Civil Litigation Brief: A look at Summary Judgment

Summary Judgment is a procedure whereby a claim can be disposed of without the need for a trial. Judgment can be awarded in a case to an applicant pursuant to the Civil Procure Rules Part 24. Other noteworthy rules for consideration are CPR1.4 and the Overriding Objective; and CPR 3.14 setting out the court’s inherent powers to make orders of its own initiative.

Why would you apply for Summary Judgment and What are the Advantages of doing so?

If served with a Claim, or if you have brought a Claim and are served with a defence in reply, you have several options as to how you may choose to reply. One of these options is to consider whether the matter is appropriate for Summary Judgment, rather than having to dispose of the Claim at a full trial. For the party considering applying for Summary Judgment, there are obvious benefits; saving of costs and resources; quickly disposing of a claim that may otherwise run for a number of months or even years; obtaining favourable judgment early on; or stopping spurious or vexatious claims in their tracks.

Even if the application is unsuccessful, it may bring about a tactical advantage and save time in that the other party will have been forced to set out its position and evidence at an early stage, forcing the other party to ‘show its hand’, and it sends a message that the matter will be pursued or defended vigorously.

It may even be possible to make more than one application for Summary Judgment throughout the life of a Claim, as explained by Hobhouse LJ in D G Finance Ltd v Scott and another [1995] (unreported):

“A second application may be entertained where, since the previous unsuccessful application, there has been some change in the proceedings which has given rise to a new situation, not covered by the decision on the earlier application, sufficiently cogent to justify the further application.”

An application to strike out a claim where there is no case to answer has significant overlap with a Summary Judgment claim, however, they are different. Tactically, it may be worthwhile considering bringing a strike out application together with a Summary Judgment application, in the event that the former is unsuccessful, but the latter succeeds.

A Look At Summary Judgment and CPR 24:

https://www.justice.gov.uk/courts/procedure-rules/civil/rules/part24

The Summary Judgment Procedure is set out in CPR Part 24 and further guidance on practice is contained within Practice Direction 24.

CPR 24.1 states: This Part sets out a procedure by which the court may decide a claim or a particular issue without a trial.

The Grounds for Summary Judgment being awarded are set out at CPR 24.2:

24.2 The court may give summary judgment against a claimant or defendant on the whole of a claim or on a particular issue if –

(a) it considers that –

(i) that claimant has no real prospect of succeeding on the claim or issue; or

(ii) that defendant has no real prospect of successfully defending the claim or issue; and

(b) there is no other compelling reason why the case or issue should be disposed of at a trial.

(Rule 3.4 makes provision for the court to strike out a statement of case or part of a statement of case if it appears that it discloses no reasonable grounds for bringing or defending a claim)

Who may apply for Summary Judgment and what for:

From this we can see that the Application for Summary Judgment procedure is one available to both Claimants and Defendants; and that the order for judgment may be on the Claim as a whole, or one particular “issue” (part) of the Claim. For example if a Claimant was to bring a spurious claim against someone for a claim in breach of contract with a tort element, it is possible for the Court to give Summary Judgment on the breach of contract issue (for example if there was found to be no valid contract existing) but allow the tort claim alone to continue.

“No real prospect” (CPR 24.2(a))

CPR 24.1 and 24.2 together set out the requirements for Summary Judgment to be given.

The Court can give Summary Judgment under CPR 24 when it is satisfied that the Claimant has no real prospect of succeeding on the claim (r24.2(a)(i)); or the Defendant has no real prospect of successfully defending the claim (r24.2(a)(ii).

The burden of proof rests on the applicant. That burden is not the same balance of probabilities that would be applied at trial. Further in order to defeat an application, a Respondent must show that it has some “prospect”, i.e. there is a chance they may succeed. Again, the Court does not have to be satisfied that the Defendant will likely succeed, as the purpose of the application is not to run a mini-trial, but the Court must be satisfied that there is a “real” prospect, that meaning not one that is false, fanciful or imaginary.

Royal Brompton Hospital NHS Trust v Hammond (No 5) [2001] EWCA Civ 550 [2001] All ER (D) 130 (Apr) 255

HELD: On an application for summary judgment, the court should consider the witness statements and what evidence was likely to be available at trial. However, it should not apply the standard of proof required at trial, i.e. the balance of probabilities. The proper test was whether there was a real prospect of success.

Three Rivers DC v Bank of England [2001] UKHL 16

Held, on appeal:

(1) Cases were not suitable for summary disposal where they were highly complex and merited the hearing of oral evidence at trial.

(2) The court must have regard to evidence available to the parties at present but also that evidence likely to be available following disclosure and exchange of witness statements.

(3) The question of whether a claim has no real prospect of success must be answered having regard to the overriding objective.

(4) ‘Real’ prospect of success meant prospects which were more than simply ‘fanciful’.

Swain v Hillman 25.16 [2001] 1 All ER 91

On a summary judgment application, the detailed facts of the case should be left to the trial judge to consider and proper disposal of an issue under CPR Pt 24 does not involve the judge conducting a mini-trial.

However, note:

Sharma v Jay [2003] EWHC 1230 (QB) [2003] All ER (D) 284 (Apr)

HELD: Although it was not open to a judge to conduct a mini-trial on an application for summary judgment, it was open to a judge at the interlocutory stage to make findings of fact adverse to the party against whom summary judgement was sought, if the judge was of the opinion that the evidence, taken at its highest, was such that a jury properly directed could not find facts properly in favour of that party.

Further in Wrexham Association Football Club Ltd v Crucialmove Ltd [2006] EWCA Civ 237, the Judge found that findings of bad faith could be reached in a summary judgment application provided all the evdience enabling the Judge to make such finding is available to it at the time of the application.

