CROs: Too much of a bad thing
By
Is it time to consider a further remedy beyond civil restraint orders for dealing with irrational litigants, asks Patrick Wheeler
In 2014, the article ‘Civil Restraint Orders: Enough is Enough’ (SJ 158/37) implied that the power to award CROs was relatively rarely used, but seemed to be effective. Since then, courts have issued CROs with increasing frequency, but it is doubtful whether they are an effective control on misguided but determined litigants.
Many such individuals continue trying to challenge decisions and make fresh applications in an attempt to circumvent an order intended to moderate their behaviour. Two recent cases illustrate the difficulties that both the courts and opposing parties are facing.
To recap, the purpose and effect of a CRO is to prevent a litigant from continuing to make meritless claims and applications by requiring the permission of a judge before future applications are issued in specified circumstances. CPR 3.11 and Practice Direction 3C set out the three types of CRO: limited, extended, and general.
In Perry v F H Brundle and others [2017] EWHC 678, the Intellectual Property Enterprise Court had to consider whether an extended CRO, made for the maximum two-year period, should be renewed for a further period or whether a general CRO should be ordered.
The case originally involved a patent for a bracket for fence posts which the claimant alleged had been infringed by the defendants. The infringement claims failed but the claimant continued to make applications which the court recorded as being totally without merit.
An ECRO was granted in 2015, but the claimant continued to make applications in proceedings which were not covered by the ECRO and attempted (unsuccessfully) to set aside both the ECRO and the earlier judgments. The claimant had also indicated that he planned to bring over 20 separate claims against the defendant parties and their advisers.
The defendants asked for a general CRO. HHJ Hacon said: ‘It seems to me that the principles... in relation to application for an ECRO apply equally in the context of a GCRO save that I must be further satisfied that an ECRO would not be sufficient or appropriate. Generally this will require evidence that the party concerned is likely to persist in the future in issuing claims or making applications which are totally without merit concerning matters other than those involving or relating to or touching upon or leading to the proceedings in which the order is made.’
He concluded that there was a real risk that the claimant did intend to bring such claims and granted a GCRO for a period of two years.
The second case, CFC 26 Limited v Brown Shipley and others [2017] EWHC 1594 (Ch), considered the circumstances in which an ECRO can be granted against an individual where meritless claims and applications are brought not only in his own name, but also through companies which that individual controls. The receivers of a company wished to sell a property in which a Mr Yeganeh had an underlease. He applied for an injunction to restrain the sale of the property. When that failed, he brought other claims and applications through companies which he controlled in attempt to achieve the same result.
Newey J had to consider whether the applications had in reality been by the same individual in order for an ECRO to be made. In making the order, he concluded that ‘references in Practice Direction 3C to a “party”… should be read as extending, not only to the named claimant or applicant but, where different, to the “real” claimant or applicant’.
Although Mr Yeganeh was not a named claimant in one action, he was ‘behind the litigation and particular corporate entities … effectively controlling the litigation and supporting it and … doing so with a view of obtaining a personal benefit if it is successful’. He had also clearly indicated his determination to ‘fight to the end, whatever it takes’.
The number of CROs being issued seems to be increasing, but in many cases the order appears to have little or no impact on litigants who persist in ‘an irrational refusal to take “no” for an answer’. Far from ‘[benefiting] the litigant as it means that they avoid spending time, energy and money on claims which stand no prospect of succeeding’ (HHJ Hacon), a CRO often just passes the burden to overloaded judges and harassed opponents to review the repeated applications that these individuals bring. Perhaps it is time to consider a further remedy beyond a GCRO.
Patrick Wheeler is honorary treasurer of the London Solicitors Litigation Association and a partner at Collyer Bristow