Business Computers International Ltd v Registrar of Companies: ChD 1988

A winding up petition was served at an address which was not that of the plaintiff’s registered office, and nobody appeared at the hearing. A winding up order was made against the plaintiff company, which now sued the solicitors who had misserved the petition in negligence in respect of the losses said to have been sustained as a result of the order.
Held: The claim failed.
There is an inherently antagonistic relationship between adverse litigants which makes it inappropriate for the law to recognise a duty of care by one adverse party, or his legal representative, to another party. The safeguards in such a case must be found in the rules and procedures that govern litigation.
Scott J said: ‘Is it just and reasonable that a plaintiff should owe a duty of care to a defendant in regard to service of the originating process? I do not think that it is. The plaintiff and the defendant, the petitioner and the respondent, are antagonists. The plaintiff, or the petitioner, is seeking a legal remedy in an adversarial system. The system stipulates the rules and requirements that must be observed by the two parties. The plaintiff must issue his process and must serve it on the defendant. If there is default in service the process must be struck out. If an order is obtained without the prescribed rules or regulations having been observed, the order may be discharged or set aside, sometimes by an application at first instance, sometimes on appeal. The prosecution of the action or of the petition is subject throughout its career from institution to final judgment to judicial control. Service of process is a step, in the prosecution. It must usually be proved before an order can be obtained against an absent defendant. The proposition that a duty of care is owed by one litigant to another and can be superimposed on the checks and safeguards that the legal system itself provides is, to my mind, conceptually odd. The safeguards against ineffective service of process ought to be, and I think must be, found in the rules and procedures that govern litigation. The rules and procedures require that, save on ex parte applications, proof of service be shown before an order is made against an absent party. If the proof of service is false, be it through negligence or design, an order may be made that should not have been made. The injured party’s remedy is to have the order set aside. An action for damages cannot be based on the falsity of the proof of service. Nor, in my judgment, can the adequacy of the efforts made to effect service be subjected to a tortious duty of care.’ and ‘In my judgment, there is no duty of care owed by one litigant to another as to the manner in which the litigation is conducted, whether in regard to service of process or in regard to any other step in the proceedings. The safeguards against impropriety are to be found in the rules and procedure that control the litigation and not in tort. I am therefore of opinion that the plaintiff’s statement of claim does not disclose a reasonable cause of action against the second defendant and ought to be struck out.’
Scott J
[1988] Ch 229, [1987] 3 All ER 465, [1987] 3 WLR 1134
England and Wales
Cited by:
CitedCommissioners of Customs and Excise v Barclays Bank Plc ComC 3-Feb-2004
The claimant had obtained orders against two companies who banked with the respondent. Asset freezing orders were served on the bank, but within a short time the customer used the bank’s Faxpay national service to transfer substantial sums outside . .
CitedCustoms and Excise v Barclays Bank Plc CA 22-Nov-2004
The claimant had obtained judgment against customers of the defendant, and then freezing orders for the accounts. The defendants inadvertently or negligently allowed sums to be transferred from the accounts. The claimants sought repayment by the . .
CitedHM Customs and Excise v Barclays Bank Plc HL 21-Jun-2006
The claimant had served an asset freezing order on the bank in respect of one of its customers. The bank paid out on a cheque inadvertently as to the order. The Commissioners claimed against the bank in negligence. The bank denied any duty of care. . .
CitedTrent Strategic Health Authority v Jain and Another HL 21-Jan-2009
The claimants’ nursing home business had been effectively destroyed by the actions of the Authority which had applied to revoke their licence without them being given notice and opportunity to reply. They succeeded on appeal, but the business was by . .
CitedConnolly-Martin v Davis CA 27-May-1999
A claim was brought by a party against counsel for his opponent who had gone beyond his authority in giving an undertaking for his client.
Held: The claim had no prospect of success, and had been struck out correctly. Counsel offering to the . .

These lists may be incomplete.
Updated: 24 June 2021; Ref: scu.192633