English Court Of Appeal Rules Solicitor Is Under No Duty To Alert Opponents Of Mistake Of Their Own Making

The Court of Appeal recently handed down its decision in the case of Woodward & another v Phoenix Healthcare Distribution Ltd [2019] EWCA Civ 985. This is the latest in a string of cases in which a party has sought an order to validate service retrospectively under CPR r 6.15 and which looks at the circumstances in which it is appropriate for a solicitor to stay silent in the event that an opponent makes a mistake.

The Court of Appeal confirmed that there is no duty to warn an opponent of a mistake of their own making but, as each case turns on its facts, suggested that there would or may be a duty to speak out where a party's own conduct has contributed to an opponent's misunderstanding on a significant matter. In doing so, the Court affirmed the decision of HHJ Hodge QC, sitting as a High Court Judge, that the Master at first instance had erred when concluding that service ought be retrospectively validated under CPR r 6.15, affirming the majority view of the Supreme Court in Barton v Wright Hassall [2018] UKSC 12. The judgment also serves to underline the risk, once again, of a party choosing to issue and serve proceedings at the very end of the limitation period.

Background

The Appellants, Sally Woodward and Mark Addison, sought to bring proceedings against the Respondent, Phoenix Healthcare Distribution Limited, alleging causes of action in breach of contract and in misrepresentation. The claim was alleged to be worth around £5m and arose out of a contract dated 20 June 2011 in which Phoenix entered into an agreement with a third party for the purchase of a drug. It was alleged that the drug was still under patent and that Phoenix negligently or fraudulently misrepresented when negotiating that the drug was no longer under patent and was available for sale. It was also alleged that Phoenix was in breach of contract in selling the drug when, in fact, it had no right to do so.

The causes of action accrued from the date of the contract and therefore the claim was potentially time barred from 20 June 2017. The claim form was issued on 19 June 2017 and the Respondent's solicitors were notified of this. On 27 July 2017, the Appellants' solicitors wrote to the Respondent's solicitors stating that they had "not yet served this claim on you in order that the parties can sensibly proceed on a pre-action basis such that good faith efforts are made to reach appropriate settlement". At no point did the Appellants' solicitors ask for confirmation that the Respondent's solicitors were authorised to accept service. On 30 August...