This week has seen the Court of Appeal, in a line up including the Master of the Rolls and Lord Justice Jackson, consider three appeals dealing with the fall out from the previous Court of Appeal decision in Mitchell v NGN heard last year. Judgment has been reserved. In this report we look at the three decisions and highlight some of the issues discussed in the hearings.
Court of Appeal
Monday and Tuesday this week saw a packed Court of Appeal as it heard three appeals against judgments seeking to apply the guidance set out last year in Mitchell. To some commentators and many practitioners that guidance has resulted in a draconian approach to the new test for relief from sanctions in CPR 3.9 which was introduced in April 2013 as part of the extensive Jackson reforms aimed at costs reduction in civil litigation. Other criticisms are the inconsistency of approach by the courts and the decrease in co-operation between parties when sanctions are looming on the horizon.
The legal world is placing a great degree of expectation on these hearing with:
- the court comprising the Master of the Rolls, Lord Dyson, who gave the judgment of the court in Mitchell, and Lord Justice Jackson whose report led to the implementation of the new provisions on relief from sanctions. The further Lord Justice being Lord Justice Vos
- the Law Society and Bar Council having provided submissions–both have been vocal in their concerns as to the impact of decision in Mitchell
Some positives can be seen for the hearings:
- subsequent Court of Appeal decisions have perhaps been seen as tempering the effect of the decision in Mitchell and this week it appeared to agree with the approach taken in Chartwell Estate Agents. There the Court of Appeal upheld a first instance decision granting relief from sanctions despite the non-compliance being neither trivial nor for a good reason. Despite, what might appear at first glance, to be a departure from the Mitchell principles, it remained in line with those principles. The decision showed that, although the two factors specified in CPR 3.9 will ‘usually’ prevail, there will be occasions where, given all the other circumstances involved, those factors carry less weight. For more detail, see: Court of Appeal: Endorses the Mitchell message, but with an unusual outcome (Chartwell v Fergies)
- the Court of Appeal seemed to accept this week the difficulty faced by practitioners and their clients of the inconsistency of approach by the courts as to the application of the guidance given in Mitchell. Some judges have sought to apply a sense of justice when applying the principles whereas other have simply applied a very mechanistic approach which has resulted in a diverse approach and no consistency in so far as practitioners and their clients are concerned
- the Court of Appeal, as already highlighted by Lord Justice Jackson in his judgment in Hallam Estates, recognised that the implementation of the Jackson reforms and the provisions in CPR 3.9 together with the guidance in Mitchell has led to cases in which a party is refusing to co-operate through agreement on the basis that the strict approach to the relief from sanctions by the courts could see them gain considerably from their opponents failure to comply. This has been tempered since 5 June 2014 with the introduction of the new rule at CPR 3.8(4) which enables parties to agree extensions of time without the continued imposition of the relevant sanction so alleviating the need for the separate relief from sanctions application*.
Whilst we will need to see the judgments, the indications from the court room would suggest that the Court of Appeal will take the opportunity to clarify the position in relation to relief from sanctions. Issues debated during the hearing included:
- the use by parties of taking opportunistic points, how to discourage such conduct and by what means eg where costs sanctions sufficient?
- the importance of the requirement to make a prompt application for relief from sanctions
- what is the appropriate threshold for the first stage of the test set out in Mitchell? The current test is that of triviality but would it be more appropriate to consider eg whether the breach was material?
- when considering whether there was a ‘good reason’ for the breach should this include matters within the party’s control or be limited to those outside it’s control?
- should different approaches be taken by the court depending on the circumstances? For example a deliberate breach or breach of an unless order?
- what is the impact of cumulative breaches? Is a breach to be considered as a standalone breach?
Keeping up to date
In relation to monitoring the progress of the appeals, at LexisNexis we have a court reporting team who have actively been doing this for us. As with the decision in Mitchell, as soon as the Court of Appeal judgment is available, we will provide details through our twitter account and blog and will of course analyse the decision and set out the practical implications in a report in LexisPSL DR.
You can follow us on Twitter at @LexisUK_DR.
* We sent subscribers our Practice Note on Buffer Agreements in our May newsletter (see also this post). If you’d like to receive this, ensure you’ve signed up in the box on the right but you can also leave your email address in the comments (we will pick it up prior to publishing the comment, so it won’t be made public, and we will email you the full analysis)