The CPR as interpreted in Mitchell create a new species of forfeiture – something which, elsewhere, has been disliked by courts as well as legislators. We can call it ‘procedural forfeiture’. It means this: if you break – other than de minimis (let us assume for now that this has a fairly certain meaning) – a court deadline for filing a costs budget, you will forfeit a major element of what is in dispute (ie any costs if you later win the case). By design, this intervention heavily tilts the see-saw of risks in the entire litigation.

The senior judges who have framed and interpreted this style of intervention see themselves as defending the court’s authority and process against the lax ways of certain litigants and representatives, and as therefore ‘strengthening the CPR’ for the greater good. They, of course, see this as necessary in upholding the rule of law and the proper administration of justice.

Many members of the profession beg to differ from those eminences and their rationalisation. We can point easily to the absence of empirical research concerning the real costs and benefits at stake, as between imposing a forthwith and summarily assessed award for the wasted costs of the adjourned case management conference and the making of a Mitchell order. In reply, those judges would say that they know the civil justice system best from their vantage point; that they must run it within the budget laid down by democratic institutions; and that allowing adjourned hearings or lax management of court lists causes judges to become overworked and exhausted.

The best point against Mitchell orders is this, which develops a contribution in the Gazette from Clive Wismayer: the party in the litigation who is not in breach of procedural time limit is then handed a windfall immunity from the costs sanction throughout the litigation, and so is set free to litigate without the usual constraints and sense of exposure to risk. Such a party might not accept a ‘good’ part 36 offer, or might refuse unreasonably to engage in mediation, or might run bad points unreasonably.

At the end of the litigation the court will lack the ability to award costs against that party. The wide discretion over costs of the case which until now has been the sacred preserve of the trial judge will have been fettered – in response to a rule breach prior to a case management hearing which may pale into insignificance compared to later events. Thus, the Mitchell sanction, being too heavy-handed at too early a stage in the litigation, can defeat its own means (compliance with rules, practice directions and orders) and impede the proper administration of justice.

Two wrongs don’t make a right. Trial judges so fettered may well feel inclined to look back at the Court of Appeal in Mitchell and mutter, in the manner of Oliver Hardy to Stan Laurel: ‘A fine mess you’ve got us into!’

Following a close second, it is pointed out how in Mitchell there has been inadequate evaluation of the sanction to be applied with reference to its proportionality. The Court of Appeal drew upon the evaluation of the civil justice system which is set out in Lord Justice Jackson’s report, without more. It can be argued that insufficient regard was therefore had to article 6 of the ECHR, which lays down the need for a fair hearing in the determination of civil rights and obligations, within a reasonable time and before an independent and impartial tribunal established by law.

The master referred to article 6 but deemed that the sanction of disallowing all of Mr Mitchell’s costs for the case was not disproportionate because he was not ‘driven from the court’. The Court of Appeal appears to have disregarded article 6, presumably on the view that it was not engaged or that there is always an extremely wide latitude of decision when the question is one of procedure. Thus, neither judgment surveyed the available alternative sanctions to find the best fit for the particular breach.

Eventually a proper proportionality evaluation is going to have to be carried out to find the most appropriate sanction for this serious breach of rules: the debate leads nowhere else.

Richard Clayton QC and Hugh Tomlinson QC state in The Law of Human Rights:

  • The principle of proportionality requires that there be a reasonable relationship between a particular objective to be achieved and the means used to achieve it.
  • Article 6 applies to ‘interim proceedings’ which have the effect of partially determining the rights of the parties by ‘causing irreversible prejudice’ to a party’s interests.
  • The fundamental principle to be applied under article 6 is whether the proceedings as a whole are fair.

Despite Andrew Mitchell MP not having gone to the Supreme Court, there must be at least a real prospect of an appeal there in some later case over the issue – possibly to be brought by the ‘leapfrog procedure’. The Supreme Court has recently shown, and in disagreement with the Court of Appeal, a most enlightened and proportionate response to civil rule-breaking in Daejan Investments Limited v Benson 2013 UKSC 14.

That litigation concerned the law of service charges for long leases of flats. Two tribunals and the Court of Appeal had disallowed a landlord’s service charges claim because the landlord had failed to follow a certain, again highly important, rule – for prior notice of intended works to be sent to the leaseowners. The Supreme Court allowed the service charges to be recovered upon condition that such errant landlords must pay the leaseholders’ costs in an application to a First-tier Tribunal for a dispensation and must suffer a percentage reduction in the service charges representing a generous assessment of the likely prejudice suffered.

Thus the Supreme Court upheld the need for rule compliance without straying into disproportionality. But it was not a new approach: the same lesson is contained in Lord Denning’s famous judgment, when he quoted from As You Like It, in R v Barnsley MBC ex p Hook.

Therefore, it’s probably fair to say that, all in all, this debate still has some way to run.

James Brenan, Cubism Law