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dealing with the Jackson reforms in light of ‘plebgate’

27 November 2013

Eight months after the introduction of the Jackson reforms the Court of Appeal has given us some strong guidance as to how the courts will deal with the reforms in practice and in particular the cost management provisions. Jackson is here and it’s here to stay. Going forward courts will expect parties to comply with the rules, practice directions and court orders and if there is non-compliance, draconian consequences will follow.

Plebgate – Background
Andrew Mitchell MP instructed solicitors to bring defamation proceedings against The Sun newspaper following allegations that Mr.Mitchell swore at police officers at the gates of Downing Street last year. The claim was issued before April 2013 and was subject to the pilot Practice Direction on cost management applicable to defamation claims.

The pilot Practice Direction provided that:
The parties must exchange and lodge with the court their costs budgets in the form of Precedent HA not less than 7 days before the date of the hearing for which the costs budgets are required”.

A Case Management Conference (CMC) was listed and The Sun’s lawyers lodged a cost budget on behalf of the defendant. Mr. Mitchell’s solicitors did not file a cost budget until the day before the CMC despite being chased by both the court and the defendant’s solicitors.

At the CMC the judge made an order that in view of the failure to file a cost budget, Mr.Mitchell would be restricted to the recovery of court fees only in the event of him eventually being successful in the libel action. As an aside, it should be noted that the restriction of the budget to court fees comes from CPR 3.14 which came into effect from 1st April 2013 and did not apply to the defamation pilot.

An application was made to the court to lift the order under CPR 3.9 (‘relief from sanction’). CPR 3.9 states:
“(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need:
(a) for litigation to be conducted efficiently and at proportionate cost; and
(b) to enforce compliance with rules, practice directions and order.
(2) An application for relief must be supported by evidence.”

Mr.Mitchell’s lawyers argued that the order made was unfair and that there were a number of reasons why they were unable to comply, which primarily related to staffing issues at their small practice. The judge took the view that the problems were “not unusual” and refused their application.

In her judgment Master McCloud said:
“Budgeting is something which all solicitors by now ought to know is intended to be integral to the process from the start, and it ought not to be especially onerous to prepare a final budget for a CMC even at relatively short notice if proper planning has been done.”

Taking a strict approach, Master McCloud said that post 1st April courts would be “… requiring a strict compliance with rules and orders even if that means that justice can be done in the majority of cases but not all”.

Plebgate – The appeal
Mr.Mitchell’s solicitors appealed against the decision to limit costs to court fees only and the case was fast tracked. The parties argued the case before the Court of Appeal on 7th November and Judgment has been handed down today.

The court addressed two questions:
1. Was Master Mc Cloud right to make the Order that Mr.Mitchell would only recover court fees in the event he was successful?
2. Should Mr.Mitchell be given relief from sanction?

The court has endorsed Master McCloud’s strict approach in relation to the first question ruling that “27…the Master was entitled to apply CPR 3.14 by analogy and that “…in our judgment she was entitled to be guided by CPR 3.14 since this represented the considered view of the Civil Procedure Rule Committee as to what constituted a proportionate sanction for failure to file a costs budget in time unless the court otherwise ordered”. Further to that, there has been a considerable amount of publicity in relation to the new reforms and practitioners know or ought to know that if there is a breach of the new provisions that “some sanction would be imposed”.

The court pointed out that Master McCloud made the order in the knowledge that the claimant could apply for relief from sanction at a later date where evidence could be given by the claimant in support of that application.
The court then went on to decide as to whether in this case there ought to be relief from sanction. The court said that there ought not to be. The conclusions reached by the court and given by the Master of the Rolls, Lord Dyson deliver a powerful message as to how matters will be dealt with in the post-Jackson era.

The court said:
“59. …The Master did not misdirect herself in any material respect or reach a conclusion which was not open to her. We acknowledge that it was a robust decision. She was, however, right to focus on the essential elements of the post-Jackson regime. The defaults by the claimant’s solicitors were not minor or trivial and there was no excuse for them….Although it seems harsh in the individual case of Mr. Mitchell’s claim, if we were to overturn the decision to refuse relief it is inevitable that the attempt to achieve a change in culture would receive a major setback.
60. …We hope that our decision will send out a clear message. If it does, we are confident in time, legal representatives will become more efficient and will routinely comply with rules, practice directions and orders. If this happens, then we would expect that satellite litigation of this kind, which is so expensive and damaging to the civil litigation system, will become a thing of the past.”

The message from the Court of Appeal could not have been clearer; post Jackson, comply with rules, practice directions and orders or else! The court has also taken a dim view of satellite litigation which has, in the past, taken up so much court time. The Court of Appeal is due to hear further appeals next month on the consequences of non-compliance with case management directions: on the face of this decision it would appear to be clear that the court will be taking a strict approach.

Whilst it may be argued that in certain individual cases this may lead to injustice, we now have clarity on the approach that courts ought to take and that satellite litigation will be viewed with distaste.

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