OVERRIDING OBJECTIVE, MK II: A YEAR ON
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1 OVERRIDING OBJECTIVE, MK II: A YEAR ON THE 18TH IMPLEMENTATION LECTURE management and costs budgeting. Those commentators who perceive, for instance, the decision in Henry v News Group Newspapers Ltd [2013] EWCA Civ 19 as some form of signal from the Court of Appeal that the new rules will not be applied robustly are wrong. Henry was decided under the Mark I overriding objective. As Lord Justice Moore-Bick made clear in Henry future decisions on costs budgeting etc. will take place under the new rules that come into force on 1 April. As he put it (Those rules) impose greater responsibility on the court for the management of the costs of proceedings and greater responsibility on the parties for keeping budgets under review as the proceedings progress They do and so does the Mark II overriding objective. This was a speech given to the District Judges Seminar: as its title showed, it had succeeded 17 earlier lectures to the profession on the subject. On 22nd March 2013: Lord Dyson, MR said, commenting upon the Jackson Reforms: The relationship between justice and procedure h as changed. He explained and summarised that change in the relationship (so far as the new Part 1.1 was concerned) as follows: It seems to me that we can draw a number of conclusions: (i) first, that the revisions to both the overriding objective and rule 3.9 are designed to ensure that the courts, at all levels, take a more robust approach to ensuring that proceedings are managed so that no more than proportionate costs are incurred by the parties to those proceedings. They do so because proceedings must be managed in the public interest to ensure that individual parties do not expend more than is proportionate on their own claims; but as importantly, that they do not, through being permitted to expend more than a proportionate amount of the court s time and resources, impinge on the rights of other litigants to have fair access to the courts; (ii) secondly, that those revisions require a more robust approach to the enforcement of compliance and a more restrictive approach to relief from sanctions. This is not based on a dogmatic insistence on compliance for its own sake. It is done because, again I stress, the wider public interest demands it. The effective administration of justice requires it; and (iii) thirdly, the approach required by the overriding objective will not simply apply to questions of rulecompliance and relief from sanctions. It will apply to case management, costs OTHER FAIR WARNINGS: The MR was giving the profession fair warning a year ago; and he did so, after there were earlier warnings by the Court of Appeal of what was to come. For example, in Standard Bank Plc v Agrinvest International Inc. [2010] EWCA Civ 1400, Moore-Bick LJ said at paragraph 23: The CPR were intended to introduce a new era in civil litigation in which both the parties and the courts were expected to pay more attention to promoting efficiency and avoiding delay. The overriding objective expressly recognised for the first time the importance of ensuring that cases are dealt with expeditiously and fairly and it is that context that one finds for the first time in rule 13.3(2) an explicit requirement for the court to have regard on an application of this kind 1
2 to whether the application was made promptly. No other factor is specifically identified for consideration, which suggests promptness now carries much greater weight than before. It is not a condition that must be satisfied before the court can grant relief, because other factors may carry sufficient weight to persuade the court that relief should be granted, even though the application was not made promptly. The strength of the defence may well be one. However, promptness will always be a factor of considerable significance, as the judge recognised in paragraph 27 of his judgment, and if there has been a marked failure to make the application promptly, the court may well be justified in refusing relief, notwithstanding the possibility that the defendant might succeed at trial. And in Fred Perry v Brands Plaza Trading [2012] EWCA Civ 224, 3.9. He said that there was a concern that relief against sanctions was being granted too readily and said:... a culture of delay and noncompliance is injurious to the civil justice system and to litigants generally..litigants who substantially disregard court orders or the requirements of the CPR will receive significantly less indulgence than hitherto. So there was another fair warning; and the courts (mostly) took heed of that new approach. THE TERMS OF THE NEW CPR 3.9(1) PROVIDE: 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 ones below, and comment upon some of them. You will be familiar with the facts of many: Fons HF v Corporal Ltd and Another [2013]EWHC 1278 (Ch) (9th May 2013) - granted, but the Deputy Judge (His Honour Judge Pelling, QC, in Manchester) added this: In the end I am only persuaded to extend the time for the filing of witness statements because this hearing is taking place only a very short while after the amendment of the CPR and because the period that has elapsed since the final extension expired is relatively short. However, 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...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 ON THE CIVIL JUSTICE SYSTEM. THE BALANCE, THEREFORE, NEEDS TO BE REDRESSED. Lewison, LJ, cited with approval a paragraph of Sir Rupert Jackson s report which said:...courts at all levels have become too tolerant of delays and noncompliance with orders. In doing so, they have lost sight of the damage which the culture of delay and noncompliance is inflicting on the civil justice system. The balance, therefore, needs to be redressed. And Lord Justice Jackson himself, in the same case, expressed similar sentiments. He drew attention to the then prospective amendments to Rule (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders. THE NEW APPROACH AFTER 1ST APRIL 2013 Since then, we have seen a number of cases where relief from sanctions has been sought, by applications under Part 3.9; and where the courts have (at all levels: see below) taken the MR s change of relationship point to heart. We mention some of the most important resources made available to those with cases to litigate. Less than a fortnight later, in the TCC in London, came the very much stricter decision of: * Venulum Property Investments Ltd v Space Architecture Ltd and Others [2013] EWHC 1242 (TCC) (22nd May 2013), where Edwards-Stuart, J refused relief 2
