UPDATE: Relief from Sanction and the guidance in Mitchell v News Group Newspapers [2013] EWCA Civ 1537 has been recast by Denton v White Ltd [2014] EWCA Civ 906
1. Most civil claims are litigated through the procedural framework set down in the Civil Procedure Rules. Even meritorious claims or defences must still be navigated through the procedural steps and hurdles required by the rules, practice directions and court orders, from pre-action protocol to trial and potentially beyond. Exercising their robust case management powers, civil judges timetable ahead with a view to giving effect to the overriding objectives’ laudable aims, in particular, of dealing with cases expeditiously and allocating to each case a proportionate amount of the Court’s overall resources.
2. It has often been a thorny problem for the Court how to treat non-compliance with such timetabling and deadlines. The threat of sanction for non-compliance (typically contained in the rules or within unless orders) and then the imposition of sanction are both important stages, but the tension between compliance and the consequences of the sanction come into sharpest focus when the Court considers the all too frequent application by the defaulting party for the Court to exercise its discretionary powers and grant relief from the sanction under CPR r.3.9.
3. The decision on whether to grant relief from sanction can have enormous consequences for the prospects and/or progress of the claim or defence – otherwise perfectly valid and meritorious claims or defences can be lost due to procedural mistakes. Parallels can be drawn between this and the high stakes arguments involving Limitation Act arguments.
4. The core tension the law faces therefore with non-compliance and relief is between:
a. maintaining the credibility, effectiveness and timely administration of the whole civil procedure system and in its application to the individual case before the court; and
b. avoiding unfairly denying a party the opportunity to put forward their best substantive case for adjudication because of an incident of non-compliance.
Jackson Reforms
5. Significant publicity has surrounded the Review of Civil Litigation Costs undertaken by Sir Rupert Jackson. He addressed the question – how strictly should the courts now enforce compliance with rules, practice directions and court orders? Prior to the Woolf reforms, the traditional approach of our civil courts on the whole was to excuse non-compliance if any prejudice caused to the other party could be remedied (usually by an appropriate order for costs). The Woolf reforms attempted to encourage a less indulgent approach in the courts. The Jackson reform conclusion was that still tougher and less forgiving approach was required. He stated that the ‘…courts at all levels have become too tolerant of delays and non-compliance with orders. In doing so, they have lost sight of the damage which the culture of delay and non-compliance is inflicting upon the civil justice system. The balance therefore needs to be redressed.’ This Jackson recommendation has been adopted and incorporated into the Civil Procedure Rules, with the new revised CPR r.3.9 (1) coming into force on 1.3.13.
The New CPR r.3.9 (1)
6. CPR r.3.9 (1) now reads as follows:
'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 orders.’
7. To appreciate how this represents a change, this should be contrasted with the previous version of CPR r.3.9 (1), which was in these terms:
‘On an application for relief from any sanction imposed for failure to comply with any rule, practice direction or court order the court will consider all the circumstances including –
(a) the interests of the administration of justice;
(b) whether the application for relief has been made promptly;
(c) whether the failure to comply was intentional;
(d) whether there is a good explanation for the failure;
(e) the extent to which the party in default has complied with other rules, practice directions, court orders and any relevant preaction protocol;
(f) whether the failure to comply was caused by the party or his legal representatives;
(g) whether the trial date or the likely trial date can still be met if relief is granted;
(h) the effect which the failure to comply had on each party; and
(i) the effect which the granting of relief would have on each party.’
8. Before considering the Jackson rational for the specific word changes, and how the Court of Appeal have interpreted them, it is helpful to consider the applicable CPR r.1.1 and the overriding objective of enabling the court to deal with cases ‘justly and at proportionate cost’. CPR r.1.1 (2) provides that this includes, so far as is practicable:
‘(a) ensuring that the parties are on an equal footing;
(b) saving expense;
(d) ensuring that it is dealt with expeditiously and fairly;
(e) allotting to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases; and
(f) enforcing compliance with rules, practice directions and orders’
Jackson rational for the specific word changes
9. The rational the Jackson reforms give for the new CPR r.3.9 wording is to:
(a) signal the change in the balance advocated by the Jackson reforms;
(b) relieve Judges of the need in their judgments to give a lengthy recitation of the listed of factors;
(c) simplify the rule.
Shift in Emphasis - Court of Appeal Guidance on the new CPR r.3.9
10. Mitchell v News Group Newspapers [2013] EWCA Civ 1537 is the first case to reach the Court of Appeal on the new CPR r.3.9. The Master of the Rolls, giving the judgment of the Court, took the opportunity to provide some general guidance on its intendment and application.
