High Court Emphasises The Importance Of Letters Before Action

In the recent High Court case of Zambia -v- Meer Care

& Desai (a firm) & Ors1 a judgment

entered against a defendant for offences related to fraud and

corruption was set aside partly as a result of the failure of

the Claimant to send a letter before action.

The Republic of Zambia brought proceedings in October 2004

against 16 defendants in order to recover sums said to be the

proceeds of fraud and corruption. One of the defendants, Mr

Basile, was a Swiss resident and had already given evidence and

provided invoices to the Swiss authorities in relation to sums

he had received from the Zambian government.

A central allegation of the English High Court claim was

that the sums Mr Basile had received from the government of

Zambia exceeded the value of the invoices he had produced. It

was therefore alleged that Mr Basile was liable to pay back

those sums as the proceeds of fraud and corruption. However,

crucially no letter before action was ever sent to Mr Basile

explaining the case against him or offering him the opportunity

to explain this shortfall.

Mr Basile was served with a copy of the claim form and

response pack plus three lever arch files containing the

Particulars of Claim and annexes. Other documents and

correspondence were also served on Mr Basile through the course

of the High Court proceedings. Mr Basile never acknowledged

service of the proceedings and did not attend trial. He did not

take any step in respect of the proceedings.

Judgment was accordingly entered against Mr Basile and he

was served with the trial judge's orders. It was only at

this point that he sought legal advice and subsequently applied

for an extension of time to appeal as well as permission to

adduce additional evidence under CPR 52.11(2). Mr Basile

claimed that until the orders had been served on him he had not

realised he was a defendant in the case and had thought he was

a witness only.

The Court of Appeal approached Mr Basile's application

by first considering whether under CPR 39.3(5) there were

sufficient grounds to set aside the judgment against him. The

Court found in Mr Basile's favour, holding that there were

grounds to set aside the judgment on a limited basis and for

the case against Mr Basile to be reconsidered.

A key factor that led the Court of Appeal to decide in Mr

Basile's favour was that, in contravention of paragraph 4

of the CPR Practice Direction - Protocols, the

Claimants' former solicitors had failed to send a letter

before action. The...

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