to serve claims which have been issued within the four-month period laid down in Civil Procedure Rule 7.5. If a claim is not served in time, it may need to be reissued, 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.
The judge also commented that where a claimant's difficulties in serving the claim in time could be regarded as attributable to wrongdoing by a defendant (eg, 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 the position in this case.
For further information on this topic please contact Geraldine Elliott or Alan Williams 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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