11. The Master of the Rolls stated that the 2 new factors (or ‘considerations’) expressly listed in the new CPR r3.9 reflect a ‘deliberate shift in emphasis’, and that these ‘considerations should now be regarded as of paramount importance and be given great weight’. The Court recognized that ‘all the circumstances’ of the case remained to be considered by the Court during its decision making process, but stated that, ‘…(subject to the guidance that we give below) the other circumstances should be given less weight than the two considerations which are specifically mentioned’. The Court endorsed the words of the Master of the Rolls in a lecture given prior to the new CPR r.3.9 coming into force, that the new CPR r.3.9 represented a ‘shift away from exclusively focusing on doing justice in the individual case’. Further that:
'26. The revisions to the overriding objective and to rule 3.9, and particularly the fact that rule 3.9 now expressly refers back to the revised overriding objective, are intended to make clear that the relationship between justice and procedure has changed. It has changed not by transforming rules and rule compliance into trip wires. Nor has it changed it by turning the rules and rule compliance into the mistress rather than the handmaid of justice. If that were the case then we would have, quite impermissibly, rendered compliance an end in itself and one superior to doing justice in any case. 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 that proceedings are dealt with justly and at proportionate cost. Justice in the individual case is now only achievable through the proper application of the CPR consistently with the overriding objective.
27. The tougher, more robust approach to rule-compliance and relief from sanctions is intended to ensure that justice can be done in the majority of cases. This requires an acknowledgement that the achievement of justice means something different now. Parties can no longer expect indulgence if they fail to comply with their procedural obligations. Those obligations not only serve the purpose of ensuring that they conduct the litigation proportionately 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 proportionately, and that the court enables them to do so.'
12. In essence, the interests of other court users will play a much more significant role in the relief from sanctions balance. The facts in the Mitchell case well illustrated how a party’s non-compliance and subsequent abortive hearing and relisting, can disrupt other cases going through the court system. To accommodate the relisted hearing in Mitchell, a hearing in an asbestos-related case had been vacated.
Applying the new CPR r.3.9 approach
13. Having explained the shift in emphasis and underlying rational for that shift, Mitchell set out how this new approach should be applied in practice.
Stage 1: Trivial or insignificant failure to comply
14. The Court stated:
‘It will usually be appropriate to start by considering the nature of the non-compliance with the relevant rule, practice direction or court order. If this can properly be regarded as trivial, the court will usually grant relief provided that an application is made promptly. The principle "de minimis non curat lex" (the law is not concerned with trivial things) applies here as it applies in most areas of the law. Thus, the court will usually grant relief if there has been no more than an insignificant failure to comply with an order: for example, where there has been a failure of form rather than substance; or where the party has narrowly missed the deadline imposed by the order, but has otherwise fully complied with its terms.’
Stage 2: Non-trivial non-compliance – a ‘good reason’?
15. The Court continued:
‘If the non-compliance cannot be characterised as trivial, then the burden is on the defaulting party to persuade the court to grant relief. The court will want to consider why the default occurred. If there is a good reason for it, the court will be likely to decide that relief should be granted.’
16. As to what amounts to a ‘good reason’, the Court gave examples:
[Example 1] ‘…if the reason why a document was not filed with the court was that the party or his solicitor suffered from a debilitating illness or was involved in an accident, then, depending on the circumstances, that may constitute a good reason.
[Example 2]: Later developments in the course of the litigation process are likely to be a good reason if they show that the period for compliance originally imposed was unreasonable, although the period seemed to be reasonable at the time and could not realistically have been the subject of an appeal.
[Example 3]: But mere overlooking a deadline, whether on account of overwork or otherwise, is unlikely to be a good reason. We understand that solicitors may be under pressure and have too much work. It may be that this is what occurred in the present case. But that will rarely be a good reason. Solicitors cannot take on too much work and expect to be able to persuade a court that this is a good reason for their failure to meet deadlines. They should either delegate the work to others in their firm or, if they are unable to do this, they should not take on the work at all.'
17. Anticipating that some in the legal profession may consider Example 3 to be unduly punitive on them, the Court stated:
‘This may seem harsh especially at a time when some solicitors are facing serious financial pressures. But the need to comply with rules, practice directions and court orders is essential if litigation is to be conducted in an efficient manner. If departures are tolerated, then the relaxed approach to civil litigation which the Jackson reforms were intended to change will continue.'
18. When the relief application is made, whether before or after the deadline, will affect how the Court is to look upon the merits of the application:
‘We should add that applications for an extension of time made before time has expired will be looked upon more favourably than applications for relief from sanction made after the event.’
19. The Court gave some further assistance:
• ‘The weaker the reason [for non-compliance], the more likely the Court will be to refuse to grant the [relief from sanction]’. Some would say this is a rather obvious point, but it is important to note that the test is not, is there is or there not a ‘good reason’ - with the success or failure of the application for relief dependent on the court’s assessment on that point. The guidance is more nuanced than that. The Court stated ‘If there is a good reason for [the non-compliance], the court will be likely to decide that relief should be granted’. The absence of a ‘good reason’ only affects the likelihood of relief from sanction being granted. It is not a mandatory pre-requisite to relief. The requirement is that the Court ultimate decide the application ‘justly’.
