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Mitchell v News Group Newspapers Limited, Court of Appeal, 27 November 2013

16 December 2013

Issues
Jackson reforms – failure to lodge costs budget – case management – relief from sanctions

The facts
The claimant, a Conservative MP, brought proceedings alleging defamation in respect of a report in The Sun newspaper following what had become known as ‘plebgate’. On 5 June 2013 the court awarded a case management and cost budget hearing on 10 June, but because that had been notified late to the parties, the hearing was relisted for 18 June. On the 17 June Master McCloud e-mailed the partys’ solicitors noting no budget from the claimant on the court file. The defendant had filed its budget on the 11 June. At 12.44pm the claimant’s solicitors e-mailed the Master to apologise and say that they were waiting for “Counsel’s figures”, thereafter they would file and exchange “in the next 2 hours”. The budget was filed during that afternoon. At the hearing the defendant’s solicitors said there had not been sufficient time to consider the claimant’s budget. She was told that the failure to file until the previous day was “to do with pressure of litigation elsewhere in the firm on another case” and the Master noted that this explanation was at odds of what she had been told in the e-mail. She found the claimant in breach of Practice Direction 51D and of the overriding objective. She ordered the claimant should be treated as having filed a budget comprising only applicable court fees. She also added that the claimant should be entitled to apply for relief from sanctions and this application would be heard alongside the adjourned case management and cost budget hearing on 25 July 2013. At that hearing the Master identified the claimant’s breaches being:

  1. The failure to engage in discussion with the defendant as to budgets and budgetary assumptions in accordance with paragraph 4.1 of PD51D.
  2. The failure to file a budget seven days before the Case Management Conference in accordance with paragraph 4.2 of the Practice Direction.

She noted that the budget had only been filed after prompting by the court. She noted that the claimant’s firm was a small one and under staffing pressures “stretched very thin in terms of resources”. None of these difficulties however had been notified to her on the 18 June nor had any application for relief had been made at that time. She refused relief on the basis that the explanations put forward by the claimant’s solicitors were not unusual and carried even less weight than they did pre-Jackson. In respect of prejudice she would not make assumptions about the wording of the CFA with his solicitors which might mean that the sanction would affect him financially but it could not be said that he would be denied access to court. Many claimants managed without lawyers. The judicial time was thinly spread and in accordance with the thrust of the Jackson reforms a tougher or robust approach to rule and compliance and relief was intended. The claimant appealed to the High Court judge, the appeal being transferred to the Court of Appeal pursuant to CPR 52.14 (1), the grant of permission of appeal was extended to cover the Master’s original decision as well as her refusal of relief from sanction.

The decision
CPR 3.12(2) provided that the purpose of cost management was that the court should manage both the steps to be taken and the costs to be incurred by the parties to any proceedings to further the overriding objective. CPR 3.13 provided that all parties except litigants in person had to file and exchange budgets by the date specified in the notice served by the court or if no such date was specified seven days before the first CMC. CPR 3.14 provided that unless the court ordered, otherwise any party failing to file a budget would be treated as having filed a budget comprising only of the applicable court fees. CPR 3.9 (1) provided that on any application for relief from sanction the court would consider all the circumstances of the case including the need:

  • for litigation to be conducted efficiently and at proportionate cost
  • to enforce the compliance with rules , practice directions and orders.

The cost management hearing of the 18 June proved to be abortive. The claimant was not in a position to evoke the saving provision in CPR 3.14 and asked the Master to make an order relieving him from the sanction imposed by the rule because his solicitors had not produced evidence which might have persuaded the court to adopt that course. The Master was entitled to make the order that she made on 18 June, in the knowledge that the claimant would have the opportunity to apply for relief of the adjourned hearing. In his 18th implementation lecture on the Jackson reforms the Master of the Roles said in relation to CPR 3.9 that there was to be a shift away from exclusively focusing on doing justice in the individual case. He said:

“the relationship between justice an procedure has changed…. it has changed because doing justice is not something distinct from, and superior to, the overriding objective. Doing justice in each set of proceedings is to ensure the proceedings are dealt with justly and at proportionate cost. Justice in the individual cases is now only achievable through the proper application of the CPR consistently with the overriding objective….Parties can no longer expect indulgence if they failed to comply with their procedural obligations. Those obligations not only serve the purpose of ensuring that they conduct the litigation proportionally in order to ensure their own costs are kept within proportionate bounds, but more importantly they serve the wider public interest of ensuring that other litigants can obtain justice efficiently and proportionally, and that the court enables them to do so”.

The Court of Appeal endorsed this approach. It gave guidance as to how the new approach should be applied in practice. The starting point was the nature of the non-compliance. If it could be regarded as trivial the court would usually grant relief provided that an application was made promptly. This would include failures of form rather than substance or cases where the party had narrowly missed the deadline imposed by the order but had otherwise fully complied with its terms. If the non-compliance was not trivial then the burden was on the defaulting party to persuade the court to grant relief. The court would want to consider why the default occurred and would need to find good reason. Later developments in the course of the litigation process were likely to be a good reason if they showed the period for compliance originally imposed was unreasonable. Intervening events such as a solicitor suffering from a debilitating illness or being involving in an accident might constitute a good reason. Merely overlooking a deadline whether on account of overwork or otherwise was unlikely to be a good reason. Solicitors should not take on too much work and expect to be able to persuade a court that this was a good reason for their failure to meet deadlines. They should either delegate the work to others in their firm or if they were unable to do so not take on the work at all.

Applications for an extension of time made before time had expired would be looked upon more favourably than applications for relief from sanction made after the event.

There were signs that the new approach was not being applied by some judges. In Wyche v Careforce Group Plc the defendant had failed to comply with an unless order but Walker J granted relief. In doing, the judge was concerned to discourage wasteful satellite litigation. The judge’s desire to discourage satellite litigation was shared by the Court of Appeal but it was not a good reason for adopting a more relaxed approach to the enforcement of compliance. Well intentioned incompetence for which there was no good reason, should not usually attract relief. In Raayan Al Iraq Co Ltd v Trans Victory Marine Inc Andrew Smith J granted relief. In doing so, he commented that he did not accept that the change in the rule or a change in the attitude or approach of the court to applications of this kind meant that relief from sanctions would be refused even though injustice would result. It seemed to the Court of Appeal that in making this observation the judge had focused exclusively on doing justice between the parties and not applying the new approach which sought to have regard to a wider range of interests. The appeals against both orders would be refused. The Master had not misdirected herself in any material respect or reached any conclusion not open to her. It had been a robust decision but she had been correct 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 good excuse for them. They had resulted in an abortive cost budget hearing and an adjournment which had serious consequences for other litigants. The Court of Appeal hoped that the decision would send out a clear message and if it did it was confident that in time legal representatives would become more efficient and would routinely comply with rules, practice directions and orders making satellite litigation of this kind a thing of the past.

Appeal dismissed.

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