English court sets aside default judgment after service at a closed building during lockdown

England and Wales

How do the Civil Procedure Rules (CPR), designed for an era before widespread electronic communication, respond to a public health emergency that makes it difficult or impossible for many parties to deal with post at their normal address? In Stanley v Tower Hamlets LBC [2020] 1622 EWHC (QB), the Queen’s Bench Division has shown that the courts are able to respond flexibly to an unprecedented situation.

Background

Ms Stanley was in dispute with a local authority about the appropriate remedy for a data protection breach. In February 2020, the local authority’s legal department told Ms Stanley’s solicitor by telephone that the authority would not accept service by email, but that proceedings could be served by post at its offices. On 23 March, the UK Government announced a nationwide lockdown due to COVID-19, and the local authority closed its offices. Nevertheless, on 25 March, Ms Stanley’s solicitor posted the court documents to the office address. Under the Civil Procedure Rules, service was deemed to be effective on 27 March. On 17 April, Ms Stanley obtained judgment in default of acknowledgement of service. The following week, the local authority, still unaware of the proceedings, instructed an external solicitor. She contacted Ms Stanley’s solicitor to indicate that she was instructed to accept service, and was told that judgment had already been entered. The local authority applied to set aside the default judgment.

The Civil Procedure Rules

CPR 13.3 allows (but does not require) the court to set aside default judgment where (i) the defendant has a real prospect of successfully defending the claim, or (ii) there is “some other good reason” why the judgment should be set aside or varied or why the defendant should be allowed to defend the claim. The local authority succeeded on both limbs in this case, but it is the second limb that is of particular interest in the COVID-19 context.

“Good reason”

Knowles J noted that Practice Direction 51ZA, issued to address the challenges caused by COVID-19, required the court to take the impact of the pandemic into account. He characterised the coronavirus pandemic as “an unprecedented national health emergency” which had caused “the world to shift on its axis”. In these circumstances, Ms Stanley’s solicitor should not have relied on an address for service that was provided to him five weeks before lockdown; he knew or should have known that the local authority’s offices were likely to be closed. As a “responsible solicitor” and officer of the court, he should have contacted the local authority again to discuss how to proceed. His failure to do so amounted to a “good reason” for setting the judgment aside. Alternatively, after serving the papers, he should have taken steps to satisfy himself that they had been received and were being processed.

In reaching this conclusion, Knowles J declined to take into account the fact that at the time of service of proceedings, the local authority was late in responding to pre-action correspondence from Ms Stanley in accordance with the provisions of the pre-action protocol; the history was not relevant.

Comment

Many organisations will have had difficulty monitoring postal deliveries during lockdown, and this pragmatic and flexible decision by the court will be welcome. However, parties should not be too quick to assume that the court will be equally lenient in future cases. The court in this case was clearly influenced by the fact that the lockdown was in its early stages when the proceedings were served, meaning that the local authority had not had an opportunity to make alternative arrangements. The court also took into account the fact that Ms Stanley was represented by a solicitor, who had duties to the court. The outcome might have been different if the papers had instead been served towards the end of lockdown or by an unrepresented claimant. Organisations which are able to make arrangements for post to be forwarded or monitored during lockdown should do so. However, those who find themselves in genuine difficulties in this regard can expect some sympathy from the courts.

Conversely, claimants should be pro-active in checking with prospective defendants to ensure that proceedings will be promptly received. Otherwise, while service may technically be valid, any resulting default judgment may be vulnerable to being set aside.