Post-Jackson: enforcing court orders and time limits

At paragraph 6.5 of his report, Jackson LJ stated: ‘... courts at all levels have become too tolerant of delays and non-compliance with orders. In so doing they have lost sight of the damage which the culture of delay and non-compliance is inflicting on the civil justice system. The balance therefore needs to be redressed’.

The change in the courts’ approach can be seen in the recent case of Venulum Property Investment v Space Architecture & Others [2013] EWHC 1242 (TCC), which concerned an application for permission to extend time for service of the Particulars of Claim.

The claimant, a property development and investment company registered in the Cayman Islands, brought various claims against a number of defendants, including professional negligence claims against the claimant’s estate agents (the Miller defendants). However, the claimant waited for five years before instructing solicitors to bring the claims. A claim form was eventually issued on 12 November 2012, before the limitation period for the claim expired, but was not served until 12 March 2013, the very last day for service permitted by Civil Procedure Rule 7.5(1).

The Particulars of Claim were not served with the claim form. Rather, the claimant’s solicitors wrongly thought that they had a further 14 days in which to serve the Particulars of Claim. This was, as the judge noted, based on a mistaken reading of CPR 7.4(1) and (2). The long-stop deadline for service of the Particulars of Claim is four months after the issue of the claim form (CPR 7.4(2) and 7.5(1)). The claimant made an application for an extension of time to serve the Particulars of Claim, which was opposed by the Miller defendants, as a fresh action against them would now be statute-barred.

The claimant’s application notice for an extension of time was based, among other things, on CPR 3.9. The judge noted that the editors of the White Book 2013 at paragraph 7.6.8 stated that a court considering whether to exercise its general discretionary power to extend time for serving particulars of claim should adopt the relief from sanctions framework set out in CPR 3.9 (see Price v Price [2003] 3 All ER 911).

The new amendments to CPR 3.9, however, removed the previous nine factors which a court would have to consider when exercising its discretion, but those factors were still considered by the judge. In this regard, the approach which should be adopted when considering CPR 3.9 was set out in Stolzenburg v CICB Bank Mellon Trust [2004] EWCA Civ 827, in which the Court of Appeal in that case was concerned with the approach to be adopted when considering CPR 3.9.

It approved the summary of the principles given by Etherton J (as he then was) at paragraph 44 of the judgment under appeal: ‘The court must bear in mind that, where the effect of the sanction is to preclude a trial on the merits, the effect is to deprive the applicant of access to the court, a concept which now has a particular resonance under article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms, as scheduled to the Human Rights Act 1998 (article 6): ibid at paragraph [42].

‘The court, in carrying out the balancing exercise, is not, however, limited to the nine items specified in rule 3.9. That rule expressly requires the court to consider all the circumstances… The exercise of the discretion of the court under CPR rule 3.9 must be carried out against the background, and in the light of, the overriding objective to deal with cases justly, as set out in CPR rule 1.1…’

In considering the factors under CPR 3.9(1), the judge found, among other things, that the wholly unexplained delay of more than five years since the claimant became aware of the problem was relevant. The judge held: ‘In general, it is not satisfactory or in the interests of justice to have claims brought in the closing weeks or months of a long limitation period. Delay is bad for justice... the court should adopt a stricter approach where a claimant has, seemingly through its own choosing, left the start of proceedings until the last minute.’ The judge found that there was no good excuse for the failure to comply with the relevant deadline.

Furthermore, although the claimant had complied with previous deadlines and court orders, the failure on behalf of the claimant’s solicitors to produce a proper pre-action protocol letter, with sufficient time in which to respond to it, deprived the Miller defendants of their chance to make out their case proportionately and inexpensively in correspondence prior to being involved in litigation.

The judge also held that the following two factors also applied in the present case: first, whether or not this was a weak claim (that is, against the Miller defendants); and second, the effect of the new ‘post-Jackson’ regime approach to the enforcement of, and compliance with, orders and time limits. The judge found that the factors listed under CPR 3.9 and the above additional two factors were fairly and finely balanced.

However, the following three factors were, in the judge’s opinion, of particular importance in dismissing the claimant’s application for an extension of time:

i) The claimant delayed for over five years before instructing solicitors and no explanation has been given for this period of delay.ii) On the material before the court, the claimant’s claim against the Miller defendants was weak. The consequence of not allowing the claimant to pursue the claim for the same loss against the Miller defendants may well not result in any demonstrable prejudice to the claimant.iii) The fact that the claimant was seeking to advance a claim for bad faith against the Miller brother was pleaded in particularly vague terms.

The judge made clear his frustrations with the claimant’s delay in bringing proceedings, which inevitably resulted in their failure to comply with the relevant court rules. He said: ‘In my judgment, when the circumstances are considered as a whole, particularly in the light of the stricter approach that must now be taken by the courts towards those who fail to comply with rules following the new changes to the CPR, this is a case where the court should refuse permission to extend time. The claimant has taken quite long enough to bring these proceedings and enough is now enough.’

Delays and non-compliance with court rules and orders have been major factors which have previously contributed to the culture of disproportionate costs being incurred in civil litigation. It is clear from Venulum Property Investments that the courts will be less willing to grant extensions of time or relief from sanctions post-Jackson and this approach is to be welcomed.

Michael Charalambous also contributed to this article