The New Litigation Landscape – Obtaining Relief

This paper ^_[3] considers how we arrived at the reforms, the test for relief from sanctions and how recent caseshave watered down the ‘blood on the floor’ effect of reform. The thesis is that once an admiral has been shot for the encouragement of others, things swiftly return to something approximating how they were before.

A moment of nostalgia
“Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy.” Smith v Cropper(1885) 26 Ch D 700 per Bowen LJ.

The purpose of reform
“The tougher more robust approach to rule compliance and relief from sanctions is intended to ensure that justice can be done in the majority of cases. This requires an acknowledgement that the achievement of justice means something different now.”
Lord Dyson MR, 18th Jackson Implementation Lecture at paragraph 27. ^[4]

“Courts at all levels have become too tolerant of delays and non-compliance with orders. In so doing they have lost sight of the damage which the culture of delay and non-compliance is inflicting upon the civil justice system.”
Sir Rupert Jackson, Final Report, Chapter 39 at paragraph 6.5. ^[5]

The rule
3.9  Relief from sanctions
(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 dead admiral
“The merit of the rule is that it sets out a stark and simple default sanction. The expectation is that the sanction will usually apply unless (i) the breach is trivial or (ii) there is a good reason for it. It is true that the court has the power to grant relief, but the expectation is that, unless (i) or (ii) is satisfied, the two factors mentioned in the rule will usually trump other circumstances. If partial relief were to be encouraged, that would give rise to uncertainty and complexity and stimulate satellite litigation.” Mitchell v News Group [2014] 1 WLR 795 per Lord Dyson MR at [58].

Rowing back
“It must not be overlooked that the Court of Appeal in Mitchell did not say that the two factors specified in CPR 3.9 will always prevail, as a matter of weight, over any other circumstances in a case where the default is not trivial and where there is no good justification. It is true that it later stated that the expectation is that the two factors mentioned in CPR 3.9 will “usually” trump other circumstances. But it did not say that they always will. That, with respect, must be right. It must be right just because CPR 3.9 has required that all the circumstances are to be taken into account and has required that the application be dealt with justly.”
Chartwell Estate Agents Ltd v Fergies Properties SA & anor [2014] EWCA Civ 506 per Davis LJ at [57].

Trivia
“It is perhaps also appropriate to refer to a short part of the paper delivered by Jackson LJ at the recent conference held on 21 March 2014 by the Civil Justice Council on the impact of the Jackson reforms. In paragraph 3.9 of that paper, having referred to the decision of the Court of Appeal in Mitchell, Jackson LJ wrote: ‘Nevertheless parties should not be allowed to exploit trivial or insignificant breaches by their opponents’.”
Wain v Gloucestershire County Council [2014] EWHC 1274 (TCC) per Judge David Grant sitting as a Deputy High Court Judge at [7].

A defendant served a costs budget a day late, which was considered to be trivial. Relief from sanctions was granted.

The new test
In Denton v TH White Ltd, Decadent Vapours Ltd v Bevan and Utilise TDS Ltd v Davies [2014] EWCA Civ 906 Lord Dyson MR and Vos LJ, in a joint judgment, set out a three-stage test to be applied to any application for relief:

1) The Court should “identify and assess the seriousness of the failure to comply with any rule, practice direction or court order which engages rule 3.9(1)”;
2)  The Court should consider why the default occurred; and then
3) The Court should “evaluate all the circumstances of the case, so as to enable [the court] to deal justly with the application including [factors (a) and (b)]”

Discouraging opportunism
Lord Dyson MR and Vos LJ explicitly seek to dissuade parties from engaging in satellite issue on the question of relief from sanctions, and warn of the costs consequences to parties who attempt to seek a windfall from non-serious and insignificant breaches:

[42] 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.
[43] The court will be more ready in the future to penalise opportunism. The duty of care owed by a legal representative to his client takes account of the fact that litigants are required to help the court to further the overriding objective. Representatives should bear this important obligation to the court in mind when considering whether to advise their clients to adopt an uncooperative attitude in unreasonably refusing to agree extensions of time and in unreasonably opposing applications for relief from sanctions. It is as unacceptable for a party to try to take advantage of a minor inadvertent error, as it is for rules, orders and practice directions to be breached in the first place. 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.

