Buying time – when can parties agree to delay?

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Before the introduction of the Civil Procedure Rules, the courts were not perceptibly concerned about delay agreed to by the parties.

By contrast, there was concern about stale proceedings bringing the litigation process into disrespect. Jarndyce v Jarndyce has cast a long shadow over our civil justice system - the suit that dragged its dreary length before the court for so long, and became so complicated, that no one apart from the parties understood it.  The CPR introduced the concept of active case management to address this problem. 

The Bleak House days are now well behind us.  In 2013 the Jackson reforms challenged a perceived culture of delay and non-compliance by amending the CPR to make relief harder to obtain where parties had missed court deadlines. 

Since then, an increasing shortage of judges and court funding has led to a robust attitude from the judiciary.  Necessity requires them to use their case management powers to ration valuable court time in the name of the overriding objective set out in CPR 1.1.  As well as requiring them to deal with cases justly and at proportionate cost, the overriding objective expressly refers to expedition. Other rules limit the circumstances in which parties can agree to extend time limits. 

Does, or should, this judicial control extend to consensual delay before proceedings are begun?  The answer to this is probably no but comments made recently by the judge in Cowan v Foreman could suggest otherwise.

We explore this and other questions below, in a review of the ways in which the parties can agree to delay at different points during general multi-track litigation under the CPR.

Before proceedings are begun

It is common practice for claimants coming up to the end of a limitation period to try and buy time before having to pay the court issue fee and plead the claim.  They can do this by agreeing a standstill agreement with the defendant.  These agreements come in many forms, some extending and others suspending the limitation period. Problems can and do quite frequently arise, for example where the agreement is made with the wrong party or where there is disagreement over the scope and effect of the standstill.

In Cowan v Foreman, a case concerning the six month time limit in section 4 of the Inheritance (Provision for Family and Dependants) Act 1975, Mostyn J abhorred the use of standstill agreements to extend the six month period.  He said that if the parties want a moratorium in order to negotiate, the claim should be issued in time and the court should be invited to stay the proceedings.

A similar approach has been advocated in other cases.  In Russell v Jones, Coulson J, then in the Technology and Construction Court, suggested that claimants could often find it easier to forget about standstill agreements.  Instead they should begin proceedings and then ask for a stay of six months or so to follow the pre-action protocol process.

After issue of proceedings but before service of the claim form

Although the court-approved method is to issue and serve the claim form and then seek a stay of proceedings, it is possible to obtain a stay after issue and before service of the claim form – see Grant v Dawn Meats (UK).  Parties may also choose to agree to suspend time after issue and before service.  This happened in Bethell Construction Ltd v Deloitte and Touche where the parties agreed an extension of time for service of the claim form and particulars of claim, terminable upon 14 days' written notice by either party.

It ended in tears for the claimant because its solicitor forgot that he hadn’t served the claim form (he’d previously provided a copy expressly not by way of service) and proceeded to serve only the particulars of claim without giving notice in accordance with the agreement. The defendant’s solicitor spotted the error and gave notice.  The claimant failed to serve the claim form within 14 days and the court held that the claim was out of time.

Stay of proceedings after service of the claim form

The recommended course is to issue and serve the claim form and for the parties to agree to ask the court to stay the proceedings.  This can go wrong if the court is not involved - see UK Highways A55 Ltd v Hyder Consulting (UK) Ltd for an exampleThere is no such thing as a de facto or an implied stay (as was argued in the case) and the parties cannot impose a stay by express agreement in the absence of an order of the court.

The parties should inform the court about any agreed extension of time under the CPR.  This is particularly so in the Commercial Court. In Griffin Underwriting Ltd v Varouxakis (Free Goddess) the parties had entered into an indefinite stay at the outset of proceedings but failed to get the court’s approval.  The agreed stay was not effective and the defendant was treated as having accepted that the court had jurisdiction.

Agreed extensions of time

In the cases above, the parties agreed to stay the proceedings without getting the court’s approval. It is perhaps more usual in these circumstances to agree to extend the time limit for serving particulars of claim.  This applies to other time limits under the CPR, with some exceptions which we look at below.  An extension will be effective without a court order but there must be a written agreement (CPR 2.11 and Thomas v Home Office). 

Service of the defence

The parties can agree an extension of time for the defence of up to 28 days but the court’s permission is needed for a longer extension (CPR 15.5).

Buffer orders

CPR 3.8(3) says that where a rule specifies the consequences of failing to comply with a time limit, the parties cannot extend the period by agreement.  This rule led to a deluge of applications for extensions after the Court of Appeal decided to take a much stricter approach to failures to comply with time limits as part of the Jackson reforms (Mitchell v News Group Newspapers Ltd)

CPR 3.8(4) was created to deal with this particular problem.  It allows parties to agree to extend time in writing in those circumstances for up to 28 days as long as a hearing date is not put at risk.  Rather confusingly, given that the whole point is that no application or court order is required, these agreements are known as buffer orders.  PD 29.6.5 says it isn’t necessary to file the written agreement with the court.

Other limits on agreed extensions

There are exceptions to the general rule in CPR 2.11 that the parties can agree to extend time for compliance with a rule or direction without applying for a court order.  We have looked at CPR 15.5 and CPR 3.8(3) above.  Some other general restrictions can be found in CPR 26.3 (date for filing a directions questionnaire) and CPR 29.5 (date for a case management conference, pre-trial review, pre-trial checklist, the trial or trial period or any date impinging on these dates).

Where the court’s approval is required for any agreed extension of time, the parties need to apply for a consent order by filing a draft of the order signed by or on behalf of both parties and an agreed statement of the reasons for the extension (see PD 29.6.5 and PD 23A.10.4).

Comment

There may be a parallel to be drawn between costs and delay. It used to be the case that a party to litigation could decide how much they wanted to pay their lawyers and how much time they wanted them to put into the case. The only question was how much of this could be recovered from the other side if they were successful.  This changed with the Jackson reforms which amended the overriding objective to require the court to deal with cases not only justly but also at proportionate cost. 

Is the same thing beginning to happen with agreed delay before proceedings begin? Court oversight first turned to the pre-action phase of litigation with the introduction of the CPR pre-action protocols.  The new disclosure pilot scheme in the Business & Property Courts (see paragraph 3.1 of Practice Direction 51 U) imposes duties on anyone who knows that they “may become a party to proceedings that may be commenced”. The judge’s statements in Cowan v Foreman about using standstill agreements in the wrong circumstances may also be a sign of a change in the judicial zeitgeist when it comes to pre-action conduct. Something to watch in future.

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