The High Court has clarified the Mitchell ruling when applied to cases where a short delay in providing security for costs is used as a ‘tactical advantage’ for defendants.
In November 2013 the Court of Appeal’s Mitchell ruling established a strict approach to non-compliance with costs rules.
Consequently the defendants in the case Summit Navigation Ltd v Generali Romania Asigurare Reasigurare SA said the case could not continue as the claimants had missed the security cost deadline by one day.
Summit Navigation provided security costs at 10am on the morning after the 4pm deadline on 5 December 2013.
Mr Justice Leggatt said: ‘The reliance placed on Mitchell in this case has had the very consequences which the new approach enunciated by the Court of Appeal in Mitchell is intended to avoid.’
Leggatt lifted the stay and a fresh trial will begin on 7 July in the Commercial Court.
He said the Mitchell case has rightly been called a ‘game changer’ but added: ‘It is important for litigants to understand, however, how the rules of the game have been changed and how they have not.’
He said: ‘The defendants in this case have sought to rely on Mitchell to turn to their tactical advantage a short delay by the claimants in providing security for costs which in itself had no material impact on the efficient conduct of the litigation.’
Leggatt said he put his reasons in writing, ‘in the hope of discouraging other litigants from making similar arguments to those made by the defendants in this case, with similar disruptive consequences’.
James Watthey, barrister at Hardwicke Chambers representing the claimants Summit Navigation, said: ‘Today’s judgment is likely to be met with relief amongst solicitors and copied by other High Court judges who are keen to distinguish Mitchell from the circumstances of other cases before them, on the basis that the sanction in question is of a different and less harsh nature.’
He said: ‘If anyone thought that Mitchell meant they could now cry foul and sit back while a trial timetable was wholly derailed, they were wrong – and Leggatt J has made that quite clear.’