Strike Out - When a Claim Shouldn't Even Go to Trial

There’s a distinction in litigation between cases that are weak and those which have no hope whatsoever. 

There is a difference between a case you might lose and a case that was never properly a case in the first place. A case you do not agree with does not mean it is a bad case, but a case that has no legal basis is a case that should never have been brought at all. 

Summary judgment, which I wrote about recently here, deals with the former — a claim or defence with no real prospect of success on the facts.

Strike out deals with something more fundamental. It’s the court’s power to remove a statement of case entirely, before the parties spend time and money on a process that was always going in one direction.

Understanding which tool applies, and when, is one of the more practically valuable things a disputes solicitor can offer.

What strike out actually is

The court’s power to strike out a statement of case sits in CPR Rule 3.4. It applies in three main situations: where the claim discloses no reasonable grounds for bringing it, where it’s an abuse of the court’s process, or where there’s been a failure to comply with a rule, practice direction or court order.

The first of those is the one that matters most in commercial disputes. No reasonable grounds. Not weak grounds, not grounds that face an uphill battle — grounds that don’t amount to a legally recognisable claim at all.

That’s a high bar. Courts are reluctant to shut the door on a claimant before they’ve had their day in court, and applications that are really about the merits rather than the legal sufficiency of the claim tend to get redirected toward Part 24 instead. When the application is genuinely about whether the claim is legally coherent — whether it discloses something the court can actually adjudicate — strike out is the right mechanism.

The investment dressed as a loan

I’m currently instructed in a director dispute where this is live right now. The claim as pleaded is for repayment of a loan. The problem — and it’s a fundamental one — is that the contemporaneous documents from the time the money changed hands don’t support that framing at all. What those documents show is an investment. That’s how it was recorded, that’s how it was understood by the parties, and that’s what the paperwork reflects. The investment didn’t pay off. That's life, it happens - but it does not mean you can re-categorise the transaction to something that is more convenient legally. 

That’s a commercial disappointment. It isn’t a debt.

Re-characterising a failed investment as a recoverable loan after the fact is not a novel idea — it surfaces in director disputes with some regularity, usually when a relationship has broken down and one party is looking for a mechanism to recover money they’ve lost. The difficulty is that courts look at what actually happened, not what the claimant now wishes had happened. And what actually happened is usually documented.

If the paperwork from the time treats the payment as an investment — if that’s how it was recorded in the accounts, described in correspondence, understood by the parties — then the loan claim isn’t just weak, it’s fundamentally misconceived. The legal basis simply isn’t there.

That’s a strike out application.

Why the distinction from summary judgment matters

The two applications are related but they’re not the same, and the distinction has practical consequences.

Summary judgment says: here are the facts, and on those facts you can’t win. Strike out says: even if everything you’re asserting is true, you haven’t disclosed a claim the law recognises.

In the investment/loan scenario, the argument runs across both. The documents contradict the loan framing — that’s a summary judgment point. But there’s also a prior question: is a claim for loan repayment, built entirely on a recharacterisation of what the parties clearly understood to be an investment at the time, actually a coherent legal claim at all? If the answer is no, you don’t need to get into the factual dispute. You can end it sooner.

Good commercial litigation involves identifying which argument to run first, and why. Sometimes you run both in the alternative.

The same costs logic applies

Everything I said about costs in the summary judgment piece applies here. A failed strike out application will almost certainly result in a costs order against you. That’s the price of asking the court to take an early view, and it’s a real consideration.

At the same time, the same strategic dynamic exists. A well-constructed strike out application — one that clearly articulates why the claim is legally incoherent, not just factually difficult — changes the litigation landscape. The claimant’s solicitors have now seen the argument in full. They know what’s coming. They’ve had to advise their client on the prospects of surviving it.

In a case where a party is pursuing something they’ve reframed with the benefit of hindsight, that can be exactly the moment a realistic settlement conversation becomes possible.

The practical question

If you’re facing a commercial claim and something doesn’t feel right about the legal basis of it — not just the facts, but the underlying theory — it’s worth asking whether the claim actually holds together as a matter of law.

That’s a different question from whether you have a good defence. It’s a prior question and, in some cases, it’s the question that matters most.

Sometimes a claim isn’t just weak. Sometimes it shouldn’t have been brought at all. A solicitor who spots that early, and acts on it decisively, can save a client a significant amount of time, money and disruption.

Chris is always happy to discuss these situations with you, even if you’re just looking for a sense check, Click below to arrange a call.