The Court of Appeal has had to consider the application of Civil Procedure Rule (CPR) 19.5 in the case of Lockheed Martin Corporation v Willis Group Ltd [2010] EWCA Civ 927. Lockheed Martin entered into a global settlement agreement with London Market insurance companies in 2002. However, it was unable to claim all that was due to it under that agreement because many of the insurance policies in question had been lost and could not be identified. As a consequence, Lockheed Martin brought proceedings against its broker for professional negligence.

Lockheed Martin issued proceedings against Willis Group Holdings Limited (Holdings) just days before the limitation period for the claim was to expire.  Subsequently, Lockheed Martin learned that Holdings was a Bermudian company and not the UK holding company it had intended to claim against, Willis Group Limited (Group).

Lockheed Martin applied to the court to substitute Group for Holdings using CPR 19.5. That rule permits the court, in limited circumstances, to add or substitute parties to litigation after the expiry of the relevant limitation period. The judge at first instance rejected the application on the basis of the application of case law pre-dating the adoption of the CPR. The Court of Appeal found that the judge at first instance had misapplied the law by using this approach. However, the Court of Appeal found that Lockheed Martin had no better a case against Group than it did against Holdings. This meant that Lockheed Martin was unable to fulfil the requirement of CPR 19.5(2)(b), “The court may add or substitute a party only if… (b) the addition or substitution is necessary.” The Court of Appeal did not have jurisdiction to permit the substitution as it was not “necessary“.

The case usefully shows how the court will approach the application of CPR 19.5. It also shows the narrow jurisdiction given to the court when allowing the substitution or addition of parties after a limitation period has expired.