I have gone
on and on here about the insanity that followed the Court of Appeal decision in
Mitchell v News Group Newspapers towards the end of last year. The madness was summed up
by one insurance spokesman who commented that we no longer had a clue what we
were doing!
Cases worth thousands of pounds were being struck out because of documents being filed a few days late. This all
led to the bizarre and chaotic situation where solicitors were becoming so
afraid of missing deadlines, however minor, that they had no choice but to
issue application after application to extend time limits.
So there
were sighs of relief on Friday as the Court of Appeal including Dyson LJ, who
gave the Mitchell judgment, and Jackson LJ, he of the eponymous ‘reforms’, told
us that enough was enough. The chaos was not caused by the Mitchell judgment
itself. It was all a misunderstanding by judges who had been over enthusiastic in
their draconian interpretation.
The Appeal
judges heavily criticised the opportunism of parties who had used the judgment
to their advantage. In future they can expect o be heavily penalised in costs
if they refuse reasonable requests for extensions of time.
The judges
laid out some guidelines for courts dealing with failure to comply with
directions.
They have
set out a 3 stage approach to such applications. Rather than summarise them I have
set them out below for future reference. This is not quite returing us to planet earth but is certainly a very positive development. I do wonder what happens now to the claims being pursued against lawyers in relation to claims struck out due to the judicial 'misunderstanding'. I see some litigation ahead on that one!
The full judgment is available here –
1. The seriousness of the breach
“It seems that the word “trivial” has given rise to some difficulty. For
example, it has given rise to arguments as to whether a substantial delay in
complying with the terms of a rule or order which has no effect on the
efficient running of the litigation is or is not to be regarded as trivial.
Such semantic disputes do not promote the conduct of litigation efficiently and
at proportionate cost. In these circumstances, we think it would be preferable
if in future the focus of the enquiry at the first stage should not be on
whether the breach has been trivial. Rather, it should be on whether the breach
has been serious or significant…”
“We therefore prefer simply to say that, in evaluating a breach, judges
should assess its seriousness and significance. We recognise that the concepts
of seriousness and significance are not hard-edged and that there are degrees
of seriousness and significance, but we hope that, assisted by the guidance
given in this decision and its application in individual cases over time,
courts will deal with these applications in a consistent manner.”
2.The reason for the breach
“The second stage cannot be derived from the express wording of rule 3.9(1), but it is nonetheless important particularly where the breach is serious or significant. Thecourt should consider why the failure or default occurred: this is what the court said in Mitchell at para 41. It would be inappropriate to produce an encyclopedia of good and bad reasons for a failure to comply with rules, practice directions or court orders. Para 41 of Mitchell gives some examples, but they are no more than examples.”
3. Opportunism
“The important misunderstanding that has occurred is that, if (i) there is a non-trivial(now serious or significant) breach and (ii) there is no good reason for the breach, the
application for relief from sanctions will automatically fail. That is not so and is not
what the court said in Mitchell: see para 37. Rule 3.9(1) requires that, in every case,the court will consider “all the circumstances of the case, so as to enable it to deal justly with the application”.
“Thus, the court must, in considering all the circumstances of the case so as to enable it
to deal with the application justly, give particular weight to these two important
factors. In doing so, it will take account of the seriousness and significance of the
breach (which has been assessed at the first stage) and any explanation (which has
been considered at the second stage). The more serious or significant the breach the
less likely it is that relief will be granted unless there is a good reason for it. Where
there is a good reason for a serious or significant breach, relief is likely to be granted.
Where the breach is not serious or significant, relief is also likely to be granted.
But it is always necessary to have regard to all the circumstances of the case.”
“We are concerned that some judges are adopting an unreasonable approach to rule
3.9(1)”
“It seems that some judges are approaching applications for relief on the basis that,
unless a default can be characterised as trivial or there is a good reason for it, they are
bound to refuse relief. This is leading to decisions which are manifestly unjust and
disproportionate.”
“Litigation cannot be conducted efficiently and at proportionate cost without (a)
fostering a culture of compliance with rules, practice directions and court orders, and
(b) cooperation between the parties and their lawyers. This applies as much to
litigation undertaken by litigants in person as it does to others. This was part of the
foundation of the Jackson report. Nor should it be overlooked that CPR rule 1.3
provides that “the parties are required to help the court to further the overriding
objective”. Parties who opportunistically and unreasonably oppose applications for
relief from sanctions take up court time and act in breach of this obligation.
We think we should make it plain that it is wholly inappropriate for litigants or their
lawyers to take advantage of mistakes made by opposing parties in the hope that relief
from sanctions will be denied and that they will obtain a windfall strike out or other
litigation advantage. In a case where (a) the failure can be seen to be neither serious
nor significant, (b) where a good reason is demonstrated, or (c) where it is otherwise
obvious that relief from sanctions is appropriate, parties should agree that relief from
sanctions be granted without the need for further costs to be expended in satellite
litigation. The parties should in any event be ready to agree limited but reasonable
extensions of time up to 28 days as envisaged by the new rule 3.8(4).”
“It should be very much the exceptional case where a contested application for relief
from sanctions is necessary. This is for two reasons: first because compliance should
become the norm, rather than the exception as it was in the past, and secondly,
because the parties should work together to make sure that, in all but the most serious
cases, satellite litigation is avoided even where a breach has occurred.”
“Heavy costs sanctions should, therefore, be imposed on parties who
behave unreasonably in refusing to agree extensions of time or unreasonably oppose
applications for relief from sanctions. An order to pay the costs of the application
under rule 3.9 may not always be sufficient. The court can, in an appropriate case,
also record in its order that the opposition to the relief application was unreasonable
conduct to be taken into account under CPR rule 44.11 when costs are dealt with at
the end of the case. If the offending party ultimately wins, the court may make a
substantial reduction in its costs recovery on grounds of conduct under rule 44.11. If
the offending party ultimately loses, then its conduct may be a good reason to order it
to pay indemnity costs.”
www.eadsolicitors.co.uk
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