3 * Raayan al Iraqi v Trans Victory wish to refer is that of Andrew Smith Marine [2013] EWHC 2696 (23rd J in Raayan Al Iraq Co Ltd v Trans August 2013) - granted, but Andrew Victory Marine Inc. [2013] EWHC Smith, J, criticised in Mitchell, on 2696 (Comm). The claimant applied appeal (see below) for an extension of two days for the * Thevarajah v Riordan & Ors [2013] service of its particulars of claim. In EWHC 3179 (Ch) (10 October 2013) substance, the application was for - granted (but Respondent successfully relief from sanctions under CPR 3.9. appealed: see below). The judge acknowledged that the list *Biffa Waste Services Ltd v Dinler of circumstances that was itemised & Ors [2013] EWHC 3582 (QB) (10 in the earlier version of the rule had October 2013) - refused. gone. Nevertheless, he proceeded There were some other cases in the somewhat reluctantly to apply the TCC, in each of which relief against old checklist of factors. We accept that, sanctions was refused, including: depending on the facts of the case, it Cooperative Group Ltd v Birse will be appropriate to consider some Developments Ltd [2013] EWHC 3145 or even all of these factors as part of (TCC) (17th October 2013) refused all the circumstances of the case. Then came: But, as we have already said, the most * Mitchell MP v News Group important factors are the need for Newspapers Ltd [2013] EWCA Civ litigation to be conducted efficiently 1537 (27 November 2013) - relief and at proportionate cost and to refused. In this leading case, guidelines enforce compliance with rules, practice for the grant of relief were laid down, directions and orders. IT SEEMS TO US THAT, IN MAKING THIS OBSERVATION, THE JUDGE WAS FOCUSING EXCLUSIVELY ON DOING JUSTICE BETWEEN THE PARTIES IN THE INDIVIDUAL CASE AND NOT APPLYING THE NEW APPROACH WHICH SEEKS TO HAVE REGARD TO A WIDE RANGE OF INTERESTS. by MR himself (who decided to sit Having examined the case by on the case himself, to make sure that reference to the old checklist of factors, the message got through). He said, Andrew Smith J concluded at para 18 giving the judgement of the court, and that the overriding objective demands referring to his March speech that the that relief be granted and I grant it. Rayaan al Iraqi judge, in granting relief But it seems to us that he may not have from sanctions, gave insufficient weight recognised the particular importance to the new approach. It is worth citing of the two elements of the overriding this passage in full, for the guidance it objective that are mentioned in the gives practitioners generally: revised version of CPR 3.9. It is true The other decision to which we that at para 15 the judge referred to the culture of delay and non-compliance and what Sir Rupert Jackson had said about that in his Final Report. As to the effect of the revision to CPR 3.9, he said: Nor do I accept that the change in the Rule or a change in the attitude or approach of the courts to applications of this kind means that relief from sanctions will be refused even where injustice would result It seems to us that, in making this observation, the judge was focusing exclusively on doing justice between the parties in the individual case and not applying the new approach which seeks to have regard to a wide range of interests. This was to re-emphasise the new approach. Then: * SC DG Petrol SRL & Ors v Vitol Broking Ltd [2013] EWHC 3920 (Comm) (09 December 2013) - refused * Aldington & Ors v ELS International Lawyers LLP [2013] EWHC B29 (QB) (12 December 2013) - granted (His Honour, Judge Oliver-Jones, QC, where 11 out of 134 Claimants had not served Particulars of Claim and the application was opposed only in respect of eight of them). * Durrant v Chief Constable of Avon & Somerset Constabulary [2013] EWCA Civ 1624 (17 December 2013) - refused * Karbhari & Anor v Ahmed [2013] EWHC 4042 (QB) (17 December 2013) - refused * Royal Free London NHS Foundation Trust, R (On the Application Of) v Saker [2013] EWHC 4101 (Admin) (18 December 2013) - refused * Singh v Singh [2013] EWHC 4571 (Ch) (18 December 2013) - refused * Harrison & Anor v Black Horse Ltd [2013] EWHC B28 (Costs) (20th December 2013) - refused 3
4 * Integral Petroleum SA v SCU- Finanz AG [2014] EWHC 702 (Comm) (14 arch2014) - granted (Popplewell, J set aside a default judgement, obtained in breach of the rules and on erroneous Iraqi that he also judged trivial ). Lincolnshire County Council v Mouchel Business Services Ltd & Anor [2014] EWHC 352 (TCC) (21 February 2014) - refused which have been singled out for specific mention in the rule [36]; (b) although regard should be had to all the circumstances of the case, the other circumstances should - subject NOR DO I ACCEPT THAT THE CHANGE IN THE RULE OR A CHANGE IN THE ATTITUDE OR APPROACH OF THE COURTS TO APPLICATIONS OF THIS KIND MEANS THAT RELIEF FROM SANCTIONS WILL BE REFUSED EVEN WHERE INJUSTICE WOULD RESULT evidence, and, having quoted Moore- Bick LJ, in Standard Bank v Agrinvest mentioned Mitchell in one sentence, without commenting further: A further step in the stricter approach taken by the Courts to delay was marked by the