Case update on whether an underpayment of issue fee may mean proceedings not "brought" for limitation purposes

1. Legal Updates from Eversheds’
Lawyer Development Team
B-Brief
Underpayment of issue fee may mean proceedings
not “brought” for limitation purposes
Bhatti and another v Asghar and another
[2016] EWHC 1049 (QB)
27 May 2016
Press To

2. Eversheds LLP | 01/06/2016 |
• Claimants alleged that defendants had invited them to invest
in property in Dubai
• Payments were made to the first defendant with final
payment in 2009 but property purchase never took place
• Claimants sued for breach of trust or contract, claiming they
were induced to make payments through fraudulent, reckless
or negligent misrepresentation
• Prayer listed value of C1’s claim at £150,000 and C2’s claim
at £1 million – both plus “further [unquanitifed] relief”
• Issue fee paid on basis only of liquidated damages sought
• Defendants did not raise any limitation defence but applied
for summary judgment on grounds that claimants had not
paid the correct court fee with result that action had not been
properly brought and limitation period had expired
Background
Legal Updates from Eversheds’ Lawyer Development Team

3. Eversheds LLP | 01/06/2016 |
• Limitation Act 1980, section 5:
−“An action shall not be brought after the expiration of six years from the date on
which the cause of action accrued”
• CPR 7.2:
−Proceedings are started when the court issues a claim form at the request of the
claimant – no alternative provision for part 8
−Proceedings treated as having being “brought” for purposes of Limitation Act 1980
where claim form as issued is received in the court office earlier than the date on
which it was issued (para 5.1, PD 7a)
• Regime for payment of court fees originally established by Civil
Proceedings Fees Order 2008 (as subsequently amended)
−Payment for commencement of money claim by value – currently up to £10,000
−Additional claim for commencement of claim for “other remedy” – currently £480
• It is an abuse of process to understate the value of a claim for
the purpose of paying a lower court fee
−See Richard Lewis v Ward Hadaway (a firm) [2015] EWHC 3503 (Ch)
• Key question for limitation purposes is whether claimant has
done all that they reasonably could do to bring the matter
before the court
−This includes calculation and payment of the correct court fee
−Page v Hewetts Solicitors [2012] EWCA Civ 805
Legal background
Legal Updates from Eversheds’ Lawyer Development Team

4. Eversheds LLP | 01/06/2016 |
• Court found that claimants had underpaid amount of fees due on
issue and that the claims in contract were out of time
• But refused to grant summary judgment because the limitation
period was not pleaded, and in any event applied only to the
claims in contract
• Claimants presented a blank cheque and asked for assistance of
court in calculating the fee – where payment of wrong fee on
basis of court error should risk fall on claimant or defendant?
• “…a claim is only brought for [the purposes of limitation] when
the party concerned has done all that is in his power to set the
wheels of justice in motion…”
• Whether claimants had done that was issue for trial, as was their
argument that the did not discover the defendant’s wrongdoing
until some time after it was committed (relevant to limitation
period)
• Defendant directed to plead limitation defence
The Court’s decision
Legal Updates from Eversheds’ Lawyer Development Team

5. Eversheds LLP | 01/06/2016 |
• Decision highlights important considerations for claimants when
assessing the amount of the court fee payable on issuing the
claim form, particularly where limitation is close to expiry
• Court will take a strict approach to the question of whether the
claimant has done everything in its power to set the proceedings
in motion for purposes of limitation – this includes payment of
the correct fee
• Claimants must correctly determine the amount claimed, in
particular whether any claim for unliquidated damages may
require a higher fee to be paid
• The case differs from Lewis v Ward Hadaway as no suggestion
that the court fee was underpaid as a deliberate tactic
• But question as to who bears the risk of a court error in
calculating fee remains open
• Always check the fee payable and if in doubt, pay the fee
associated with the higher bracket, particularly where
limitation is in issue
Learning points
Legal Updates from Eversheds’ Lawyer Development Team

6. WARNING
1. For the purpose of abbreviation and presentation, only
the main aspects of the case have been mentioned
2. This information is for guidance only and should not be
regarded as a substitute for research or taking legal
advice
3. ANOTHER CASE UPDATE FROM EVERSHEDS
Bhatti and another v Asghar and another [2016] EWHC
1049 (QB)
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