Protective claims

Nomura International plc v Granada Group Ltd [2007] EWHC 642 (Comm); [2007] All ER (D) 404 (Mar); NLJ 8 June

This judgment was concerned with the practice of potential claimants faced with the imminent expiry of a limitation period issuing a protective claim in the form of a generally endorsed claim form to stop the limitation period running, but delaying serving the defendant while they conduct further investigations. Although this practice has largely gone unchallenged in the past, the obligation now imposed on parties to civil litigation is to engage in a meaningful pre-action process before having recourse to proceedings, together with the requirement introduced by the CPR for claim forms to be verified by a statement of truth. These factors demonstrate the CPR to be even more adverse to protective claims than the Supreme Court Rules had previously been. In striking out the claimant’s protective claim in the present proceedings, the judge said: ‘The key question must always be whether or not, at the time of issuing a writ, the claimant was in a position properly to identify the essence of the tort or breach of contract complained of and if given appropriate time to marshall what it knew, to formulate particulars of claim … If a claimant cannot do that which is necessary to prosecute the claim by setting out the basis for it, even in a rudimentary way, a claimant has no business to issue a claim form at all in the hope that something may turn up.’