Factual and Procedural Background
On 12 September 2017, the Plaintiff was involved in a road traffic accident on the M20 motorway when a lorry with a Polish registration, driven by an individual insured by Defendant Company A, collided with her vehicle. The Plaintiff's solicitors initially advanced a personal injury claim against Defendant Company B, the UK claims handler, but later sought to substitute Defendant Company A, the Polish insurer, as the defendant. The claim was based on a direct right of action against the insurer arising under the Third Party (Rights Against Insurers) Act 2010 and related European regulations.
The claim form was filed in September 2020, with particulars of claim served in January 2021. Defendant Company B denied being the insurer and sought to strike out the claim, arguing that the direct claim against Defendant Company A under the 2002 Regulations was not applicable due to the vehicle's Polish registration. The Plaintiff sought to amend the claim to substitute Defendant Company A as the defendant, which was granted by Deputy District Judge (DDJ) Murphy in April 2021.
Subsequently, Defendant Company A applied to strike out the claim on grounds that the claim form was defective, particularly concerning the legal basis for the direct claim against the Polish insurer. At a hearing before Deputy District Judge Pithouse, the claim was struck out due to insufficient pleading to support a direct claim against Defendant Company A. The Plaintiff was granted permission to appeal that decision.
During the appeal, the Plaintiff issued a further application to amend the particulars of claim to identify a specific provision of Polish law supporting the direct claim. The appeal was heard by His Honour Judge Parker, who set aside the DDJ’s strike out order.
Legal Issues Presented
- Whether the claimant’s pleading was defective in failing to properly identify a direct cause of action against the Polish insurer and if such defect could be cured by amendment.
- Whether the limitation period under the Limitation Act 1980 barred the claimant from amending the pleading to rely on a new legal basis arising from foreign law.
- Whether the Deputy District Judge erred in striking out the claim without considering the proportionality of such a sanction and the possibility of an unless order.
- Whether the appellate court should interfere with the Deputy District Judge’s exercise of discretion in striking out the claim.
Arguments of the Parties
Plaintiff's Arguments
- The defect in the pleading could be cured by amendment to properly articulate a direct cause of action against the Polish insurer under Article 18 of Council Regulation (EC) No 864/2007 (Rome II) and Article 18 of the Sixth Motor Insurance Directive.
- The relevant Polish law likely permits direct claims against insurers, and this legal basis should be accepted as arguable and capable of amendment.
- The court should refrain from striking out the claim without first allowing an opportunity to amend, possibly subject to an unless order to avoid undue delay.
- The limitation period should not bar amendment as the new cause of action arises out of the same or substantially the same facts as the original claim.
Defendant Company A's Arguments
- The claim form was defective because it failed to identify the specific provision of Polish law relied upon, and foreign law is a matter of fact that must be pleaded and proven.
- The Plaintiff was statute barred from amending the claim due to the Limitation Act 1980, as any amendment after limitation must arise from the same or substantially the same facts, which was not satisfied here given the foreign law issue.
- The claim should be struck out as the 2002 Regulations did not apply and no valid direct cause of action against Defendant Company A existed.
- The Plaintiff’s solicitors’ failure to properly plead the claim and delay justified striking out the claim without an opportunity to amend.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Soo Kim v Youg [2011] EWHC 1781 (QB) |
Courts should generally allow a party an opportunity to amend defective pleadings before striking out. |
The Judge cited this to support the principle that striking out should be a last resort if the defect can be remedied. |
| Park v Kim [2011] EWHC 1781 (QB) |
Similar to Soo Kim v Youg; emphasis on allowing amendment where defect is curable. |
Referred to in the appeal judgment to reinforce the approach to defective pleadings. |
| Carroll v Chief Constable of Greater Manchester Police [2017] EWCA Civ 1992 |
Sets out principles for appellate interference with discretionary decisions, requiring error of principle or unreasonable exercise of discretion. |
The appellate court applied this to review the Deputy District Judge’s discretion and found errors of principle. |
| Kawasaki Kisen Kaisha Ltd v James Kemball Ltd [2021] EWCA Civ 33 |
Defines the merits test for striking out pleadings and for amendment as having a real prospect of success. |
The court applied this to determine that the claim against Defendant Company A had at least a real prospect of success and was not fanciful. |
| Mulalley v Martlet Homes Ltd [2022] EWCA Civ 32 |
Clarifies that a claim can arise out of the same or substantially the same facts even if it depends on a new fact. |
The court used this to support the view that the amendment relying on foreign law did not offend limitation rules. |
| Bumper Development Corporation v Commissioner of Police for the Metropolis [1991] 1 WLR 1362 |
Foreign law is a question of fact but treated differently from other factual questions in pleading and proof. |
Referenced to explain the nature of foreign law as fact and its implications for pleading and amendment. |
| Goode v Martin [2001] 3 All ER 562 |
Discusses limitation and amendment where new legal bases arise from substantially the same facts. |
Applied to support that the amendment to rely on Polish law did not constitute a new cause of action for limitation purposes. |
Court's Reasoning and Analysis
The court carefully analyzed whether the defect in the Plaintiff’s pleading—failing to properly articulate the legal basis for a direct claim against the Polish insurer—could be cured by amendment. It accepted that while the initial pleadings relied incorrectly on the 2002 Regulations, there was a real prospect that the defect could be remedied by referencing the correct legal basis under Article 18 of Rome II and the Sixth Motor Insurance Directive, supported by Polish law (specifically Article 822(4) of the Polish Civil Code).
The court found the Deputy District Judge erred in doubting the ability to properly plead a claim against Defendant Company A. The failure to identify the specific Polish legal provision at the strike out stage was considered a technical defect that could be rectified and was not critical to the arguability of the claim. Moreover, the Defendant had not challenged the assertion regarding Polish law, which was known to it as a Polish insurer, and had admitted liability in pre-action correspondence, indicating no substantive dispute as to the insurer’s liability.
The court also addressed the limitation argument, concluding obiter that the amendment would likely not be barred under the Limitation Act 1980 because the new cause of action arose out of the same or substantially the same facts as the original claim. It emphasized that foreign law is a question of fact but treated differently in this context and that no new factual investigation would be required from the Defendant.
The court criticized the Deputy District Judge for failing to consider the proportionality of striking out the claim and the possibility of making an unless order to allow amendment within a limited time. It further noted the Deputy District Judge did not properly weigh the balance of prejudice between the parties: striking out would deprive the Plaintiff of a likely valid claim with limited dispute on liability and modest damages, while the Defendant would suffer no prejudice from allowing amendment.
Overall, the court concluded that striking out was a disproportionate sanction and outside the reasonable scope of the Deputy District Judge’s discretion. The appellate court was entitled to interfere and substitute its own evaluative assessment, setting aside the strike out order.
Holding and Implications
The appeal is DISMISSED, meaning the appellate court upheld the decision of His Honour Judge Parker to set aside the Deputy District Judge’s strike out order.
The direct consequence is that the Plaintiff’s claim against Defendant Company A is allowed to proceed, subject to the Plaintiff amending the particulars of claim to properly plead the direct cause of action based on Polish law and the relevant EU regulations. The Defendant will have the opportunity to contest limitation and other issues at the appropriate stage.
No new precedent was established; the decision reaffirms established principles on the treatment of defective pleadings, the exercise of discretion on strike out applications, and the approach to foreign law and limitation in the context of amendments.