• ‘…good reasons are likely to arise from circumstances outside the control of the party in default’. This seems another obvious point. Responsibility for the non-compliance being almost certainly a relevant factor in the assessment of the merits of the reason proffered by the defaulting party. However the lack of control will, it is suggested, need to be seen in the context of whether the circumstances and events which unfolded, could have been and ought to have been anticipated by the defaulting party and provision made for the risk of that eventuality occurring. Interestingly reference is made by the Court to ‘the useful discussion’ in two academic texts, namely Blackstone’s Guide to The Civil Justice Reforms 2013 paragraphs 5.85 to 5.91, and an article by Professor Zuckerman ‘The revised CPR r3.9: a coded message demanding articulation’ in Civil Justice Quarterly, pp 9 to 11. Arguably, thereby elevating these two texts to the status of essential reading for anyone involved in a relief from sanctions application.
• A relief from sanction application ‘presupposes that the sanction has in principle been properly imposed’. It would therefore be misguided to bolster the relief application with the submission that certain factors show that the sanction should not have been imposed in the first place. The appropriate route to challenging the application of the sanction itself, rather than simply seeking relief from the sanction, is by way of: (a) appeal; or exceptionally (b) CPR r.3.1 (7) application to vary or revoke the order imposing the sanction. Considerations of finality, maintaining the concept of an appeal, and avoiding the litigants having 2 bits at the cherry all weigh strongly against acceding to such r.3.1 (7) applications.
20. Readers with more time should note that Mitchell is a case that repays being read in full.
Impact of the new CPR r.3.9 and Mitchell
21. Almost inevitably the reduced scope for relief should improve levels of compliance. There has, after all, been significant publicity round the Jackson reforms, the new CPR r.3.9 introduction and now Mitchell, and the message that there has been an injection of strictness into relief from sanction has been made clear enough (it might take a little while longer for the message to reach self-representing parties). Greater compliance can only be to the advantage of all participants in the court system (save perhaps the solicitor who has to stay late at work to meet a succession of tight deadlines), reducing the procedural burden on the Court and other court users from re-timetabling and re-listing hearings, freeing up Court time to deal with other matters quicker.
22. There may be less non-compliance, and so less need for relief from sanction applications, but where a sanction is imposed, the same incentives to seek relief from sanction will still exist. Many defaulting parties will continue to be make applications for relief – principally because the effect of the sanction is usually so severe, so disabling to the defaulted party’s case (usually evidentially – being debarred from being able to rely on certain evidence), that most parties will consider it financially worthwhile to take a chance with an application.
23. Judges and advocates will have to grapple with the meaning of ‘trivial’ and ‘good reason’ - against the backdrop of the mischief the Jackson reforms were aimed at addressing, and the Mitchell guidance. There will be fertile ground for resourceful lawyers to attempt to draw distinctions, nuances and analogies between different procedural lapses and errors and the examples given by Mitchell. Indeed, the Court recognized that its guidance would not necessarily temper the scope for dispute. The Court stated:
‘We acknowledge that even the question of whether a default is insignificant may give rise to dispute and therefore to contested applications. But that possibility cannot be entirely excluded from any regime which does not impose rigid rules from which no departure, however minor, is permitted’
24. This seems logical because merely shifting the balance or threshold for relief does not necessarily reduce the scope for argument and so litigation around whether the balance or threshold is or is not met in a particular case.
25. Argument is likely to centre around whether:
(1) the non-compliance was trivial; alternatively,
(2) there was a good reason for the non-compliance;
(3) the non-compliance arose from circumstances beyond the defaulting party’s control, and
(4) the fall-out from the non-compliance has had only a minimal impact on the court system and other users.
26. What will clearly be different will be the greater willingness of the Court to refuse relief from sanction applications, despite relief being prime facie the correct balance on the merits in an individual case, on the basis that ‘Justice in the individual case is now only achievable through the proper application of the CPR consistently with the overriding objective.’ That is, that the wider interests of the Court system and of maintaining the right balance as between all cases, will sometimes outweigh the individual justice in individual cases. In essence, this is encapsulated in the substitution of the 9 previous express considerations with the 2 new considerations, and the Mitchell guidance that these ‘considerations should now be regarded as of paramount importance and be given great weight’. The previous 9 considerations will remain relevant, coming under the ‘all the circumstances’ heading, but they will, relative to the 2 new considerations, weigh much less in the balancing exercise. The ultimate CPR r.3.9 test of ‘justly’ is now much more, justly as between cases, as well as within a case. You have been warned.
SIMON HILL © 2014
BARRISTER
33 BEDFORD ROW
NOTICE: This article is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of Chambers or by Chambers as a whole.