JUDGMENT SET ASIDE WHEN DEFAULT WAS OBTAINED BECAUSE OF “LOCKDOWN”: LITIGATORS MUST BE AWARE THAT THE WORLD SHIFTED ON ITS AXIS ON 23 MARCH 2020

The judgment of Mr Justice Julian Knowles in  Stanley v London Borough of Tower Hamlets [2020] EWHC 1622 (QB) is the first reference I have seen to that part of CPR PD51ZA that deals  the court’s general discretion when faced with procedural default caused by COVID and the lockdown.  The judgment sets out clearly that the courts are aware of the practical difficulties caused by coronavirus and expects litigants, and litigators, to act accordingly.

“The world shifted on its axis on 23 March 2020 and it was incumbent on him as a responsible solicitor and an officer of the court to contact the Council to acknowledge that the situation had changed, and to discuss how proceedings could best and most effectively be served”

“It would be unconscionable in my view for the Claimant to benefit from the unprecedented health emergency which prevailed at the end of March (and which is still subsisting today).”

KEY POINTS

There are important lessons here for claimants and defendants. The problems caused by COVID were, and remain, a reality and the courts are aware of the realities.

• The claimant’s solicitor should have checked as to the appropriate means of service prior to serving in March 2020 after “lockdown”.
• It is important that a defendant, when notified of a problem, responds with speed and diligence.

THE CASE

The claimant is bringing an action for breach of the GDPR and Article 8 rights,   and misuse of private information. Proceedings were issued in December 2019.  They were placed in the post to the defendant Council on the 25th March.  No acknowledgement of service was received and judgment was entered in default on the 17th April.

THE REASON JUDGMENT WAS ENTERED IN DEFAULT

The judge considered the reason that the default judgment was obtained.

1. At this point it is necessary to recall what was happening around the time Mr McConville served the papers on the Council. On 23 March 2020 the UK Government put the country into ‘lockdown’ because of the COVID-19 pandemic. On that day the Prime Minister said that people were going to be required to stay at home and work at home. Emergency legislation (Coronavirus Act 2020) was passed by the House of Commons without a vote that same day, and became law on 25 March 2020. There followed a raft of emergency secondary legislation which required all but essential businesses to close and severely restricted the ability of people to go to work and to travel. All but essential workers were required, by law, to stay at home. There were only limited exceptions, such as for exercise and the purchase of essential items. It was a criminal offence to be outside if an exception did not apply. Social distancing of 2m had to be observed, apart from in respect of people living in the same household.

2. The coronavirus pandemic is generally recognised to be the greatest peacetime emergency that this country (and indeed, the world) has ever faced. It has already caused the biggest shrinkage in the UK’s economy on record, and its effects are likely to be felt for generations to come. That is on top of the deaths of over 42,000 people in the UK from the virus (as of 18 June 2020). The history of this crisis has yet to be written, but its effects have been all too palpable for every woman, child and man in the UK, and in many other countries too.

3. Ms McDougall says that the Council shut its offices on 23 March 2020 in accordance with the lockdown, with staff working from home after that. She also worked from home and she says that she assumes the Claimant’s solicitor did also. She says that a ‘skeleton staff’ are working at the Council’s offices, but they are not familiar with court proceedings. She says that as far as she is aware the relevant legal team within the Council’s legal services department has not received the papers which were sent by Mr McConville.

4. Ms McDougall says it was unreasonable for Mr McConville to effect service by post when he knew that the Council’s offices were shut. She says that he should have made contact by phone or otherwise to ascertain how to effect service ‘in these unfortunate and unprecedented times’.

5. Ms McDougall makes clear in her witness statement that the Council intends to defend the claim. She points out there is no medical evidence and no schedule of special damages, and that this is a breach of CPR Part 16 PD, [4.2]-[4.3]. She says that the Claimant has not shown that the information in her GP records was not already known to the recipients, and if that is the case, there has been no breach in the various ways that are pleaded.

THE DEFENDANT’S APPLICATION TO SET ASIDE DEFAULT JUDGMENT

The judge considered the relevant test.  He held that the Council had established a prima facie case of defending the claim. The judge then had to go on to consider the Denton criteria.

