Protective writs struck out of court

Nearly 400 firms of solicitors had claims against them struck out by the Court of Appeal. Roger Pearson reports..

Judgment is now pending in a House of Lords case in which claims against 382 firms of solicitors have been struck out for being an abuse of the process of the court.

The case raises points of major general importance on the issue of so-called "protective writs" made in order to protect a claimant from possible future claims against it.

The case of West Bromwich Building Society v Mander Hadley & Co centres on home income schemes which led to many home owners losing out after the collapse of the property market in the late 1980s.

West Bromwich's appeal is against the Court of Appeal's striking out of nearly "400 protective writs" issued against solicitors in the wake of what was a major financial disaster for many individual investors.

The writs in question were issued in 1995 against 382 firms of solicitors who had been involved in home income transactions and sought indemnity in the event of claims by home owners against West Bromwich.

They were issued shortly before the primary limitation period was due to expire, on the basis of West Bromwich's fears that home owners, unknown to them, might have issued writs for their losses and intended to serve them after expiry of the limitation period.

In the High Court Mr Justice Evans-Lombe dismissed an application to strike the writs out.

However, when the case went to the Court of Appeal in February that decision was reversed and the writs were struck out.

The court held that the issue of protective writs when a claimant had no intention of prosecuting the claim and was unaware of any valid basis for it, was an abuse of the process.

In striking the writs out the Court of Appeal took the view that West Bromwich was not entitled to claim indemnity until a claim was actually made against it, as the court considered it would be unaware of any valid basis for the claim made in the writ.

The court also held that it was wrong that the solicitors should face negligence claims but not be given details of the negligence alleged against them