Cadwallader: Reed Smith under “no duty to explain their reasoning”
Solicitors in a dispute over service did not have to explain to their opposite numbers why they believed they were not out of time, the High Court has ruled.
His Honour Judge Cadwallader, sitting as a High Court judge, held that the solicitors were correct and, in any case, were “not required” to help their counterparts, who had got the law wrong.
The underlying matter is a claim for breach of directors’ duties and, on 18 April 2024, Reed Smith, for the claimants, emailed the defendants’ solicitors, Spencer West, seeking agreement that service of particulars of claim by email would be accepted.
Spencer West said it could not respond because the claimants were out of time. The claimants filed and served the particulars on Spencer West by conventional means on the same day.
Reed Smith emailed to say it disagreed that the particulars were out of time and asked why Spencer West said so.
Spencer West’s response was that, as the claim form had been served on 15 March, the 14-day period for serving the particulars of claim ended on 29 March.
Spencer West wrote again five days later, saying: “Could you please let me have a response to my email of 08/05/24 explaining our understanding of the position on service of your particulars of claim? This needs to be resolved as a matter of urgency.”
Reed Smith responded: “We do not understand what response you are seeking, not least since your email of 8 May 2024 did not ask any questions or otherwise call for a response.
“Indeed, your email of 8 May 2024 ended with the statement that ‘[w]e trust that the position is now clear to you’. If that is the response that you are seeking, we confirm that your position is indeed now clear to us.”
Spencer West’s reply to this described Reed Smith’s comments as “clearly not intended to be helpful and certainly not commensurate with the purposes of conducting litigation in the expected manner”. It demanded that Reed Smith explain why it did not believe service was out of time.
No defence was served and the claimants successfully applied, without notice, for judgment in default.
In applying to set this aside, the claimants explicitly accepted that the defence disclosed a real prospect of successfully defending the claim.
Applying the Denton test, HHJ Cadwallader said there was no good reason for the breach, finding the solicitor at Spencer West “was wrong in thinking the particulars of claim had not been served in time”.
“His error appears to have been a failure to appreciate that different time limits applied in the London Circuit Commercial Court. That information was available to him in a number of forms, however, including the Civil Procedure Rules themselves, and the notes in the White Book.
“His correspondence does not initially evince a wish to establish that the particulars of claim had not been served in time, but a desire to assert it. He was told that Reed Smith disagreed, and he had been told the date they said the defence was due. He did not seek an extension.”
The judge said Reed Smith was under “no duty to explain their reasoning”. While parties were required “to help the court” further the overriding objective, “they are not required to help each other”.
The defendants’ argument that Reed Smith acted unreasonably in not responding to a legitimate request for an explanation would “re-introduce a duty by the back door”.
He went on: “Certainly, the request was legitimate. But it was not unreasonable not to respond to it. Nor did they encourage him in his error, or do anything to mislead him into thinking that they agreed, whether expressly or by silence.
“That being the case, it is just as wrong to describe them as having played procedural games.”
At the same time, HHJ Cadwallader rejected the defendants’ contention it was improper to obtain the default judgment without notice.
But, in the circumstances, he concluded that judgment ought to be set aside, saying “nothing else would serve the interests of justice and the overriding objective”.
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