The Court of Appeal has given insurers an early indication of the new litigation culture under the Woolf reforms after over-ruling a District Court and County Court decision.
Law firm Weightmans, acting for Axa Global Risks, successfully appealed against an interlocutory judgment made in a personal injury road traffic accident case.
Problems arose for Axa Global Risks after it failed to gather information from its client following the accident last October.
When the claimant solicitor issued proceedings in January, Weightmans applied for the case to be set aside. But the District Judge ruled out a set aside judgment because the defendant company had failed to explain why there was a period of delay on its part before the issue of proceedings.
The District Judge made the ruling on both the period of time before proceedings were issued and the nine-day interlocutory period. It was upheld by the County Court.
But the Court of Appeal has now held that the judge was wrong to refuse to set aside judgment, despite the fact that the case was heard under the new Woolf reforms which has imposed a strict timetable for litigation procedure.
"There is nothing under the Civil Procedure Rules 13.3 or 1.1 to suggest that if the defendant does not give a reason for the delay it is a knock out blow because there is no material before the court on which it can make a decision," said Lord Justice Brooke.
"The fact that the defendant gave no reason is one of the matters which the court may take into account.
"If there is a long unexplained delay the situation would be different.
"The Court would expect an explanation."
The Court took a more lenient line because it felt there was a defence to be heard in court.
"Sometimes delays are unavoidable, however hard insurers try to prevent them, and however efficient their systems might be," explained Weightmans associate Will Quinn.
"Given that claimant solicitors will enter Interlocutory Judgment at the earliest opportunity afforded by the rules, it was important to establish whether a failure to give reasons for any delay before proceedings are commenced is a knock out blow to any application to set aside a judgement.
"Helpfully the Court of Appeal has confirmed that it is not."