Jackson: white glove, iron fist

The last edition of Disease Aware featured Steven Gowland’s article ‘Don’t stop ‘til you’ve done enough – Jackson starts to dance’, a warning of the strict new rules for legal practitioners. Whilst no-one at Keoghs claims the gift of divination (just yet), Steven’s article was a clear warning of the legal sector’s first glimpse of the iron fist beneath the white glove.

In Mitchell v News Group Newspapers Ltd, Andrew Mitchell MP began proceedings against News Group International for defamation after an article published in the Sun Newspaper covering the so called ‘Plebgate’ scandal. The case was subject to CPR 51D (the Defamation Proceedings Costs Management Scheme). This provides that parties file costs budgets not less than seven days before the Case Management Conference (CMC) – a regime not dissimilar to that which now applies to most multi-track disease cases. Under the new rules any party in default will have costs limited to the cost of court fees.

Solicitors acting for the newspaper had filed their budget seven days before the hearing, but those for Mr Mitchell had waited until the day before the hearing to do so. The hearing was adjourned as a consequence and was re-listed - taking the place of one dealing with claims for asbestos-related diseases.

Master McCloud, sitting in the High Court, considered the delay a breach of the Practice Direction and the Overriding Objective. In particular, she cited the need to enforce the rules and to allot to any case an appropriate share of the court’s resources, while taking into account the need to allot time to other cases. Mr Mitchell’s potential costs entitlement was reduced from £506,425 to his court fees of just £1,350. Master McCloud conceded that had the application been made before the introduction of the Jackson reforms on 1 April then she would more than likely have granted relief. She granted leave to appeal.

The Court of Appeal (CoA) upheld the Master’s strict approach and said she had been right to focus on the essential elements of the post-Jackson regime. It supported her view that failure of solicitors was not in itself a good excuse and that such explanations would carry even less weight in the post-Jackson environment.

The Master of the Rolls, Lord Justice Richards, said: “Solicitors cannot take on too much work and expect to be able to persuade a court that this is a good reason for their failure to meet deadlines. They should either delegate the work to others in their firm or, if they are unable to do this, they should not take on the work at all.”

Whilst the court will still consider all the circumstances of a case, of paramount importance will be the need for litigation to be conducted efficiently and at proportionate cost and to enforce compliance with rules, practice directions and orders. The need for compliance is not limited to a single case, but the need to ensure and enforce compliance in the litigation process as a whole.

The Master of the Rolls also provided some guidance on when relief from sanctions would usually be granted. This included instances when the breach itself could be classed as trivial or if there was a good reason for it. ‘Trivial’ he said, could include a failure of form rather than substance, or where the party had narrowly missed the deadline imposed by an order, but had otherwise fully complied with its terms. A ‘good reason’ for non compliance was said to be likely to arise from circumstances outside the control of the party in default.

The court went on to say that it was using this case to send out a clear message in the hope that, “once it is well understood [the courts] will adopt a firm line of enforcement, litigation will be conducted in a more disciplined way and there should be fewer applications [for relief from sanctions].”

Comment

The CoA’s decision in Mitchell will no doubt have many solicitors leaping for their calendars to ensure that costs budgets are filed on time. The court has made clear its intention to enforce the Jackson reforms at the expense of any practitioner in breach of orders, no-matter how well-intentioned or innocent such a breach may be.

Mitchell deals primarily with the importance of filing costs budgets on time in order to avoid disastrous sanctions. Parties should prepare budgets at the earliest opportunity and not wait for the court to list a CMC. Costs budgets are not the only issue. The courts have changed their approach to directions in general, hoping that a focus on procedure and a readiness to use draconian sanctions will install a new culture within the profession.

Judgements which would have previously seemed unnecessarily harsh are now justified in service of a wider public interest and ensuring that justice can be achieved in the majority of cases. Justice in individual cases is of less importance than the need of the court to have regard to the needs and interests of all court users.

For a defendant in the new world of qualified one-way costs shifting, there is a clear opportunity present. Delay inevitably leads to increased costs in the litigation and greater efficiency can only be good news for the defendant. Where a claimant does delay, a defendant should consider very carefully whether extensions of time should be granted and the reasons for the request.

A claimant’s solicitor simply requesting extra time without compelling reason should not be indulged. The court is willing to take seemingly draconian steps. In the absence of recovering costs in successful defences, a hardline approach to court deadlines and seeking any appropriate sanction for a breach, offers some comfort to a defendant.

Equally however, it isn’t wise to comment on the splinter in the neighbour’s eye whilst there is a plank in your own. Effective diarising and case management are essential. Jackson’s sword cuts both ways.