Various Claimants (The Persons Identified in Schedule 1) v G4S Plc
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mann |
| Judgment Date | 10 March 2021 |
| Neutral Citation | [2021] EWHC 524 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: FL-2019-000007 |
| Date | 10 March 2021 |
[2021] EWHC 524 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
FINANCIAL LIST (ChD)
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Mr Justice Mann
Case No: FL-2019-000007
Mr Andrew Onslow QC and Mr Shail Patel (instructed by Morgan Lewis & Bockius UK LLP) for the Claimants
Mr Laurence Rabinowitz QC and Mr Simon Colton QC (instructed by HSF LLP) for the Defendant
Hearing dates: 5 th & 6 th November and 16 th & 18 th November 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This application raises a large number of questions about the ability of claimants to have themselves added to a claim after a limitation period has expired and about amendments to the descriptions of claimants (to use a neutral term) after service and after the expiry of the limitation period.
Since 2005 the defendant (“G4S”) has provided security and other services to the government. Those services included the tagging of prisoners. On 17 th May 2013 the Secretary of State for Justice, Mr Chris Grayling, announced that G4S was to be investigated in respect of billing issues. An independent team was to audit the processes and information supplied by G4S. On 11 th July 2013 Mr Grayling announced that the Ministry of Justice had identified anomalies in the charges made by G4S in that charges were made in respect of prisoners for whom charges should never have been made (for example, because they had died). He had referred the matter to the Serious Fraud Office. More information emerged until in March 2014 it was announced that there had been a settlement of the government's claim in the sum of over £108.9m.
On 10 th July 2019 various claimants (“the original claimants”) issued a claim against G4S under section 90A of the Financial Services and Markets Act 2000. Their claim was based on the fact that in the period since 2011 they had all bought and held shares in G4S and they had suffered loss in that their shares lost value as a result of the announcements about what was said to be a fraud. They claim to have relied on public statements by G4S in its annual reports and other documents in which it trumpeted the strength and honesty of its business practices (putting the matter shortly), and those statements turned out to be false. Based on that falsity, the reliance and the decline in share values, the claimants claimed losses under the section. It is unnecessary to set out the precise provisions of the section. The claim was not preceded by any form of letter before action or any of the other usual warnings or intimations of claims. This issue date is significant because it is the last day of the limitation period if the starting point was the announcement of 11 th July 2013 (and it is accepted by the claimants that that is at least arguable).
The claim form was not served until 30 th April 2020, there having been agreed extensions of time for service to cover the intervening period. In that intervening period, and unknown to G4S, the claim form underwent a series of amendments as to claimants. Some claimants were added on the basis that they had their own claims of the same nature as the claims of investors who were already parties. On the occasion of some amendments claimants were removed from the claim form. Some removed claimants were those who originally appeared, but most were of claimants subsequently added, so they came and went after the issue of the claim form.
There were no less than 6 sets of amendments made during that period. 3 of the amendments, adding 9 claimants, were separate amendments carried out on the same day (11 th July 2019, the day after issue and therefore the day after the arguable expiry of the limitation period applicable to the pleaded claim). 179 claimants were added on 28 th August 2019, and 3 more on 11 th November. On 30 th April 2020 (shortly before service) 93 claimants were removed. When one nets off the position there are 2 additional claimants (net) from the 11 th July amendments, and all the remainder of the surviving claimants (62 of them) were added in the August amendments. Mercifully the precise detail of this does not matter on the basis on which the arguments were run.
Thus the claim form has 5 “Re-“s before the word “Amended” and a virtually complete spectrum of colours seldom seen on pleadings, and all before the claim form was served. The original number of claimants numbered 43. At its high point the claim form contained 182 claimants (after deletions and additions), before settling down to 93. (I take all these figures from the unchallenged account of Mr Rabinowitz. If it turns out they are a bit wrong it does not matter for the purposes of this application).
Once the claim form, and then Particulars of Claim, had been served, G4S set about challenging the addition of claimants who were added after the issue of the claim form. I shall call those claimants “the additional claimants”. They do so on the basis that the CPR do not permit the addition of claimants before service (or at least not without permission of the court), either generally or where, as here, there is said to be an arguable limitation defence. The claimants oppose that, and mount their own further amendment application. This time the amendments are not to add (or subtract) more parties, but are to amend the words being or purporting to be the names of claimants as they appear on the claim form. I have tried to use as neutral a description as possible because the nature of the changes is a hotly contested matter on that application.
The applications before me were the subject of a woefully inadequate time estimate, with the result that extra days had to be found, with an interval of a week between two sets of days. That gave the defendants the opportunity to make a yet further application, being an application for relief from sanctions in case that was necessary to bring their attack on the addition of the added claimants under a different head from that specified in their application notice.
The dispute in the various applications centred around provisions of the CPR permitting amendments but limiting amendments which can be made after the expiry of a limitation period relevant to a claim. They were CPR 17.2, 17.4, 19.4 and 19.5. In what follows I shall not always prefix references to CPR provisions with the abbreviation “CPR”; it will be obvious when references to provisions are being made and it will, I hope, aid exposition if I omit unnecessary prefixes.
What is at stake in these applications is the ability of a large number of claimants, or would-be claimants, to bring claims under section 90A. The significance of the exercise can be judged by the amounts at stake. In broad terms the claims of all the would-be claimants are said to be worth £102m. If all the claimants joined from 11 th July 2019 onwards cannot be joined then £92m falls out of the picture. So in financial terms the present dispute, if decided entirely in favour of the defendant, could seal the fate of the bulk of the claims in financial terms.
The applications and an outline of the issues
In a little more detail, the applications made by the parties are as follows.
In its application notice dated 13 th July 2020 G4S seeks the following relief (the terms may be important):
“[An order that]
1. Declares that the addition of claimants to the claim form after 10 July 2019 was ineffective.
2. Pursuant to CPR 3.4(2)(b) or (c), references in the Particulars of Claim to claims by claimants who were added to the claim form after 10 July 2019 shall be struck out.
3. Pursuant to CPR 3.4(2)(a), (b), or (c), claims by claimants who have not been properly identified or are not legal persons shall be struck out.
4. Pursuant to CPR 3.4(2)(b) or (c), allegations in the Particulars of Claim in relation to statements, omissions or delays prior to September 2011 shall be struck out.”
There was a fifth claim, but that is no longer relevant. The following issues arise out of all that:
(i) Can extra claimants with separate claims be added without permission under CPR 17.1? That is paragraphs (1) and (2). The stated jurisdiction of paragraph (2) is potentially significant because the claimants say that any application to challenge the joinder should have been made under CPR 17.2, and within 14 days, and not under 3.4. I shall call the points arising out of these two paragraphs the “added parties” point. It includes a dispute as to whether a relevant consent was filed with the court as required by the rules.
(ii) (3) embodies a complaint that a (large) number of claimants are not properly identified for a number of reasons — mainly that they are not legal entities with appropriate capacity to sue, as their names appear in the claim form. This affects a large number of claimants. I shall call this the “unidentified claimants point”, after the nomenclature adopted in argument, even though as a description it is not entirely apt.
(iii) (4) embodies a complaint to the effect that the claim form seems to limit claims to the period from 2011, whereas the Particulars of Claim seeks to extend the claims back to 2006 or earlier. This is the “2011 point”.
As foreshadowed above, during the hearing, in an application notice dated 9 th November 2020 G4S sought relief from sanctions so as to enable it to make an application under CPR 17.1 outside the time limit provided by 17.2. This is said to be a precautionary measure because G4S's main point is that it is not necessary.
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