When can a claim be dismissed by the courts as an ‘abuse of process’?

As many readers may well be aware, it is possible for the courts to dismiss a claim at a preliminary stage if that claim is so speculative as to be an ‘abuse of process’. The benefit to a defendant of having a claim against it dealt with finally and summarily at an initial stage of the proceedings does not need to be amplified; an early knock-out blow is self-evidently a good thing.

However, readers will probably not be too surprised to learn that the courts do not take such action lightly, as shown in the recent case of USAF Nominee No 18 Limited v. Watkin Jones & Son Limited [2021], heard in the Technology and Construction Court (TCC). In this case the TCC demonstrated again just how hard it is to have a claim struck out as an abuse of process.

The facts

Here the defendant (Watkin Jones) had been engaged by the claimant company (USAF) to design and build a block of student flats in 2009. Following the Grenfell Tower disaster in 2017; USAF investigated the condition and fire safety of its property. Just before the 12-year limitation period expired, the passing of which would have prevented USAF bringing a claim for breach of contract or negligence, USAF issued protective proceedings against Watkin Jones alleging breach of contract and/or breach of statutory duty and/or negligence in respect of fire safety and other alleged defects in relation to the block of flats.

However, the claim was not fully particularised and the claimant applied to the courts for a 12-month stay of proceedings, pending completion of the TCC pre-action protocol.

In response to this, Watkin Jones made an application for the proceedings to be struck out, relying on the principle set out in the case of Nomura International Plc v Granada Group Ltd [2007] (Nomura). Nomura established that it is an abuse of process where, at the time of issue, the claimant did not have a claim that it intended to pursue and had failed to specify the failings and deficiencies for which it said that the defendant was responsible.

In contrast, USAF drew a distinction between a claimant merely not being able to articulate its claim, and not being able to particularise that claim at the time of issue. USAF argued that it would not be an abuse of process where a party was simply unable to properly articulate its claim.

The decision

Held, the TCC agreed with USAF: the application for strike out was refused and a stay of proceedings was granted until February 2022.

In reaching this decision the TCC acknowledged that where proceedings were speculative, without a known basis for the claim, those proceedings would be struck out for being an abuse of process. However, the principles laid down in Nomura were fact-sensitive and should not be regarded as statute.

In deciding for USAF the TCC pointed out that an application to strike out would be successful if a claimant had started proceedings that it did not intend to pursue and which had simply been commenced to forestall the limitation period in the hope that evidence would turn up to allow it to substantiate its claim. The key question was whether, at the time of issuing the claim form, the claimant was in a position properly to identify the essence of the act or omission complained of. On the facts, it was clear to the TCC that USAF was actively engaged in preparing its case and evidence, further believing that it had a genuine claim to bring. As such, USAF could not be criticised for not being in possession of all the facts necessary to plead its case adequately at this stage.

Conclusion 

In conclusion, this judgment reiterates that proceedings issued to preserve a claim from being statute barred will likely not be an abuse of process provided the claimant believes that it has a case which it is intending to advance. The facts, such as to whether the conduct of the claimant is such as to lead an observer to conclude that there is a case to bring, are all-important. Unless the issuing of proceedings is something of a ‘fishing expedition’ with a view to acquiring information to create a claim, the courts are unlikely to strike out claims for being poorly particularised or not fully articulated.

Whilst this decision will no doubt provide comfort that the courts will not simply dismiss claims for a lack of detail, readers are nonetheless advised to prepare cases as early as practicable and to issue proceedings well before the limitation period expires to avoid applications to strike out entirely.