Before:

0.	LORD JUSTICE AULD: Lord Justice Tuckey will give the first judgment.
1.	LORD JUSTICE TUCKEY: The claimant, Axa Insurance Company Limited ("Axa"), appeals against the decision of Mr Justice Walker, who on 2nd July 1999 struck out their claim for want of prosecution. Although the summons to strike out was issued the day after the CPR came into force, the matter was argued before the judge and decided by him on pre-CPR grounds. The judge decided against the claimants on the second limb of Birkett v James [1978] AC 297. In their notice of appeal and skeleton argument Axa accepted that they had been guilty of inordinate and inexcusable delay but attacked the judge's decision on prejudice. By their respondent's notice the defendants, Swire Fraser Limited ("Swire"), contended that the judge ought also to have found against the claimants on the first limb of Birkett v James and/or on the grounds of abuse of process. However, after the judge's decision, on 26th July this court decided the case of Biguzzi v Rank Leisure Plc [1999] 1 WLR 1926. Since the parties' attention has been drawn to this decision the shape of the appeal has changed.
2.	I turn first to the facts. Swire are brokers. The claim relates to a binding authority which Axa gave to Swire to bind personal stop loss cover for Lloyd's names from 1st December 1990 to 31st December 1991. Axa claim that Swire misrepresented the risk and misused the cover and claim damages of more than £1m. The misrepresentations are alleged to have been made in a series of meetings in October and November 1990. The dispute between the parties however does not appear to be about what was said at the meetings but about what documents were handed to Axa's representatives during the course of these meetings.
3.	Two other claims were started in the Commercial Court by other insurers. The Avon Insurance Company were the first claimants in each of those actions. Those claims were brought against Swire and an associated company in respect of the same binder and a binder for the previous year. The allegations made are similar to those made in this case. When this case was before the judge in July these cases were due to be heard at the beginning of October with an estimate of five to six weeks. We are told that they have now been heard by Mr Justice Rix between 4th October and 9th November and that he has reserved judgment.
4.	Turning to look briefly at the history of this case, proceedings were issued on 27th December 1995 and not served for three months. By 25th October 1996, when the matter first came before the court, Axa were asking for an extension of time to serve further and better particulars, which Mr Justice Colman gave them by consent, but he also made an ADR order in the following terms:      "Time for exchange of lists of documents under the RSC not to run for 3 months after service of points of reply during which the parties are to consider ADR and take such steps to refer their disputes to ADR as they may be advised. Summons to be restored for further directions no later than the expiry of 3 months from service of points of reply provided that both parties have written to the court informing it of what steps have been taken to refer the issues to ADR and that they have been unsuccessful."
5.	Following this order the dispute was not referred to ADR and no further directions were sought from the court. Between 27th November 1996 and 4th August 1997 there was, in the judge's words, "no outward sign of activity on the part of the claimants". Their solicitors then asked for Swire's list of documents within seven days, to which their solicitors replied that the judge had ordered ADR before discovery, reminded Axa of the parallel Avon litigation and suggested that it would be sensible to run this case in tandem with those proceedings. They asked for Axa's solicitors' views about this suggestion but there was no reply to this request. Indeed, despite reminders, and apart from a further peremptory request for a list of documents in December 1997 which they did not follow up, there was again no outward sign of activity by Axa until they issued a notice of intention to proceed on 29th March 1999.
6.	There was therefore delay from the end of 1996 to March 1999 in which the claim was not progressed at all. Axa sought to excuse their delay before the judge in a number of ways. He accepted that one of the reasons put forward helped to explain but did not excuse the delay up to October 1997, but rejected the other reasons advanced. In view of the concession that the delay was inexcusable it is not necessary to explore this aspect of the case further.
7.	In their evidence in support of the application to strike out Swire relied on prejudice caused by the fading recollections of the witnesses to the 1990 meetings. Of this the judge said:
8.	".. given the degree of documentation and the degree of overlap with the matters raised in the other actions, then if this stood alone it would not be enough ..."