GOOD REASON TO SET ASIDE THE DEFAULT JUDGMENT

The judge held that the second limb of CPR 13.3(1) was also made out that rule provides that a default judgment can be set aside if

“(b) it appears to the court that there is some other good reason why –

(i) the judgment should be set aside or varied; or

(ii) the defendant should be allowed to defend the claim.”

THE JUDGMENT ON THIS ISSUE

1. I turn to the second limb. Even if I wrong about my earlier conclusion, I am satisfied that there is a good reason to set aside the default judgment. That reason is the unprecedented national health emergency which was unfolding at precisely the time Mr McConville posted his documents to the Council. From 23 March 2020 onwards the country was grinding to a halt and every employer and business in the UK – and indeed across the world – was suddenly having to develop new ways of working and to find ways of coping with employees not being able to travel into work. There were myriad problems and challenges to be faced, including, for example, establishing technological links and putting in place new systems of working. Parents had to worry about children no longer being able to go to school and all the associated child care issues related to that. Emergency plans were having to be implemented and rapid adjustments made across all sectors of the economy.

2. Mr McConville’s witness statement is entirely silent as to why he thought it appropriate to post documents to the Council’s offices when he knew or should have known they were shut and the Council was highly unlikely to be in a position to respond. I take Mr Suterwalla’s point that the Council had not exactly covered itself in glory with how it had dealt with (or rather, not dealt with) the pre-action correspondence. Its non-responsiveness was not acceptable and I do not excuse it. However, that was history by the time of lockdown. Mr McConville took no steps to ascertain whether the papers had been received and were being processed. It is not good enough for him to say, as he does, that was because he was told in mid-February 2020 (some five weeks or so before lockdown) that service had to be by post, and so that is what he did. The world shifted on its axis on 23 March 2020 and it was incumbent on him as a responsible solicitor and an officer of the court to contact the Council to acknowledge that the situation had changed, and to discuss how proceedings could best and most effectively be served. In her witness statement Ms McDougall accused Mr McConville of ‘sharp practice’. I do not find that he unscrupulously took advantage of the situation, but I do find he exercised poor judgement. A moment’s thought on his part would have shown that it was not fair or reasonable for him simply to place papers in the post to an office that he knew or should have known had been closed down two days before because of a national emergency.

THE DENTON CRITERIA

Finally the judge considered the Denton criteria.   Judgment would be set aside, particularly bearing in mind the provisions of PS 51ZA.

1. 1. I turn to the three stage Mitchell/Denton test. As I have said, Mr Cohen accepted that there had been a serious and significant default by the Council in its failure to serve an Acknowledgement of Service and a Defence. I agree. However, I accept that the circumstances which led to the default were unique and that overall I should grant relief from sanctions having regard to the second and third stages of the test and the criteria in CPR r 3.9. Here, I am bound to have regard to CPR PD 51ZA (Extension of time limits and clarification of Practice Direction 51Y – coronavirus), which provides at [4]:

“4. In so far as compatible with the proper administration of justice, the court will take into account the impact of the Covid-19 pandemic when considering applications for the extension of time for compliance with directions, the adjournment of hearings, and applications for relief from sanctions.”

1. I find that the reason for the Council’s default was the COVID-19 crisis, and that, but for the Council’s offices being shut, it would have responded in time to the Claimant’s claim. Whilst, as I have said, the Council had shown something of a cavalier attitude prior to the issuing of proceedings, I am satisfied it would have acted in accordance with the rules once proceedings had actually been issued. Another relevant circumstance is that Mr McConville was at fault for not checking whether service by post was still possible and feasible. That was an obvious step which he should have taken. The Council moved promptly to instruct Ms McDougall once it became cognisant of the Claimant’s claim and this application to set aside default judgment was made promptly thereafter. I fully recognise the need to enforce compliance with the rules and the need to conduct litigation at proportionate cost. However, overall, I am satisfied that the interests of justice require judgment in default to be set aside. It would be unconscionable in my view for the Claimant to benefit from the unprecedented health emergency which prevailed at the end of March (and which is still subsisting today).

2. I therefore set aside the judgment in default, grant relief from sanctions, and give permission to the Council to file and serve an Acknowledgment of Service and Defence. That must be done within 14 days of the date of the order giving effect to this judgment.