The High Court set aside a default judgment against Casey & Company Solicitors in a negligence action brought by six customs officials, but limited the defence on liability to a dispute about whether the officials had instructed the firm not to proceed without a more beneficial State indemnity.
In a judgment delivered on 28 February 2008, Mr Justice Clarke allowed the defendants one week to file a defence. He ordered them to pay all costs of the proceedings to date, including the costs of the application to set aside the judgment. Enforcement of the costs order was stayed until the proceedings as a whole are complete.
The officials say they retained the firm over defamation claims concerning newspaper articles published in late 1995 and early 1996. Proceedings were issued in late 1998 but not served. The officials later changed solicitors, who discovered the unserved summons in 2003, after the limitation period had expired. The negligence claim concerns the failure to serve the proceedings and the firm’s failure to explain why they remained unserved.
The plaintiffs had obtained judgment in default of appearance on 20 December 2004, with damages to be assessed. The defendants applied to have that judgment set aside. The court had previously ruled that the judgment was obtained regularly, so the defendants had to show a defence with a “real prospect of success” before the judgment could be reopened.
The judge found that the defendants met that threshold on the disputed question of instructions. The firm says the plaintiffs would not proceed without a better indemnity from the State; the plaintiffs say they instructed the firm to continue if that was the best available offer. The judge did not decide which account was correct, saying that the factual dispute should be resolved at a later hearing. The State’s indemnity was described as offering cover on the basis that any damages recovered would go to the State, and the plaintiffs considered that unsatisfactory.
The judge rejected a separate proposed defence that the plaintiffs’ new solicitors should have applied to renew the summons without an explanation from the former firm. He said they were in an “impossible situation” without the firm’s assistance.
The liability defence is confined to the indemnity and instructions issue. The defendants may raise issues about the amount of damages. The judge also required strict compliance with specified discovery deadlines and said material failure could lead to the defence being struck out and the case reverting to an assessment of damages. He noted that the defendants had not adequately explained their delay in applying to set aside the judgment. The ruling addressed that application; it did not determine the negligence claim or assess damages.