“no other compelling reason why the case or issue should be disposed of at a trial” (CPR 24.2(b)).

In determining whether the grant Summary Judgment, the Court must also be satisfied that there is no other compelling reason why the case or issue should be disposed of at a trial (r24.2(b)). It should be noted that the requirement for no prospect of success, and this requirement do not hang together, despite CPR using the word “and” to connect them; rather the former provides the basis for granting an application for Summary Judgment, whilst the latter provides a basis for refusing it.

The wording of r24.2(b) caused issue when CPR first came into force as this rule simply referred to a “reason why the case should go to trial”. Drafting of Part 24 has been criticised for including rule 24.2(b) without more clarity, as the wording was transferred over to CPR from the previous High Court rules on dealing with Summary Judgment applications (RSC Ord 14; 14A and Ord.18 r.19), which were said to be clearer as the previous rules more plainly said that an application for summary judgment should be refused were the defendant had satisfied the court that there was an issue to be tried, or where there ought to be a trial for some other reason. This was further clarified and explained by case law. However, it was not then clear how r24.1 and 24.2 would operate in the CPR, in terms of considering both requirements together, as clearly it would not have been the draftsman’s intention that a summary judgment application could be defeated where a case was determined to have no real prospects, but still goes to trial because there is a “reason” to go to trial. For this reason, by the Civil Procedure (Amendment No 3) Rules 2000, the word “compelling” was inserted before “reason”. The addition certainly makes the threshold for a “reason” higher, but arguably it is still left in a precarious position.

What is considered compelling has been built up through case law since the passing of the CPR Amendment Rules No. 3 2000. Often this relates to multi-party litigation where summary judgment would not be applicable.

For example in Bouygues (UK) Ltd v Dahl-Jensen (UK) Ltd [2000] B.L.R. 522, Buxton L.J rules that the fact that the claimant company was in liquidation was a compelling reason to refuse Summary Judgment where there were ongoing latent and cross-claims between the parties. Similarly, in Iliffe v Feltham Construction Ltd [2015] EXCA Civ 71, summary judgment was seen as inappropriate against a defendant when similar issues were remaining to be determined at a trial between that defendant and another party in an ongoing additional claim.

In Commerz Real Investmentgesellschaft mbh v TFS Stores Ltd [2021] EWHC 863 (Ch), Chief Master March commented that he doubted that the authorities dealing with the old RSC Order 14 (which was replaced by CPR 24) were a reliable guide to the proper approach as to whether there was another compelling reason to try the case or issue, as the addition of the word “compelling” was clearly intended to limit the very wide discretion that previously applied under the pre-CPR rules.

If a Respondent cannot show a real prospect of success, it may still avoid summary judgment by showing that there is some other compelling reason for a trial, for example, the respondent needs time to investigate the claim, or the applicant’s conduct, but this requirement must not be used simply as a way to attempt to weaken the application of the “no real prospect” rule in r24.2(a).

The “issue” to which CPR 24.2 refers is a part of the claim, whether a severable part of the proceedings or a component of a single claim. It is not any factual or legal issue among many that would need to be decided at trial to resolve such a claim or part of it. If determination of an issue before trial only has the consequence that there is one fewer issue for trial, it is not suitable for summary judgment (ADL Advanced Contractors Ltd v Patel [2021] EWHC 220 (Comm), considered in Legal update, Scope of CPR 24 narrow and does not permit determination of every issue).

Considering the law separate from evidence:

Where a summary judgment application gives rise to a point of law, if that point is short and the Judge has all the information before them to make a determination, such may be made at the application and then a ruling made. This question is considered separate from the evidence. It is entirely possible that a Respondent may say that there is further evidence yet to come to light which would be a reason not to grant summary judgment. This is relevant, however the Court will first consider points of law and the construction of the pleading, before turning to evidence. It is not enough for a Respondent to say “there is more evidence to be disclosed”. In Three Rivers DC v Bank of England (No. 3) [2001] All E.R. 513, Lord Hobhouse stated:

“if the respondent’s case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant’s case is bad in law, the sooner that is determined, the better.”

This reasoning makes sense. A party’s case is as it pleads. It does not matter if all the evidence points in its favour, if it pleads a bad case. In this situation, pursuant to PD 24, Paragraph 5 the Court may make a conditional order, such as requiring a party to make changes to its pleadings.

Orders the Court may make:

PD24, Paragraph 5.1 sets out the orders that a Court may make as follows:

5.1  The orders the court may make on an application under Part 24 include:

(1) judgment on the claim,

(2) the striking out or dismissal of the claim,

(3) the dismissal of the application,

(4) a conditional order.

5.2  A conditional order is an order which requires a party:

(1) to pay a sum of money into court, or

(2) to take a specified step in relation to his claim or defence, as the case may be, and provides that that party’s claim will be dismissed or his statement of case will be struck out if he does not comply.

Conclusion:

Summary Judgment is a procedure whereby a claim can be disposed of without the need for a trial. It can be given by the court of its own initiative, or upon application by either a Claimant or a Defendant. It is designed to stop parties running claims or defences that have no real prospect of success, and therefore, colloquially put, the writing is on the wall. By giving the Summary Judgment where it is right to do so, the Court is furthering the Overriding Object of achieving justice, saving costs, and not wasting the Court’s time and resources.

Summary Judgment is a tactical application that can be highly effective in litigation, but parties seeking to use it must tread carefully as if unsuccessful, the Court can make an adverse costs order against them.

Here at Ai Law we have specialists in all types of commercial litigation. If you need advice in respect of any matters of dispute, or need a qualified legal professional on your side to advise and act for you, please get in touch.