Serving a claim on a dissolved partnership
Tuesday, 27th September 2016
The issue of service of a claim form is extremely serious and getting it wrong can be fatal to the claim.
In the recent case of Planetree Nominees Ltd and another v Howard Kennedy LLP  EWHC 2302, Chief Master Marsh considered whether the claimants had properly served a claim against a dissolved partnership and if not, whether service by an alternative method should be allowed.
The defendant law firm (which was then a partnership) provided legal services to the claimants under a retainer entered into in January 2010. That law firm ceased trading as a partnership in 2011 and upon cessation, its practice was transferred to an LLP.
On 11 December 2015, the claimants sent a letter of claim to the LLP. A response was sent back advising the claimants that the correct entity was in fact the previous partnership, and not the LLP.
Prior to issuing the claim, the claimants' solicitors asked the defendant's solicitors whether they had instructions to accept service. There was no response to that email and no subsequent chasing by the claimant.
Almost four months later, a letter was sent by the claimants' solicitors (by post to the LLP?s address) enclosing, purportedly by way of service, the claim form.
Service of a claim form under the Civil Procedure Rules (?CPR?)
Importantly, a claim against a partnership is a claim against individuals. CPR 6.9(2) provides that an individual being sued in the business name of a partnership should be served at their usual or last known residence or at the principal or last known place of business of the partnership. CPR Rule 6.9(3) states that where the claimant has reason to believe that the address of the defendant referred to above is an address at which the defendant no longer resides or carries on business, the claimant must take reasonable steps to ascertain the address of the defendant?s current residence or place of business.
In accordance with para 5B of Practice Direction 7A, a party is entitled to make a request for a 'partnership membership statement', which is a written statement of the names and last known places of residence of all the persons who were partners in the partnership at the time when the cause of action accrued. The partners are required to respond to that request within 14 days of receipt. The claimants had not requested such a statement before purporting to serve the claim form and Chief Master Marsh said that it seemed to him that it was 'not possible for a claimant to say that it has taken reasonable steps to ascertain the current address of the individual defendants, the partners, or a place of business without serving such a request'.
Service of the claim form by an alternative method or at an alternative place
Chief Master Marsh therefore turned to consider whether the court should deal with the position under CPR 6.15(2) and order that the steps already taken to bring the claim form to the attention of the defendant by an alternative method or at an alternative place is good service. After consideration, this was not permitted by Chief Master Marsh who explained that 'one of the main difficulties for the claimants on their application is the complete absence of any explanation about what was happening between the period starting with the issue of the claim form and the letter to the LLP nearly four months later.'
Chief Master Marsh explained that "[T]he rules relating to service of claim forms are technical, but they must be complied with. The court has no freestanding discretion to validate service of a claim form."
Key points to remember:
- Always comply with the Civil Procedure Rules relating to service of documents (especially claim forms);
- If you are bringing proceedings against a dissolved partnership, take reasonable steps to ascertain the defendant's current address and serve a request for a partnership membership statement; and
- Allow plenty of time to effect good service before the four-month period of validity expires.