The court should exercise caution in the early stages of a case in striking out the entirety of a claim on the grounds that a part had been improperly or even fraudulently exaggerated. That was because of the draconian effect of so doing and the risk that, at a trial, events might appear less clear cut than they did at an interlocutory stage. The court was not easily affronted, and the emphasis should be on the availability of fair trial of the issues between the parties.

The Court of Appeal so stated when allowing the appeal of the claimant, Alpha Rocks Solicitors, against a decision on 4 November 29014 by Kevin Prosser QC sitting as a deputy judge of the Chancery Division to strike out in their entirety claims for two of the bills presented to its client, the defendant, Benjamin Oluwadare Alade, as an abuse of process.

The claimant firm of solicitors sought to recover their costs and expenses from their client who alleged that the bills were fraudulently exaggerated or misstated and applied under CPR r 3.4(2)(b) to strike them out. The judge found that two of the bills presented to the client were, in the first case, partly false and deliberately exaggerated, and in the second case, brought on the basis of fabricated documents and of a bill of costs that was known to be inaccurate. The judge made the findings under CPR r 3.4(2)(b) and under the inherent jurisdiction of the court, at which no oral evidence was called, on the basis only of written evidence and the documents. The claimant appealed.

VOS LJ said that in both of the main authorities dealing with a strike out of the present kind, the applications to strike out were made after a trial, rather than at an early stage in the proceedings: Masood v Zahoor (Practice Note) [2010] 1 WLR 746 and Summers v Fairclough Homes Ltd [2012] 1 WLR 2004. It was important first to emphasise the range of available remedies when a situation arose in which a party to litigation thought that his opponent had exaggerated his claim, whether fraudulently or otherwise. Establishing fraud without a trial was always difficult. And it was open to a defendant to seek summary judgment on the claim under CPR r 24.2(a)(i), without seeking a strike out for abuse of process. Striking out was available in such cases at an early stage in the proceedings, but only where a claimant was guilty of misconduct in relation to those proceedings which was so serious that it would be an affront to the court to permit him to continue to prosecute the claim, and where the claim should be struck out in order to prevent the further waste of precious resources on proceedings which the claimant had forfeited the right to have determined. The other available remedies for such a default followed the proceedings once they had run their course, but were none the less important. They included costs and interest penalties and proceedings for contempt of court or criminal prosecution.

Returning to the early stages of proceedings, it was, of course, always open to the court to strike out or grant summary judgment in respect of the impugned part of the claim, as opposed to the whole. In his Lordship’s judgment, the court should exercise caution in the early stages of a case in striking out the entirety of a claim on the grounds that a part had been improperly or even fraudulently exaggerated. That was because of the draconian effect of so doing and the risk that, at a trial, events might appear less clear cut than they did at an interlocutory stage. The court was not easily affronted, and in his Lordship’s judgment the emphasis should be on the availability of fair trial of the issues between the parties. As CPR r 3.4(2)(b) itself said, “The court may strike out a statement of case if … the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings”.

The cases were right to emphasise in the context of striking out the need for litigation to be conducted efficiently and at proportionate cost. The need for compliance with rules and orders was equally important. But it had to be remembered that the remedy should be proportionate to the abuse. In the context of the present case, it was also worth emphasising that litigants should not be deprived of their claims unless the abuse relied upon had been clearly established. The court could not be affronted if the case had not been satisfactorily proved. That aspect was obviously inter-related with whether or not a fair trial remained possible. Moreover, the fact that solicitors had signed bills that appeared to be inaccurate or worse was obviously a matter for concern, but that concern did not abrogate the need for the issue of whether the bills were indeed inaccurate to be fairly resolved between the parties, if that remained possible. Applying those principles to the facts the judge had been wrong to strike out the claims.

FULFORD and MOORE-BICK LJJ agreed.