It should be noted that, in the writer’s experience, judges are not keen to award costs for successful 3.9 applications even when this part of the judgment is brought to their attention. In the post-reformlandscape relief is rarely guaranteed, and thus opposition can infrequently be characterized as purely opportunistic.

Failure to sign a disclosure statement
Prince Abdulaziz v Apex Global Management Ltd [2014] UKSC 64 (heard October, judgment on 26th November 2014) ^[6] per Lord Neuberger at [29]:

“In my view, the strength of a party’s case on the ultimate merits of the proceedings is generally irrelevant when it comes to case management issues of the sort which were the subject matter of the decisions of Vos J, Norris J and Mann J in these proceedings. The one possible exception could be where a party has a case whose strength would entitle him to summary judgment.”

Failure to file a notice of appeal in time
R (ex p Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633, December 2014 per Moore-Bick LJ at [44]:

“Being a litigant in person with no previous experience of legal proceedings is not a good reason for failing to comply with the rules”

and at [46]:

“If applications for extensions of time are allowed to develop into disputes about the merits of the substantive appeal, they will occupy a great deal of time and lead to the parties’ incurring substantial costs. In most cases the merits of the appeal will have little to do with whether it is appropriate to grant an extension of time. Only in those cases where the court can see without much investigation that the grounds of appeal are either very strong or very weak will the merits have a significant part to play when it comes to balancing the various factors that have to be considered at stage three of the process. In most cases the court should decline to embark on an investigation of the merits and firmly discourage argument directed to them.”

Failure to file a listing questionnaire
British Gas Trading Ltd v Oak Cash & Carry Ltd [2014] EWHC 4058 (QB) Solicitors accidentally filed a directions questionnaire rather than a listing questionnaire following an unless order. The court considered this to be a serious and significant breach. The solicitor’s wife was ill, it was a big firm and he should have delegated. Having regard to the circumstances, delay had major impact. Trial date was lost and satellite litigation might be required. Per McGowan J at [18]:

“There must be provision for those who have the responsibility of conducting litigation who know that they may not be available because of an ongoing medical problem to delegate the work to others who have sufficient experience and skill to ensure that tasks are properly completed. It appears clear in this case that it was not until about the time that the “unless” order was issued, that the solicitor with conduct of the case delegated the task of complying with the order to a trainee solicitor.”

No acknowledgement of service
Talos Capital Ltd v JCS Investment Holding XIV Ltd [2014] EWHC 3977 (Comm), 21 November 2014, Flaux J.
CPR 3.9 applied, as there was an implied sanction. An extension of time to acknowledge service and challenge the jurisdiction was refused where the delay appeared to be deliberate and tactical.

Late submission of costs statement
Group M UK Ltd v Cabinet Office [2014] EWHC 3863 (TCC), November 2014
Interested party failed to comply with the practice direction, the Claimant submitted that the interested party should be penalized for late submission. Whether disproportionate to deprive interested party of costs for late submission. Per Aikenhed J at [16]:

“I consider that, although there was a breach, it would be disproportionate to disallow the whole of this amount when the cost to Group M flowing from the non-compliance must be minimal”

Witness statement a year late
Coal Hunter v Yusho Regulas [2014] EWHC (Admiralty). Mr Justice Teare allowed the claimant to rely, in part, upon a factual witness evidence a year late. A year after the deadline for exchange, shortly before trial, the Claimant sought permission to adduce a witness statement from the pilot to a vessel. The judge applied Denton:

Was the breach serious or significant? Yes. The witness statement ought to have been served a year previously and the trial was less than two weeks away.
Why did the default occur? Nobody had thought to obtain the statement. The delay was entirely on the claimant’s side.
Consider all of the circumstances of the case in order to deal with the application justly, including, in particular, (a) the need for litigation to be conducted efficiently and at proportionate cost and (b) the need to enforce compliance with rules, directions and court orders.