decision in Mitchell ). Bijlani v Unum Ltd [2014] EWHC 27 (QB) (15 January 2014) - refused Thevarajah v Riordan & Ors [2014] EWCA Civ 14 (16 January 2014) - on appeal by R (see above); refused. Webb Resolutions Ltd v E-Surv Ltd [2014] EWHC 49 (QB) (20 January 2014) - refused M.A. Lloyd & Sons Ltd v PPC International Ltd [2014] EWHC 41 (20th January 2014) - refused. Newland Shipping & Forwarding Ltd v Toba Trading FZC [2014] EWHC 210 (Comm) (06 February 2014) - refused (Hamblen, J) Wahid & Anor v Skanska UK Plc & Anor [2014] EWHC 251 (QB) (11 February 2014) - refused Lakatamia Shipping Co Ltd v Nobu Su & Ors [2014] EWHC 275 (Comm) (13 February 2014) - granted (Hamblen, J, where the 46 (or 15) minutes delay was de minimis, the non-compliance was trivial, and so was a case where relief will usually be granted, within Mitchell. This was unlike the two-day delay in Rayaan al Associated Electrical Industries Ltd v Alstom UK (A Private Unlimited Company) [2014] EWHC 430 (Comm) (24 February 2014) - refused (and, in para 49, Andrew Smith J referred to the CA s criticism in Mitchell of his grant in the Rayaan al Iraqi case as being insufficiently focussed on the new approach ). So that is the recent jurisprudence on the topic, showing how the courts new approach. We should also recapitulate here, for the convenience of our clients (so that the complete code is found in the one place) the scheme for the new approach to applications under Part 3.9 for relief from sanctions, to be found in the MR s judgement: THE MITCHELL GUIDELINES: These were helpfully summarised (with references to the paragraphs of the MR s speech) by the Deputy Judge in Aldington, as follows: (a) when dealing with applications under CPR 3.9, the need (i) for litigation to be conducted efficiently and at proportionate cost and (ii) to enforce compliance with rules, practice directions and court orders... should now be regarded as of paramount importance and be given great weight, these being the only considerations to points set out below - be given less weight than the two considerations which are specifically mentioned [37]; (c) It will usually be appropriate to start by considering the nature of the non-compliance. If this can properly be regarded as trivial, for example if there has been no more than an insignificant failure to comply with an order, the court will usually grant relief provided the application is made promptly. This will include cases where here 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 [40]. (d) if the non-compliance cannot be characterised as trivial, then the burden is on the defaulting party to persuade the court to grant relief. In these circumstances the court will want to consider why the default occurred. If there is good reason for it, the court will be likely to decide that relief should be granted [41]; (e) mere overlooking a deadline, whether on account of overwork or otherwise, is unlikely to be a good reason. Pressure of work will rarely be a good reason [41]; (f) good reasons are likely to arise from circumstances outside the control of the party in default [paragraph 43]; 4
5 (g) well-intentioned incompetence, for which there is no good reason, should not usually attract relief from a sanction unless the default is trivial [paragraph 48]; (h) 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 [41]; (i) the new approach seeks to have regard to a wide range of interests and judges should not focus exclusively on doing justice between the parties in the individual case [51]; (j) thus the question will be: was the default by the party or their solicitor minor or trivial and, if not, was there a good excuse for it? [59]. SUMMARY OF ADVICE: So we should assume that the - by now, well-known - Mitchell guidelines will be followed by the courts, almost mechanistically, with the almost inevitable result that no relief is ever likely to be granted. That is the working assumption from now on. In the few decisions in the above list where relief against sanctions was given, the Manchester Deputy Judge s one in May 2013 may be disregarded as of any guidance; one was where the erroneous evidence helped the applicant s case; one was upset on appeal; one was criticised by the Court of Appeal (and the judge took this criticism to heart in a later case); that same judge in another case found a 46- minute delay amounted to trivial non-compliance; and the facts of the Deputy Judge s case of Aldington were unusual - and that application was barely opposed. All these case were involving failures to meet various deadlines in respect of Orders concerning statements of case, particulars, witness statements, amendments and case management generally. There were also some important cases on applications from relief from sanctions in costs proceedings, which we think deserve to be dealt with in a separate note (including Mitchell itself, of course, concerning failing to serve a costs budget on time); but the principles that can be deduced from the cases since 1st April 2013 for relief from sanctions are that - whatever any individual judge has to say, fulminating about opportunism and unjustified windfalls to Respondents - the odds are against mercy being extended to a defaulting party. As a final word of caution, see Part 3.8.3, and a where a time for doing something is prescribed under an Order (etc.)... the time for doing the act in question may not be extended by agreement between the parties (our emphasis). So, however well you know your opponents and however well you trust them, you must apply to the court for relief; you must do so before the time has expired under the Order; and you must show good reasons for being allowed to escape the consequences of the sanction prescribed by the Order in question: follow the Mitchell guidelines KNAPP RICHARDSON 31st March
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