Relief from sanctions following Mitchell

Ever since the Jackson reforms of April 2013, the legal industry has been waiting to see how strictly the courts would enforce the new provisions of the Civil Procedure Rules dealing with non-compliance of court orders and directions.

A key part of the answer came in the form of Conservative MP Andrew Mitchell’s defamation claim against News Group Newspapers. The Court of Appeal (CoA) took a strict and robust stance in respect of a default and imposed a sanction on Mitchell limiting his costs budget to court fees.

The facts

The claimant’s solicitors sent their costs budget to the defendant and the court one day before a case management hearing, in contravention of the court rules which require the costs budget to be filed at least seven days in advance of the hearing.

In seeking relief from sanctions arising from the breach of the rules, the claimant’s solicitors explained that the reason for this delay was due to a shortage of staff and a high volume of work in the firm in the period leading up to the date on which the costs budget was due to be filed.The High Court decided to restrict the claimant’s costs to court fees only and this was appealed by his solicitors to the CoA.

The decision

Giving judgment on the appeal, Lord Dyson was critical of the reasons given by the claimant’s solicitors for their oversight. He stated that the efficiency of the justice system was paramount and this was not an adequate reason for default. Firms should manage their workload by maintaining appropriate staffing levels and delegating work - or not take on the work at all.

The court formulated a two stage test in order to make this decision. This test provides judges with an element of discretion in deciding the seriousness of a default:

1. Was the default trivial?
2. If not, was there a good reason for the default?

Lord Dyson decided that this default was not trivial as it provided little time for the defendant to review the budget and he therefore refused to overturn the High Court decision. He stated: “If we were to overturn the decision to refuse relief, it is inevitable that the attempt to achieve a change in culture would receive a major setback. In the result, we hope that our decision will send out a clear message.”

The application of Mitchell

In general, the courts have followed the guidance given by Lord Dyson and have backed up his strict stance. Most recently, in a case involving the sprinter Linford Christie, the county court ruled that his costs should be limited to court fees despite the budget only being one day late. The district judge in this matter ruled that this was not trivial, despite only being a very small delay. Such robust rulings have led to criticisms within the legal industry that this new approach is too severe.

Some commentators are of the opinion that the ‘punishment does not fit the crime’ and there is a risk that the interests of justice are becoming of secondary importance to the strict application of the Civil Procedure Rules. A clear example of such concerns is found in the case of Durrant v Chief Constable of Avon and Somerset 2013. In Durrant, the CoA refused to allow the defendant witness statements to be entered as evidence because they had been served significantly late. This overturned the decision by the High Court, who allowed the evidence to be entered despite the delay.

The CoA decided that there was a history of delays on the part of the defendant during the litigation and that any further delay could have the potential to affect the timetable of this case and other cases. This refusal was an important decision as the case involved serious allegations against the police officer defendants, including false imprisonment and racial targeting. The police officers will now be unable to give any evidence in response to the allegations. This case demonstrates that the courts are prepared to make strict rulings, even in the most serious cases.

In Durrant, the CoA followed the principles set out by Lord Justice Jackson and Lord Dyson in Mitchell. However, this approach has come at significant cost to the defendants. A trial judge will not now be able to hear important evidence from the defendants which may otherwise have affected final judgment. The judgment in this case may have a serious adverse effect on the defendants’ livelihoods.

There are, however, examples of the courts taking a different approach. In Aldington v ELS International lawyers LLP (in Admin) 2013, the High Court made an Unless Order that eight individual sets of Particulars of Claim be filed and served by a specified date. When this did not happen, the claims were immediately struck out in default. The claimant’s solicitors stated that some of the claimants had been on holiday and were unable to sign the documents. Surprisingly, given the judgment in Mitchell, the court granted relief on appeal. They stated that the default had been trivial and was one, “of form rather than substance.” The judge found there to be no negative effect on either defendant and that the fact the claimants were away was out of the solicitor’s control.

Most importantly, the judge decided that the case need not be exceptional for relief to be granted. He stated that: “the relationship between justice and procedure has not changed so as to transform rules and rule compliance into trip wires.” This statement is likely to become important for future decisions and debate on this matter. In two recent matters handled by the commercial litigation team at Keoghs, the claimants had not complied with the respective court orders. In both cases, the court adopted the more lenient approach to the defaulting claimants.

The first matter involved a litigant in person and so perhaps, was an unsurprising decision. This individual was required to serve and file numerous documents including a costs budget. This documentation was produced late. However, the court decided not to apply any sanctions against the claimant. With the large increase of claims involving litigants in person, the courts are more likely to be lenient where they are involved given their potential lack of legal knowledge.

The second matter involved the late filing of trial bundles in the Technology and Construction Court. The bundles were late by one day and informal guidance given by the court was that no adverse action would be taken unless this affected the trial judge’s preparation time. This suggested that a one or two day delay would be considered trivial. Whilst this was informal guidance, it does provide some indication as to the response a court may take to a formal application made to attempt to impose sanctions in similar circumstances.

It is likely that the common sense approach will be continued by some judges and courts. The Mitchell decision has given some discretion to judges to decide on whether the default is ‘trivial.’ Furthermore, the judgment in Aldington provides potential applicants with an argument if they are to make an application for relief. It is important, as in Aldington, that the courts take into consideration the interests of justice along with the breach of any rules. Where possible, it is preferable for a matter to be decided on the best possible evidence rather than a basic breach of the rules.

Whilst this is the case, it would not be prudent for a practitioner to rely on arguments that any default passes the Mitchell test and should not be subject to sanction. It is therefore vital that court orders are complied with correctly. If this is impossible, then an application for an extension should be made before a deadline has passed and with as much notice as possible. The courts are more likely to be accommodating if this is the case.

When considering the decision in Mitchell, it may be tempting for the innocent party to make an immediate application for any relevant sanction on default. However, care must be taken when using this approach. As in Aldington, some judges may not look kindly on any attempt to use a rule as a ‘trip wire’ in order to trap the opposition. This would be especially relevant with an unrepresented party. The indication provided to us by the Technology and Construction Court was useful in determining this point, however, this guidance needs to be considered alongside any prejudice which may also be caused to the innocent party.

An application made in haste or without proper consideration may cause the court to criticise the innocent party. Therefore, the circumstances must be evaluated carefully and any breach should be more than trivial and cause prejudice on both the court and the opposing parties before any application is made.