The court also noted the ‘most disturbing’ fact that ‘the costs expended on this satellite litigation… stand at a little less than £50,000 in relation to just one defendant to a claim worth only £5,000.’ It ordered that the appellant’s solicitors, not the client, foot the bill for costs incurred ‘in this court or in the County Court at either level’.
Delivering its judgment in Cowley v LW Carlisle [2020] EWCA Civ 227, the court described as ‘misguided’ the commencement of proceedings against LW Carlisle when it was known the company had been dissolved and without taking prompt steps towards restoring it to the register.
Patrick McBrien, DWF director and solicitor for the respondent, said: ‘It is pleasing that the Court of Appeal upheld the decision of a District Judge and then a Circuit Judge to strike out this deafness claim brought against a dissolved defendant, the claimant having failed to take the fundamental step of restoring the former company to the register before starting the litigation.
‘The Court held that irrespective of issues of jurisdiction arising out of CPR 11, the District Judge had a freestanding right to strike the claim out on grounds of abuse of process and as part of his case management powers. The Court of Appeal held that strike out was a reasonable exercise of the DJ's discretion in the circumstances of this case.
‘The judgment expressly recognises that insurers and those with a potential financial interest are placed in a difficult position procedurally when claims are brought against former policyholders who are now dissolved. The judgment is likely to be welcomed by the market, as discouraging such claims.
‘The judgment also serves as a warning to claimant solicitors in relation to costs as the Court of Appeal has clearly indicated that it will be the claimant’s solicitors (not the claimant) who will have to bear the costs of the initial strike out application and the two appeals.’
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