9.	He went on however to say:      "The real prejudice seems to me to arise in the context of the sensible management of this overall dispute. The obvious course would have been, if the claimants in this action had progressed the matter properly, to have this action heard at the same time as the proceedings in the Avon actions in October 1999. As it is, this action is nowhere near a trial. It is, in my judgment, too late to insert this action into the October proceedings. It is too late because, quite simply, it would be unfair to the defendants to include those proceedings now. It would disrupt their existing preparations for an October trial. The defendants would be forced to fight on three fronts (even if the same solicitors and counsel were instructed on behalf of the claimants) because they would be having to meet three cases instead of two."
10.	He then elaborated on why it was too late by that stage (that is by the date of the hearing before him) for Axa to join the other proceedings. There was by then an application by them to do this before the judge but, in view of the fact that he struck the claim out, he did not need to consider this. The judge also pointed out that if the claimants were to be added to the other proceedings at that stage it would increase the estimated length of the trial to the prejudice of other litigants, including the other claimants in those proceedings, and the due administration of the courts.
11.	So much for the facts and the history. Before considering the arguments now advanced on this appeal it is necessary to look at the case of Biguzzi. This was a personal injury case in which, as the judge held, both parties had failed to comply with the rules. In allowing an appeal from a pre-CPR district judge's decision striking out the claim, he said that it was his view that:
12.	"... the new order will look after itself and develop its own ethos and that references to old decisions and old rules are a distraction".
13.	In upholding the judge's decision this court (Lord Woolf MR and Brooke and Robert Walker LJJ) broadly approved this approach. At p.1932B Lord Woolf said:      "However I do not accept the criticisms of the judge with regard to his approach to the previous authorities. Indeed far from criticising the judge, I would commend his approach. The amount of time which the deputy district judge had to spend in his judgment examining the old authorities indicates the disadvantage of having to look back, as the judge said, 'over your shoulder' at those authorities. ... He had to make a decision applying the principles under the CPR, not under the previous regime, in deciding whether this claim should be allowed to proceed. He could not, and should not, ignore the fact that the parties previously had been acting under a different regime. The fact that they were acting under a different regime does not mean that the judge is constrained to make the same sort of decision as would be made under the previous regime. The courts have learnt, in consequence of the periods of excessive delay which took place before April 1999, that the ability of the courts to control delay was unduly restricted by such decisions as Birkett v James [1978] AC 297. In more recent decisions the courts sought to introduce a degree of flexibility into the situation because otherwise the approach which was being adopted by litigants generally of disregarding time limits for taking certain actions under the rules would continue. Under the CPR the position is fundamentally different. As Rule 1.1 makes clear the CPR are: 'a new procedural code with the overriding objective of enabling the court to deal with cases justly.' The problem with the position prior to the introduction of the CPR was that often the courts had to take draconian steps, such as striking out the proceedings, in order to stop a general culture of failing to prosecute proceedings expeditiously."
14.	He went on to refer to the CPR and the importance within the CPR of time limits and to the court's unqualified discretion in rule 3.4(2)(c) to strike out for failure to comply with a rule, practice direction or court order. He then said at p.1933B:      "The fact that a judge has that power does not mean that in applying the overriding objectives the initial approach will be to strike out the statement of case. The advantage of the CPR over the previous rules is that the court's powers are much broader than they were. In many cases there will be alternatives which enable a case to be dealt with justly without taking the draconian step of striking the case out."
15.	A little later he said:      "In a great many situations those other powers will be the appropriate ones to adopt because they produce a more just result. In considering whether a result is just, the courts are not confined to considering the relative positions of the parties. They have to take into account the effect of what has happened on the administration of justice generally. That involves taking into account the effect of the court's ability to hear other cases if such defaults are allowed to occur. It will also involve taking into account the need for the courts to show by their conduct that they will not tolerate the parties not complying with dates for the reasons I have indicated."
16.	He then referred to some of the alternatives, including the power to order costs to be paid forthwith on an indemnity basis and the power to refuse to award interest for periods of delay.
