The Court of Appeal’s updated guidance on non-compliance seeks to restore sanity to the litigation world. But only time will tell if it does.
Like a naughty child, the Court of Appeal’s decision in Andrew Mitchell MP v News Group Newspapers LTD was simply misunderstood.
Misunderstood to the extent that just over seven months later the court, headed again by Dyson MR, felt the need to backpedal furiously in the conjoined appeals in Denton & Ors v TH White, Decadent Vapours Ltd v Bevan & Ors, and Utilise TDS Ltd v Davies & Ors.
Apparently, judges adjudicating upon applications for relief felt that if a breach were not trivial or there were no good reason for it then they were bound to refuse relief, leading to decisions which were, in the words of Lord Dyson, ‘manifestly unjust and disproportionate’.
It seems that Dyson MR and Richards and Elias LJJ were the only people who did not foresee the chaos their judgment would unleash.
In Denton the court sought to restore a modicum of sanity to the legal world. The onus is now on the party opposing relief to show that the default is serious and significant rather than, as under Mitchell, for the defaulting party to show that it is trivial.
The two factors listed in CPR 3.9 – the needs to conduct litigation efficiently and at proportionate cost and to enforce compliance with rules, practice directions and orders – are no longer paramount but must be given ‘particular weight’. Jackson LJ dissented strongly on this point saying that these were two factors that the court had to consider but the weight to be attached to them was a matter for the court having regard to all the circumstances.
In an attempt to encourage parties to co-operate Dyson MR stated that in future unreasonable and opportunistic refusals to agree extensions of time and opposition to applications for relief will attract very heavy costs penalties, up to and including the award of indemnity basis costs against the offending party or sanctions for misconduct under CPR 44.11.
Looking at the individual appeals, in Denton the court overturned an order granting relief to a claimant who had served six new witness statements a month before a 10-day trial which then had to be adjourned. In Decadent it overturned an order refusing relief from sanction for late payment of a court fee and in Utilise it overturned an order declining relief from sanction for filing a budget 45 minutes late.
The theme running through the court’s decisions seems to be whether the breach imperils a hearing or affects the future conduct of the litigation. Clearly, in Denton it did and in the others it did not.
On the face of it, Denton is a more commonsense decision than Mitchell and, on that basis is to be welcomed, although it may come as cold comfort to those who have been ‘Mitchelled’ in the interim. As to whether it will restore sanity, that remains to be seen.
Showing that you just cannot keep a good satellite litigator down, just a week after judgment there are reports of parties threatening misconduct applications in the event the opponent does not agree to an otherwise hopeless application for relief.
Rob Parness is Civil Costs Team Leader and head of London office for pricing and costs consultants Burcher Jennings