Are you “warehousing” your claim?

Warehouses and litigation are two words that are not often associated with one another. However, the recent High Court case of Asturion Foundation v Alibrahim has clarified the significance of the term “warehousing” in the context of civil litigation.

The practice of putting a claim on hold without ever intending to pursue it is commonly referred to as “warehousing”. However, in that case the Judge concluded that case law had not established a test for what constituted “warehousing” or whether the same amounts to an “abuse of process” warranting the striking out of a claim.

So, what powers does the Court have when a party to litigation is causing undue delay?

The Civil Procedure Rules (the court rules that govern civil claims) allow the Court to strike out a statement of case (pleading) if it appears to the Court that it is an abuse of the court process or it is otherwise likely to prevent the just disposal of the proceedings. When the Court strikes out a statement of case, this will ordinarily lead to the Court giving judgement in favour of the opposing party to the litigation.

Delay, among others, is one category which falls under the “abuse of process” title. However, delay on its own, regardless of the length of the delay, cannot be categorised as an “abuse of process” without there being some additional factor which transforms the delay into an “abuse”. On the other hand, delay combined with a total or wholesale disregard of the rules of Court with full awareness as to the consequences is capable of amounting to an “abuse”, entitling the Court to strike out the action.

An additional factor to transform the delay into an “abuse” may be an intention to never bring the litigation to a conclusion so where a Claimant delays in prosecuting their case without giving a valid reason, the Court is entitled to infer that their motive is not a proper one. Even if the Claimant subsequently decides to pursue their claim after delaying for a substantial period of time without giving a valid reason, the Court can still find that there has been an “abuse of process”.

Another factor that, combined with substantial delays, will often amount to an “abuse” is the non-compliance with Court Orders. The courts take a very dim view of litigants who fail to comply with its orders.

Further a claim may also be struck out for abuse of process where the delay has caused significant prejudice to the other side.

Blacks Solicitors can provide specialist advice on the Court’s powers to strike out claims and can assist with all types of civil and commercial disputes. If you require advice, please contact Luke Patel on 0113 227 9316 or by email at “LPatel@LawBlacks.com”.