TT Talk - Legal eagle: considering procedural delays
It may be frustrating where proceedings are commenced but not followed-through in a reasonable time-frame. English law articulates three requirements before a claim may be struck out and this judgment clarifies that all three must be satisfied.
A shipping line carried a shipment of bananas in 28 containers from Ecuador and Honduras to Albania. On arrival the bananas were found to be damaged and the consignee issued proceedings in England against the line based on delay and an alleged failure to maintain correct temperatures. Four years and seven months later the claimant still had not applied for a Case Management Conference, which should under the Civil Procedure Rules (CPR) have been done within 14 days.
The line defendant made an application to strike out the claim, asserting that the three relevant requirements under the CPR were satisfied:
- the delay was inordinate;
- there was a total disregard of court process; and
- a fair trial had been prejudiced.
The line further alleged that the claimant was "warehousing" the claim until it was convenient to proceed with it.
The claimant resisted on grounds of proportionality, in particular that strike out would deprive it of the right to pursue a prima facie legitimate claim. Additionally, it argued the court had a broad discretion, and there were other more appropriate sanctions.
The court found that the delay was inordinate, not satisfactorily explained and had increased costs. But there was insufficient evidence that it had prevented a fair trial. Specifically, the necessary documents had already been collated and the argument would not be greatly dependent on witness evidence. The court was not satisfied on the facts that the claimant had acted intentionally in warehousing the claim as alleged by the line.
The court therefore ruled that it was not proportionate to strike out the claim. The appropriate sanction was payment of security for costs in the sum of GBP100,000.
This case makes it clear that under English law all three of the CPR requirements mentioned above, including prejudice of a fair trial, must be satisfied to justify strike out in these circumstances. It also emphasises that strike out must be proportionate. This was distinguished from an application for relief from a sanction, where the only issue is whether the sanction was properly imposed.
It is noted that US Courts take a similar approach to strike out applications, referred to as 'motions to dismiss for lack of prosecution'. Federal Courts have the inherent power outside of the rules of civil procedure to evaluate whether an alternative sanction would be more appropriate to achieve the orderly and expeditious disposition of cases. State courts broadly follow the same approach, albeit that there may be specific rules applicable.
Alba Exotic Fruit SH PK v MSC Mediterranean Shipping Co SA
 EWHC Comm 1779
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Risk Management Director, TT Club
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