Keoghs Insight


James Miller

Relief from Sanctions

Costs Aware Issue 3

There have been a number of interesting cases since the landmark judgment of Denton v White [2014] EWCA Civ 906 was handed down three years ago.  Although some judges have now distanced themselves from the draconian approach adopted in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537, it is important to remember that paragraph 41 of that judgment, which was approved by the Court of Appeal in Denton, remains “substantially sound”:  

“Overlooking a deadline, whether on account of overwork or otherwise, is unlikely to be a good reason…the need to comply with rules, practice directions and court orders is essential if litigation is to be conducted in an efficient manner. If departures are tolerated, then the relaxed approach to civil litigation which the Jackson reforms were intended to change will continue.”

Following Denton, when considering applications for relief from sanctions, the court will now consider:

  1. The seriousness of the breach;
  2. Why the breach occurred and whether there was good reason for it;
  3. All the circumstances of the case to enable the court to deal justly with any application.

In deciding Stage 3, the court must consider the two factors expressly set out in CPR 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.  The court will also have regard to the promptness of the application; any other relevant breaches and the explanation put forward.

Since Denton, there have been a number of examples where the courts have adopted a gentler stance such as  Murray v BAE Systems PLC, Liverpool County Court,( 17th February 2016) where HHJ Gregory considered the service of a budget two days late to be no more than an “insignificant” failure.  The budget was served 5 days before the case management conference and the litigation could be conducted efficiently and at proportionate cost notwithstanding the breach.

Similarly in Aruze East Midlands Ltd v Manchester Airport Group Property Developments Ltd [2014] EWHC 1644 (TCC), HHJ Grant held that filing a budget two days late was a “trivial breach” which was insignificant and inconsequential.  There was no prejudice to the defendant and relief from sanctions was granted.

However, as the cases below demonstrate, where there has been previous non-compliance with court orders or where granting relief would affect the administration of justice then the court is less likely to grant relief from sanction.

Schenk v Cook [2017] EWHC 144
A failure to comply with an “unless order” for disclosure was a serious breach where it came after a number of other breaches of court orders.
There was no good reason for the failure and the order was upheld, striking out defence.

Phelps v Button [2016] EWHC (Ch)
The claimant’s delay of over 10 years in listing the case for a quantum hearing coupled with the failure to comply with orders for disclosure had prejudiced the defendant and amounted to a serious breach. There was no explanation for the delay or the reason for non-compliance.

Eaglesham v Ministry of Defence [2016] EWHC 3011 (QB)
The failure to comply with an “unless” order against a background of failure to comply with disclosure obligations for more than a year amounted to a serious breach. Despite applying for an extension of time to comply with the order and relief from sanction before it was imposed, there was no adequate explanation for the delay.

Jamadar v Bradford Teaching Hospitals NHS Trust [2016] EWCA Civ 1001
The deliberate failure to serve a costs budget was a serious breach for which there was no good reason. The claimant deliberately decided not to file a budget despite repeated requests by the defendant.

British Gas Trading v Oak Cash & Carry Ltd [2016] EWCA Civ 153
Service of a pre-trial checklist occurred 2 days after the expiry of the “unless” order requiring service. The failure to serve the pre-trial checklist was a serious breach and illness of the fee earner’s spouse did not amount to a good reason where the firm was of sufficient size to provide appropriate cover.
The failure to apply for relief from sanction on the day of service was a critical factor as the original trial date was lost.

Keoghs Comment

Ultimately, litigators should remain vigilant and always ensure compliance with rules, practice directions and court orders.  In a bad case where there is no good excuse and disruption to the litigation, it is highly likely that relief from sanctions will be refused.