17.	On this appeal Axa contend that it was not just or proportionate to strike out their claim for delay, which they say could not be characterised as an abuse of process. When Swire applied to strike the case out they had not alleged prejudice of the kind relied on by the judge because they knew at that stage that there would be time for Axa to join the other proceedings and take part in the October trial. The judge was wrong to look at the position in July. He should have looked at the matter at the end of the period of delay on the basis that he was dealing with an unconsolidated case and asked himself what prejudice had the admitted delay caused. He rejected the only prejudice relied on in the evidence before him. The prejudice which he identified flowed not from the delay but from the hypothetical fact of consolidation. Most of it would have resulted from consolidation whenever that had taken place.
18.	Swire contend that the judge's decision was correct whether one applies pre or post CPR principles. It was just for the Axa claim to be struck out. There had been a deliberate failure to comply with the ADR order and the delay, which amounted to an abuse of process, had meant that it was impossible to have the claim tried with the other claims which have now been tried in the recent trial. It would be unfair to Swire and prejudicial to other litigants if there had to be a further trial. The alternative powers available to the court could not remedy the situation. Biguzzi, they submit, had emphasised the importance of allowing judges to exercise the wide discretion which they now have under the CPR and the Court of Appeal should be slow to interfere.
19.	The problem about this last submission is that the judge, through no fault of his own, proceeded on pre-CPR lines. It is not entirely clear how that came about, although it is accepted that the judge's attention was not drawn specifically to the transitional arrangements in Part 51 of the CPR and it is conceded that he did not make any direction that the pre-CPR rule should apply to this case. It followed, I think, that the general presumption contained in rule 51.15(2) that the CPR would apply to the proceedings from then on covered the case and certainly I think it covers our consideration of the case on appeal. We cannot and should not consider the appeal simply on pre-CPR lines. Specifically it is no longer necessary to consider prejudice in the Birkett v James sense as elaborated in the many cases which followed this decision. Obviously the court will consider prejudice as part of its general inquiry as to what is just, but it will not have to seek out prejudice or ascribe it to a particular period or particular periods of delay. This exercise gave rise to endless argument and citation of authority in the pre-CPR days. We no longer have to perform it, thanks to the CPR. This Paragraph is referred to in: Nasser v United Bank of Kuwait [29].
20.	Rule 3.4(2)(c) confers a wide discretion on the court and does not require proof of prejudice. It obviously enables the court to strike out in cases of deliberate default or repeated failure to comply with the rules and orders of the court without resort to the court's inherent jurisdiction, although no doubt the court still has an inherent power to strike out for abuse of its process. I do not read Biguzzi as saying that the courts should treat delay or failure to comply with the rules any more leniently than in the pre-CPR days. The new rules simply enable the courts to adopt a more flexible approach. This Paragraph is referred to in: Asiansky Television Plc v Bayer-Rosin [44].
21.	The question for us in this case, as I see it, is whether the judge's decision can be upheld on CPR grounds. He did not decide that what happened was an abuse of process. I do not think it was either. Like him, I do not think it is necessary to consider the meaning and effect of the ADR order. It clearly stated that if there was to be ADR it should take place before discovery and it was obviously not intended that if there was no ADR the case could go to sleep. It was for Axa to progress their claim and there was substantial delay in their doing so. But I cannot characterise this as a deliberate default or the kind of conduct which has previously been held to be an abuse of process. Nor do I think that it becomes an abuse because the judge rejected some of the explanations for the delay advanced by Axa's solicitors in the evidence which they put before him.
22.	But before leaving the question of abuse I should deal with a new argument which Mr Stuart-Smith QC, counsel for Swire, has raised in this court. This argument is based upon the fact that since the proceedings were started there have been considerable reorganisations within the insurance industry. The seventh claimant in one of the other two actions is named in the proceedings as UAP Provincial Insurance Plc. With effect from 1st January 1998 this company's parent company merged with Axa's parent company. All Axa's business was transferred to the seventh claimant in the other proceedings and each of the companies has changed its name. So whilst the two companies are still separate, all their business, including (it is asserted, but not in fact shown) the claim in these proceedings, is now with the seventh claimants in the other proceedings. This situation, Mr Stuart-Smith submits, made it an abuse of process for Axa to continue with their claim in these proceedings. It should have formed part of the claim by the seventh claimant in the other proceedings from 1st January 1998, and to pursue it further in these proceedings offends against the principle in Henderson v Henderson, as elaborated in the three cases to which Mr Stuart-Smith referred: Yat Tung Investment Co Ltd v Dao Heng Bank Ltd [1975] AC 581; Ashmore v British Coal Corporation [1990] 2 QB 338; and Johnson v Gore Wood & Co [1999] Lloyd's Rep. (Professional Negligence) 1991.
