Relief from sanction - a change in approach?
Disease Aware Issue 6
CPR Rule 3.9 states:
(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:
- for litigation to be conducted efficiently and at proportionate cost; and
- to enforce compliance with rules, practice directions and orders.
(2) An application for relief must be supported by evidence.
The story starts with the well known Court of Appeal decision in Mitchell v News Group Newspapers  EWCA Civ 1537. This set out a three stage test:
- 1. Was the breach trivial or significant?
- 2. Was there a good reason for it?
- 3. In all the circumstances of the case, should relief be granted?
Further guidance from Denton and Others v TH White Ltd and Others CA  EWCA Civ 906.
The Court of Appeal again supported a three stage test. The guidance to be adopted was slightly different from Mitchell:
- The court should consider whether the non-compliance is ‘serious or significant’
- The court should consider why the non-compliance occurred. Was there a reasonable excuse?
- The court must consider "all the circumstances of the case".
The first test is seen as a departure from Mitchell as it disposed of the test of ‘triviality’ which the court noted had given rise to difficulty in its application. The second test seems to be the same as Mitchell.
As to the third test, the court stressed the two factors expressly set out in CPR r. 3.9 - the need for litigation to be conducted efficiently and at proportionate cost, and the need to enforce compliance with rules, practice directions and orders.
These factors should be given particular - though not paramount - importance.
The court warned that parties should not opportunistically or unreasonably oppose applications for relief. Parties should agree reasonable extensions up to 28 days. The courts would be ready to penalise opportunism and unreasonably contested applications for relief.
Recent cases in practice
Three recent judgments have sought to apply the Court of Appeal’s guidance - Robinson v Kensington and Chelsea  EWHC, Blemain Finance Ltd v Mukhtar & Osman  EWHC 4259 (QBD), and British Gas v Oak Cash and Carry  EWHC 4058 (QBD).
In Robinson the claim form was defective as it did not provide particulars of claim. A stay was ordered. The defendant then received service when its legal officer was out of the office and the acknowledgement of service was served five days late. Judgment had already been entered in default.
The court held that the failure to serve the acknowledgment of service in time was, in these particular circumstances, not serious. The process had already been delayed by the claimant’s difficulties in issuing proceedings.
In Blemain, the claimant obtained an order for specific disclosure, which the defendants failed to adhere to. The defendants then did not attend the trial. The defence and counter-claim were struck out.
The court found that the judge in the first instance was justified in refusing the defendant’s application for relief from sanction. The defendant’s failure to comply with an order for disclosure and failure to attend trial were serious.
There had been no good reason for the default. The judge had had full and appropriate regard to all the circumstances as required under CPR r. 3.9.
In the British Gas case the defendant failed to file a listing questionnaire. The court ordered that unless the defendant filed the listing questionnaire by 19 February, the defence would be struck out.
On 18 February, the defendant’s solicitors filed a directions questionnaire but not a listing questionnaire.
On being told that they had filed the wrong document the defendant’s solicitors filed a listing questionnaire by fax on 21 February.
Default judgment was entered. The defendant’s solicitor’s application for relief from sanctions was granted. The claimant appealed.
The court applied the Denton approach to the facts of the case. Mrs Justice McGowan DBE noted that:
- The defendant’s solicitors had failed to comply with the original order as well as the unless order and so, “it cannot be said that such a breach is not either serious or significant. This was not only the failure to comply with a directions order but also a failure to comply with the unless order”
- There was no good reason for the failure – although the solicitor with conduct was experiencing personal difficulties the firm was of significant size with over 40 qualified solicitors. This could not be a good reason for a failure to comply with the original order
- Although the listing questionnaire may not be the most important document, the persistent failure to provide it meant that the trial listing was lost, which was a matter of grave concern. The court accepted that the effect of the defendant not receiving relief from sanctions would lead to satellite litigation in similar circumstances. There was still no good reason to grant relief from sanctions. The claimant’s appeal succeeded.
The guidance from Denton and the subsequent cases should foster more co-operation between parties, removing the point scoring and satellite litigation stemming from the decision in Mitchell.
Where the breach is minimal or will have a limited effect on the opposing party then an application for relief may well succeed. Where non-compliance is serious or significant and has occurred for no good reason, the court should take a robust approach.