Teare J allowed in the parts of the pilot’s statement dealing with navigation. At [47]:

“In circumstances where the navigation of a vessel and the pilotage is an issue and where the claim is substantial as it is here and where the pilot is available to give evidence, it seems to me that in all probability a just determination of the case by the admiralty court requires the evidence of the pilot as to navigation to be heard.”

No full response to a request for further information
Bankside Hotels Ltd v Gourgey [2014] EWHC 4440 (Ch) before Mr S Monty QC sitting as a Deputy Judge of the Chancery Division. Failure to reply fully was serious and significant, it disrupted the litigation. Unrelated failures to comply should not be considered when assessing the seriousness or significance of the breach; these are part of the overall circumstances step. This repeated comments made in Denton at [27]. Per Monty QC at [62]:

“An insistence on enforcing compliance with court orders in circumstances where there is no evidence of any substantial effect on the litigation and where it could not be said that as a result of non-compliance a trial has been put in jeopardy is in my view not the right approach. It is expressly not so in the light of the Court of Appeal’s judgment in Denton. To do so would be to ignore the need to deal with a case justly bearing in mind that the effect of refusing relief would be to prevent the respondents from defending these petitions. In my view it would not be just, fair or proportionate to refuse relief.”

Witness evidence 20 days late
Al Hamadani v Al Khafaf [2015] EWHC 38 (QB).  The Claimants served witness evidence and a transcript 20 days after the deadline. The Court, applying Denton, considered the failure to comply with a deadline for service of witness statements was a serious and significant breach. Warby J granted relief at [19]:

“Failure to comply with a deadline for service of witness statements is a serious and significant breach. Where the parties wish, as experience shows quite commonly they do, to avoid incurring litigation costs whilst engaging in settlement discussions the proper course is to seek an extension of time from the court, before the deadline expires. In that way the court retains control over the process and can guard against the risk that one or both of the parties may lose sight of the need to exchange or serve statements in good time before the trial or other hearing. That is what should have happened here. Nonetheless, in this case the delay was slightly less than three weeks and, more importantly, the evidence was served more than two months before the trial. Mr Sabri was by that stage debarred from taking part in the trial by virtue of paragraph 1 of the Master’s Order, but could in principle have made an application for relief from that sanction. Service on 7 November 2014 gave him an opportunity to assess the totality of the evidence well in advance of trial and to make such an application if so advised. The orderly and proportionate progress of the litigation was not threatened. In my judgment it was just to relieve the claimants from sanctions.”

“Plus ça change, plus c’est la même chose” ^[7]

To be put in contact with Rupert Myers about your case, please contact the EA Law – East Anglian Chambers clerking team on 01473 214481.

Notes :
1  “Parkinson’s Law” – Cyril Northcote Parkinson, naval historian, in a 1955 essay for The Economist http://www.economist.com/node/14116121
2  Trans. “In this country, it is thought well to kill an admiral from time to time, in order to encourage the others”.  A line from Voltaire’s novel Candide, immortalizing the court-martial and subsequent execution in 1757 of Admiral Byng for “failure to do his utmost” to save the British garrison on Minorca.
3  Notes from a speech first given to the Norfolk & Norwich Law Society on 19th February 2015.
4  Delivered at the District Judges’ Annual Seminar, 22nd March 2013 http://www.judiciary.gov.uk/wp-content/uploads/2014/10/mr-speech-judicial-college-lecture-2013-1.pdf
5  http://www.judiciary.gov.uk/wp-content/uploads/JCO/Documents/Reports/jackson-final-report-140110.pdf
6 https://www.supremecourt.uk/decided-cases/docs/UKSC_2014_0208_Judgment.pdf
7  Jean-Baptiste Alphonse Karr (1849) : “The more it changes, the more it’s the same thing”.