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The world shifted on its axis. Lockdown default judgment set aside.

Legal Update by Emily Slocombe (Pupil).

Stanley v London Borough of Tower Hamlets [2020] EWHC 1622 (QB) considers an application to set aside a default judgment which had been entered during lockdown. 

The Claimant was suing the Defendant for breach of the Data Protection Act 1998, breach of GDPR, breach of Article 8 rights and misuse of private information. The Defendant admitted the data breach but made no admissions as to losses suffered.  

Timeline:

04/12/2019

The Claimant protectively issued proceedings.

23/01/2020

A letter before action was sent to the Defendant by post and email.

06/02/2020

A second letter was sent by post and email pointing out that the Defendant was in breach of the pre-action protocol.

13/02/2020

The Claimant’s solicitor called the Defendant’s Legal Services Department and was given the name and contact details of the file handler.

The Claimant’s solicitor asked if the Defendant would accept service by email and was told that service had to be by post.

23/03/2020

The UK went into ‘lockdown’

25/03/2020

The Claimant’s Solicitor put the Particulars of Claim and other relevant documents in the post.

27/03/2020

Deemed date of service.

09/04/2020

Acknowledgement of service due.

The Claimant’s Solicitor applied for default judgment on 15/04/2020 when no acknowledgement of service had been received. This was granted on 17/04/2020. 

The Defendant made an application to set aside the default judgment.   

CPR 13.2 provides when the court must set aside default judgment, 13.2 did not apply to this case. Therefore, CPR 13.3 was considered. 

CPR 13.3:

“(1) In any other case, the court may set aside or vary a judgment entered under Part 12 if –

(a) the defendant has a real prospect of successfully defending the claim; or

(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.

(2) In considering whether to set aside or vary a judgment entered under Part 12, the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to do so promptly.”

The Defendant’s application was that CPR 13.3(1) and/or 13.3(2) were fulfilled. 

As to the first limb, the Defendant submitted that there was no evidence that the breach was causative of any loss as no medical evidence had been disclosed with the Particulars of Claim as required by CPR PD 16 paragraph 4.3. 

The Defendant’s submissions as to the second limb was that the Claimant’s Solicitor served papers on an office that they knew would be closed and this is contrary to the overriding objective. 

As the Defendant failed to acknowledge service, they also made an application for relief from sanctions. It was conceded that there was a serious and significant breach, under the Denton test, but it was submitted that the overall circumstances called for granting relief. 

The Claimant’s submissions were that the Defendant should have put a system in place so that proceedings were dealt with timeously, and the Claimant’s solicitor was only acting in line with what the Defendant had told them to do. Furthermore, the Defendant did not have a realistic prospect of defending the claim as they had admitted breach of duty. 

It was held that the Defendant had realistic prospects of successfully defending the claim, as there had not been any medical evidence disclosed and therefore, the Claimant could not prove the claim. 

Even if there had not been realistic prospects of successfully defending the claim, Mr Justice Julian Knowles said the application to set aside the default judgment would have succeeded on the basis that there was a good reason to set it aside. 

The reason for this is because the Claimant’s solicitor did not contact the Defendant to discuss how proceedings should best be served when he knew or ought to have known that the Defendant’s offices would have been closed. 

The application for relief from sanctions was also allowed having regard to the CPR PD 51ZA which was implemented due to coronavirus. This provides:

“4. In so far as compatible with the proper administration of justice, the court will take into account the impact of the Covid19 pandemic when considering applications for the extension of time for compliance with directions, the adjournment of hearings, and applications for relief from sanctions.” 

Mr Justice Julian Knowle found that the reason for the Defendant’s default was the coronavirus crisis. This is despite the Defendant previously failing to respond to the pre-action correspondence. 

It is interesting that despite the Claimant’s Solicitor expressly being told that service must be by post and this is what was done, the court still felt that the Claimant’s Solicitors actions were not reasonable. This highlights that the court was aware of the difficulties that coronavirus posed to parties and that a pragmatic approach was required.

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