For this relief, no thanks

Giving priority to curbing costs and enforcing strict compliance with deadlines and rules is a marked departure from the approach to default taken pre-April 2013. Is pre-April case law relevant under the new regime and does prejudice have a continuing role to play? We consider the judicial guidance to date and offer a checklist of practice points.

Cats, reputedly, have nine lives and in the past litigants and their solicitors seemed to have as many. The courts’ approach to extensions of time toughened in recent years, but it was still possible to obtain several extensions, say for serving witness statements, before an unless order was made. Even when an unless order was made, where default resulted in the claim or defence (as appropriate) being struck out, the court had a discretion to extend time for compliance up until the deadline.

The Jackson reforms should make unless orders a thing of the past. Before April this year, a judge was required to consider nine factors under CPR 3.9 when deciding whether to give relief from a sanction. Perhaps most importantly, these factors included the prejudice caused to the parties by the failure to comply with the rule or direction and the prejudice caused to them by the granting of relief.

Since April, judges have a simpler rule to comply with. CPR 3.9 now requires the court to consider all the circumstances of the case including the need for litigation to be conducted efficiently and at proportionate cost and to enforce compliance with rules, practice directions and orders.

In Murray v Neil Dowlman Architecture Ltd, a case concerning the revision of an approved costs budget under the PD 51G pilot scheme, Coulson J recently confirmed suspicions that the absence of prejudice to the other side would no longer be sufficient to justify lenience. He said: "It will, I think, no longer be possible in the ordinary case for parties to avoid the consequences of their own mistakes simply by saying that the other side has not suffered any prejudice as a result."

We have been prepared for a ruthless approach to be taken to applications for relief from sanctions – after all, Jackson LJ warned us of that in Fred Perry Holdings Ltd v Brand Trading Plaza Ltd more than a year ago. What was less well trailed was the importance judges are placing on the new version of the overriding objective. The intended effect of the changes to the overriding objective were explained by the Master of the Rolls, Dyson LJ, in the 18th lecture in the implementation programme given on 22 March 2013, but it’s fair to say that few will have tracked down the text of the speech on the judiciary’s website.

The overriding objective in CPR 1.1 now refers to proportionate cost as an all-embracing end, together with dealing with cases justly. CPR 1.1(2) includes a new sub-paragraph (f) with the effect that ‘dealing with a case justly and at proportionate cost includes, so far as is practicable … enforcing compliance with rules, practice directions and orders’. Proportionality got most of the attention in the lead up to April but it is this paragraph that has been referred to in the cases decided since then, and it seems that its effect could be equally revolutionary.

HHJ Pelling QC, sitting as a High Court judge in Manchester, has certainly decided that this is the way forward. In Berg v Blackburn Rovers Football Club & Athletic Plc, a case concerning an application to withdraw an admission under CPR 14.1(5), he described the amendments to the overriding objective as radical. He expressed the view that it will have:

"…a significant impact on the approach to be adopted to applications of this kind, which will now be approached by courts much more rigorously than perhaps has been the practice in the past, particularly where formal admissions are made on behalf of parties represented by experienced and specialist professional advisors…"

CPR 14.1(5), which bears some similarity to the pre-April CPR 3.9, still requires the court to consider the prejudice to both parties. If HHJ Pelling QC and Coulson J are correct, and it seems that they are, the application of the new-form overriding objective to this and other rules could drastically constrain the courts’ exercise of discretion.

HHJ Pelling QC has continued in the same vein in Fons HF v Corporal Ltd. Both parties had failed to comply with deadlines for the service of witness statements. He referred again to the changes to the overriding objective and granted an extension (to 4pm the following day) only because the hearing was taking place shortly after the amendment to the CPR and because the delay since the final extension of time was relatively short. He continued:

"…all parties and the wider litigation world should be aware that all courts at all levels are now required to take a very much stricter view of the failure by parties to comply with directions, particularly where the failure to comply is likely to lead into a waste of the limited resources made available to those with cases to litigate."

If prejudice is no longer relevant to the exercise of discretion where a party has made an innocent mistake or is late serving evidence, all involved in litigation are likely to come unstuck at some point. Giving priority to curbing costs and enforcing strict compliance with deadlines and rules is a dramatic change which may render pre-April case law largely irrelevant.

Practice points

  • The wording of orders for directions is critical. Orders for exchange of evidence offer more flexibility than those for service on a particular date.
  • Be clear about which time limits can be extended by the agreement under CPR 2.11 and check the rules for calculating time CPR 2.8. Remember that the court can extend (or shorten) any time limit even after the date for compliance has passed under CPR 3.1(2)(a).
  • Remember to protect your position, where you are ready to exchange statements or reports and the other side isn’t, by lodging them at court and offering them for exchange, or by providing them to the other side in escrow in a sealed envelope (see Fons HF).
  • Excuses for delay (the solicitor in Fons HF referred to family commitments) have to be better in future. Cover from another solicitor will be necessary where a deadline may be missed.
  • Applications for relief from sanctions should be made as early as possible, and always before the deadline if they are to have any hope of success.
  • Email statements or reports to the other side by the deadline or soon after, even if this is bad service. Even though prejudice may no longer be material, minimising prejudice to the other side can only help.
  • Ensure that experts are aware of the importance of court deadlines and check that recourse against them is possible under their terms and conditions.

We look at the effect of the amended overriding objective on applications for relief in the context of the deadline for serving particulars of claim in a related briefing Be particular about particulars.

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