23.	I cannot accept this submission. It is not necessary to consider the authorities in detail other than to note that in all the reported cases the abuse has involved an attempt to re-litigate after judgment or compromise. Here, at the time the court has to consider the matter no judgment had been given and there was no question of compromise. Mr Stuart-Smith's proposition therefore involves a considerable extension of the Henderson v Henderson principle. It is, as my Lord said in Bradford & Bingley Building Society v Seddon [1999] 1 WLR 1482, necessary for a party who alleges abuse in circumstances such as these to establish some element additional to the mere fact of re-litigation. But I think that the answer to Mr Stewart-Smith's submission is a simple one. Here the claimants tried to have their claim heard with the claims in the other proceedings but were prevented from doing so by Swire's successful application to have it struck out. In these circumstances it seems to me that the argument on abuse is no better or worse than the arguments for strike out based on delay and/or failure to apply to consolidate.
24.	Although the judge's decision was made in July, I think the situation has to be considered as it was in March or April 1999 when Axa gave notice of intention to proceed and Swire applied to strike out. Could it be said at that time that it was just or proportionate to strike out the whole claim having regard to what had gone before and the fact that there was due to be a trial of similar issues in October? I think it could not. Although Swire argue that even then it was too late for Axa to join the other actions, that cannot be right. Some further preparation on the part of Swire would obviously have been required but could, I am sure, easily have been accomplished within their preparation for trial of the other two claims. Considerable preparation would have been required on the part of Axa, but there was ample time for this. The fact that the application to strike out was not initially made on this basis tacitly acknowledges, I think, that these conclusions are correct. Moreover I think there is force in the criticisms made by Mr Cooke QC, counsel for Axa, of the judge's reasoning. I accept that disruption caused by late consolidation resulting from delay can amount to prejudice, but I think the judge made too much of this. Most of the things he identified would have resulted from consolidation whenever it occurred.
25.	So for these reasons I do not think that the judge's decision to strike out the whole claim can be upheld. Nevertheless but for Axa's delay their claim could and should have been heard at the October trial and the strike-out proceedings would not have happened. What can the court do to show its disapproval of the delay and protect Swire as far as possible from the consequences of the fact that they now face a further trial? First, it seems to me that Axa should pay the costs of the strike-out proceedings before the judge which they brought on their own head. Second, some of the allegations in their points of claim should be struck out so as to confine the scope of the further trial. There are a number of allegations which go wider than those made in the other proceedings and a number of identical allegations which were abandoned before or in the course of the other trial which I think, in fairness to Swire, should be struck out. Swire accepted that those allegations in their claim which went beyond the allegations in the other proceedings at the time of the hearing before the judge should be struck out, but that was the limit of their concession. I think this concession was too limited and that we should confine the allegations which they are entitled to make at the further trial to those allegations which remained at the end of the trial of the other proceedings. It follows on my analysis of the position from the pleadings that paragraphs 17, 20, 22(1) and 22(5) of the points of claim should be struck out.
26.	Mr Stuart-Smith invited us to order that Axa should be deprived of interest during the period of the delay and further that we should make some order now which gave Swire their costs in any event of the further trial. As to the first of these suggestions, I am not attracted by the idea of making some contingent order relating to interest, although clearly the court has power to make such an order. Again it does not seem to me that it would be right to make some contingent costs order now which binds the judge at the further trial if there is one. But in saying this, I should make it clear that the defendants should if necessary be able to argue at that trial that they should not have to bear the whole of the costs because this claim should have been consolidated and heard with the claims in the other proceedings.
27.	On those conditions, I would allow this appeal.
28.	LORD JUSTICE AULD: I agree that the appeal should be allowed and that the claimants should be penalised in costs and by confining the issues in the matter as proposed by my Lord. The appeal is therefore allowed.
29.	Order: Appeal allowed; no order for costs on the appeal.