On Friday 4th July the Master of the Rolls, Lord Dyson, alongside Vos LJ and Jackson LJ, issued clarification on how to deal with non-compliance with Court Orders.
This followed the draconian decision of Mitchell and came in the form of his judgement on three consolidated appeals, all of which were dealing with CPR 3.9, asking for relief from sanctions.
Dyson said that previous guidance had been “misunderstood” and “misapplied” by some courts.
Clarification was given in the following three stage test:
1. The Court should concentrate on an assessment of the “seriousness and significance” of the breach in which relief from sanctions is sought.
2. The Court should consider why the failure occurred i.e. was there a “good reason?.
3. The Court should consider the circumstances of the case itself, so as to allow the Court the ability to deal justly with the application.
This stage includes consideration of a) the need for litigation to be conducted efficiently and at proportionate cost; and b) the need to enforce compliance with rules, practice directions and orders.
So there you have it clarity itself.
What is the upshot?
On the face of it, if the breach is not serious and significant then the Court should not have to look at stages 2 and 3 and the application should succeed, which is not too far from where we were prior to the clarification.
what is significantly better… is where the Courts do see a serious or significant breach
However what is significantly better than where we appeared to be, is where the Courts do see a serious or significant breach. The Courts post Mitchell were regularly saying if the breach is not trivial then tough luck on your application and the opposition smiled and took the windfall.
This draconian interpretation of Mitchell and the weighting of nearly 100% on stage 1 is the “misunderstanding that has occurred.”
Lord Dyson in providing clarity, has stated it is wrong to think that, ”if i) there is a non-trivial (now serious or significant) breach and ii) there is no good reason for that breach, the application for relief from sanctions must automatically fail. That is not so and not what the Court said in Mitchell.”
He also commented on the change in behaviours between the parties and the opportunism of some parties in benefiting from the other side’s failures. He stated, “we think we should make it plain that it is wholly inappropriate for litigants and their lawyers to take advantages of mistakes made by opposing parties in the hope that relief from sanctions will be denied and that they will obtain a windfall strike out or other litigation advantage. The Court will be more ready in future to penalise opportunism.”
Since Mitchell there has been a change in CPR allowing extensions of time of up to 28 days (CPR 3.8(4)), so the change in CPR and this clarity should mean the following:
1. A more common sense approach applied to applications by the Courts. The exact parameters of which is not yet entirely defined, trivial has gone but one man’s serious or significant etc…
2. A more conciliatory and common sense approach applied to applications by the lawyers.
3. Contested applications arising less frequently and probably only in exceptional circumstances.
Time will tell as to how much common sense is actually applied by both the Courts and the lawyers.
So on the face of it, life is less stressful for litigation lawyers but time will tell as to how much common sense is actually applied by both the Courts and the lawyers.
Finally one last note of caution to lawyers whose ducks are not all in rows, and are looking to return to the culture of making an application rather than complying with the Court timetable. Having 3a and 3b, means that a non-compliance with rules, practice directions and orders will not be tolerated.
The pendulum has swung back a bit, how far is yet to be seen. But Woolf, Jackson, Mitchell and now this clarification all show the importance of running litigation without the need to make an application for relief from sanctions.