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26 October 2016 | Comment | Article by Richard Locke

The importance of valuing your claim accurately


Court takes a practical approach to amend the value of a claim

A very real issue facing many claimants is ensuring that they bring their claim before expiry of the relevant limitation period because if they miss the deadline then the defendant can have a complete defence to the claim. Another problem is being able accurately to value the claim for the purposes of claiming damages and considering the correct court fee which must be paid when issuing a claim. Placing an accurate value on the claim can often be difficult, particularly if the defendant has been reluctant to provide essential documents in the hope that the claimant will simply “give up” or “run out of time”.

Occasionally, a claimant may need to issue “protective” proceedings in order to avoid missing the limitation deadline. In these circumstances, it is possible for the claimant to discover at a later date that the value of the claim is more than they had previously calculated – in the event that new evidence comes to light. It is also likely that if this occurs, a defendant will resist an attempt at a later date to increase the value of the claim on the basis that this constitutes a “new claim” and is therefore out of time.

This dilemma was faced by the claimant in Glenluce Fishing Co Ltd v Watermota Ltd [2016] EWHC 1807. In this case, the claimant brought a claim for breach of contract for a sum of approximately £69,500 shortly before limitation expired. Three months after the limitation period expired it sought to increase the value of the claim to £162,000 by amending the claim form. The defendant resisted the application to amend on the basis that if the claimant had investigated the claim diligently, the claimant could and should have been in a position to claim £162,000 before the expiry of limitation. As that had not happened, the incorrect fee was paid when the claim was commenced with the consequence that the amendment to introduce a new head of claim should not have been allowed.

The court allowed the claimant to amend the claim. It considered that the fact that the claimant had not paid the court fee on the basis of the sum of £162,000 later claimed did not amount to an abuse of process, and the Court Service would not lose out since the claimant had proposed to pay the appropriate increase in the court fee. Furthermore, the court approached the application along “traditional” lines allowing the amendment because it did not introduce a new cause of action, but only significantly altered heads of claim. The judge also considered it relevant that the defendant had not suffered any prejudice by reason of the fact that the value of the claim stated in the Claim Form was less than in the Particulars of Claim.

The judge commented that from the three often quoted cases of Page v Hewetts Solicitors [2013] EWHC 2845 (Ch), Lewis v Ward Hadaway [2015] EWHC 3503 (Ch), and Bhatti v Asghar [2016] EWHC 1049 (QB), dealing with the question whether a party could lose his rights to bring a claim or to make an application because of an error in the court office, case law had developed a “somewhat hard edged principle”. The way in which those cases had been applied in first instance decisions whereby a claimant whose lawyer miscalculated the fee due, or absentmindedly paid the wrong amount, may cause the claimant to lose his or her right to bring an otherwise meritorious claim to court. The judge felt that the principle, as stated in these cases should not be extended to a case where a claim had been properly “brought” for the purposes of the Limitation Act, but an application to amend a claim form is made.

Comment

This case demonstrates the court taking a fair and practical approach to the issue of whether a party is entitled to amend a claim form out of time. It was of some relevance that the claimant had been completely transparent regarding the fact that it had previously undervalued the claim, and it acted quickly once it realised the original valuation was incorrect. Glenluce confirms that such factors may be relevant to any application to amend and will undermine any arguments put forward by a defendant that they will be prejudiced by any amendments. It will be interesting to see if the decision in this case is followed in subsequent cases, and, if the principle develops in future cases, whether the hard edges as applied in cases such as Page, Lewis and Bhatti will be softened.

Author bio

Richard is a Partner and an elected partner on the firm’s board of management.  He is also Group Head of the ever expanding dispute resolution team at Hugh James. He conducts major commercial disputes frequently with an international flavour including commercial claims, mining disputes, shareholder and partnership disputes, professional negligence claims, contentious IT disputes, injunctive relief and insolvency.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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