Relief from Sanctions (CPR3.9)

July 8, 2015

 

In the words of the great man, Where Are We Now? [1]

It is around two years since the implementation of the reforms to the CPR researched, suggested, marshalled and implemented by Sir Rupert Jackson. 

The thrust of these reforms is that justice is no longer the central feature or objective of our civil justice system.  It remains a central feature, but only in the context of proportionality.  What does proportionality mean?  We are not sure yet, but that is undoubtedly the subject of a future article.

However one of the manifestations of Jackson’s thinking, if not one of the clearer, was his doing away with an old friend to civil litigators, a ‘checklist’ of criteria which the Court would apply when considering whether or not to grant relief from sanction.  If, for example, a party had been warned by an ‘unless’ order that unless it filed witness statements by a given date, its case would be struck out, that party would have to apply for relief from sanction to get back in the game.  The Court would then consider such specific questions as whether the application had been made promptly, whether the fault was predominantly that of the party or his legal team, and whether greater prejudice was caused to either party by granting or not granting that relief.

Whilst the aim was apparently to discourage recourse to the Courts, the new test was surprisingly more nebulous and less predictable in its outcome.  It says this:

(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need—
(a) for litigation to be conducted efficiently and at proportionate cost; and
(b) to enforce compliance with rules, practice directions and orders.
(2) An application for relief must be supported by evidence.

The power to strike out a statement of case for failure to comply with a rule, practice direction or court order was, of course, nothing new.  It was a feature of CPR3.4 which was unaffected by the reforms. 

However Jackson’s view was that it should be applied rigorously and robustly, as apparently is the case in Singapore, demanding a respect for judicial authority rather in the manner of Eric Cartman[2].  In his final report, Jackson had opined “courts at all levels have become too tolerant of delays and non-compliance with orders. In doing so, they have lost sight of the damage which the culture of delay and non-compliance is inflicting upon the civil justice system. The balance therefore needs to be redressed”[3].

In Mitchell v News Group Newspapers Ltd[4], Lord Dyson MR made a number of observations about how the new criteria under CPR3.9 ought to be applied.  It is well known that for the period between October 2013 and June 2014, litigators feared treading in the slightest crack in the pavement.  Although the judgment spoke of distinguishing trivial and other breaches, it offered little sympathy to the genuine oversight however unprejudicial its consequence.  In that case, Mr Mitchell’s solicitors had failed to file a costs budget (another Jackson innovation) seven days before his defamation claim had been heard and a Master had limited Mr Mitchell’s entitlement to costs to basic court fees.  The Court of Appeal upheld the Master’s decision.

As is equally well known, the rigour of that outcome was mitigated significantly by the application of the various decisions reported under the name Dentonv TH White Ltd[5].  The same Master of the Rolls offered a mollified version of his tests.  He said[6]that Mitchell had been correctly decided by him, but that he had been misunderstood.  He then offered a three stage test: an assessment of the seriousness of the breach, a consideration of the reason for the default and, in the round, how the case could be dealt with justly.

In Denton, Jackson LJ himself offered a slightly nuanced view of whether these three elements should be afforded equal weight, and observed:“the new rule 3.9 will not play any part in promoting access to justice at proportionate cost if it continues to generate satellite litigation on the present scale”[7].  It is less certain that he took personal responsibility for that outcome.

Whether or not it can be considered satellite litigation and whether or not Jackson would approve of it, there have been a series of reported cases on the application of the ‘new’ rule 3.9 sinceDenton, tending to indicate a more pragmatic approach which accommodates justice for the defaulting party alongside prejudice to the innocent party and respect for rules and orders.

There is little scope to consider all of the cases which have followed in and since 2014.  Amongst them are these:

Blemain Finance v Mukhtar[8]: a married couple’s failure to comply with a disclosure order was considered too serious for the grant of relief.

Robinson v Kensington & Chelsea[9]: a five day delay in filing an acknowledgement of service was not fatal to the Defendant’s defence.

Re. Bankside[10]: a response to a Part 18 request had been inadequate, but did not affect the progress of proceedings, such that relief should be granted in the interest of justice.

British Gas Trading v Oak Cash & Carry Ltd[11]: solicitors had filed a directions questionnaire instead of a listings questionnaire.  As there was no good reason for this mistake, and the trial date had been lost, so an order for relief (reinstating the defence) was overturned on appeal.

Avanesov v Shymkintpivo[12]: despite a company having established a defence with realistic prospects of succeeding, it was not permitted to defend the claim since it had not engaged with these proceedings until enforcement.  This is an example of the application of CPR3.9 case law by analogy in an application to set aside default judgment under the judicial discretion afforded by CPR13.3.

In Home Group v Matrejek[13], Sweeney J permitted the reinstatement of a possession claim when a landlord had provided a satisfactory explanation for its failure to attend a hearing and, the judge considered, justice required it.

Most recently, in Jance v Xposure Photo Agency Ltd[14], the Court considered the Defendant’s failure to file a directions questionnaire.  Again considering the explanation (that the Defendant, acting in person, had not understood what was required), the seriousness (the DQ itself is not innately a serious step, albeit that as it had not been filed, proceedings had stalled) and the overall justice, the Judge set aside an Order of DJ Langley at Central London who had struck the defence and counterclaim out and transferred the matter to IPEC for disposal.  As the matter would have to proceed anyway for damages to be assessed and the Defendant had raised genuine issues in its defence and counterclaim, the Judge concluded that setting aside the District Judge’s order would lead to a fairer outcome in what was in fact a claim and counterclaim of modest value.

The rigour perhaps anticipated by the Jackson reforms and following the decision in Mitchell, appears now to have abated slightly, and the amount of judicial discretion remaining permits judges to exercise a fair degree of common sense.  This has not led to the death of satellite litigation on these issues in favour of the predictability of strict enforcement, but it has scored a blow in favour of ‘dealing with cases justly’ as a persistent feature of our civil justice system.

 

[1] (2013) Bowie 08/01/13

[2] (2010) South Parkhttps://www.youtube.com/watch?v=k1vKDM7wfiA

[3] https://www.judiciary.gov.uk/wp-content/uploads/JCO/Documents/Reports/jackson-final-report-140110.pdf

[4] [2013] EWCA Civ 1537

[5] [2014] EWCA Civ 906

[6] At para.24

[7] Para.95

[8] (2014) Lawtel 31/10/14 QB

[9] (2014) Lawtel 04/11/14 QB

[10] (2014) Lawtel 17/11/14 ChD

[11] [2014] EWHC 4058 QB

[12] (2015) Lawtel 04/03/15 QB Comm

[13] [2015] EWHC 441 QB

[14] (2015) 19/03/15 IPEC

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