Death knell for technical game playing

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Parties and their lawyers were encouraged to take advantage of the other side’s procedural failures by the draconian approach taken to default in Mitchell but the courts’ attitude to tactical opportunism has changed dramatically in recent months. We look at the Court of Appeal’s recent guidance in McTear v Engelhard and the practical consequences for litigators.

In the last week of May, the Court of Appeal ordered a retrial in McTear v Engelhard, more than two years after the judge below had refused to grant the defendants relief from sanctions. They had made the mistake of serving witness statements 50 minutes late, together with some late disclosure, in the period between Mitchell v News Group Newspapers Ltd and Denton v TH White Ltd.

The fact that a short judgment written in a fortnight reviewing a case management decision should have taken two years to accomplish illustrates the scale of the growing backlog of cases in the Court of Appeal. Lord Dyson MR recently said that the volume of cases before the court has risen by 59 percent in the past five years, without any increase in judicial resources.

The unacceptable delays in the Court of Appeal tell us something important about the predominant concerns of our judges at the moment. These include the shortage of judges, an increasing workload in the civil courts in part brought on by rising numbers of litigants in person and the pressures of costs budgeting, and concerns about access to justice, exacerbated by the rises in court fees.

Duty to cooperate with the other side

Court time is at a premium. Judges have never been more conscious of the requirement in the overriding objective to allot to a case an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases. Technical game playing by parties and their lawyers where one party seeks to benefit from the procedural failure of the other, encouraged by the draconian approach taken to default in Mitchell, wastes court time and leads to satellite litigation.

The desire to discourage parties from taking technical points and indulging in aggressive and uncooperative correspondence can be seen in McTear. The Court of Appeal refers to Denton, which made clear the undesirability of both a lack of cooperation between litigating parties and of seeking to take inappropriate advantage of the other party’s mistakes.

The same approach was endorsed recently in OOO Abbott v Econowall UK Ltd. The defendant tried to take advantage from a misunderstanding about an extension of time for serving the claim form. The judge said that the overriding objective requires parties to ensure that there is clear common understanding between them as to the identity of the issues in the litigation and procedural arrangements. Any breakdown in understanding is likely to lead to wasted expense and to hamper the progress of the case, often because it gives rise to an application to the court to sort matters out. This is in turn requires allocation of the court’s resources which could otherwise be avoided.

Settlement and Part 36

In the past ten years or more, Part 36 has offered more scope for technical point taking than any other part of the Civil Procedure Rules. The courts have blown hot and cold during that period over whether to permit technical points to succeed or whether to try to do justice in the particular case.

Back in 2005 Lightman J deplored the stance taken by defendant in Hertsmere Primary Care Law Trust v Estate of Balasubramanium Rabindra-Anandh. The defendant’s lawyers told the claimant’s lawyers that their Part 36 offer was defective but refused to say in what way. They submitted that it was perfectly proper for them to withhold the information and to take advantage of the non-compliance at a later date since they owed no duty to enable the claimant to perfect the defect and rectify the error.

The judge rejected this approach – it would have been correct prior to the introduction of the CPR but the overriding objective had changed the law. In his view, the defendant was bound to cooperate with the claimant and obliged to provide the information requested so that the claimant could rectify the breach by serving a fresh Part 36 offer.

Judges in subsequent cases concerning Part 36 did not take this approach but the Court of Appeal picked up the theme again in 2013 when commenting on the effect of professional discourtesy. In PGF II SA v OMFS Co Ltd and Thinc Group Ltd v Kingdom the court held that failing to reply to an invitation to mediate or responding to settlement offers in one-sentence letters was unreasonable conduct that could merit a costs sanction (see our briefing on these cases).

More recently, the Court of Appeal has been at pains to achieve clarity about the scope and effect of Part 36 so as to avoid satellite litigation about the costs consequences of Part 36 offers. In Webb v Liverpool Women’s NHS Foundation Trust the court stressed the importance of the automatic costs consequences under Part 36. Where a claimant beats their Part 36 offer they are entitled to those costs consequences even though they have failed on a significant issue at trial. In such a case it is only relevant to look at the general costs discretion under CPR 44.2(5) where the claimant has unreasonably pursued the particular allegation or issue.

What does this mean for litigators?

The problems with judicial short staffing are not going away. Joshua Rozenberg has estimated that we are due to experience an extraordinarily large number of almost simultaneous High Court vacancies — perhaps as many as 15. The only way the courts can hope to handle their workload is to discourage technical point taking once proceedings are underway and to encourage settlement.

It may still be possible to succeed on technical points at the very outset of the proceedings but defendants should be cautious about attempting to do so. Barton v Wright Hassall is a recent illustration of a successful challenge to service of the claim form. The Court of Appeal upheld the decision below refusing to validate defective service by email under CPR 6.15, even though the claimant was a litigant in person. Although technical game playing by the defendant will weigh in the claimant’s favour under CPR 6.15, this had not occurred here. The rules concerning service by email are clear and the claimant had only himself to blame for leaving service until two days before the four month deadline.
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