Compliance with court rules and orders post-Denton: where are we now?

In its high-profile Mitchell decision last November, the Court of Appeal introduced tough new guidance on the court’s approach to granting relief from sanctions for breach of a court rule or order under the new CPR 3.9 brought in by the Jackson reforms. The decision led to a flood of satellite litigation in which parties sought to take their opponents to task for procedural failings and, in many cases, harsh sanctions were imposed for relatively minor breaches. In an effort to address these difficulties, the Court of Appeal “clarified” the Mitchell guidance in its Denton decision in July this year, replacing it with a new, more flexible three-stage test and warning of heavy costs sanctions for those who try to take unreasonable tactical advantage of an opponent’s breach (see post).

Since Denton, the number of reported decisions dealing with contested applications for relief from sanctions has reduced dramatically. Although some of that drop may be explained by the long summer court vacation, it does seem that the messages delivered in Denton are having the desired effect, at least in making parties think twice before adopting an uncooperative stance. This post looks at some of the trends emerging from the decisions we have seen to date.

A tempered approach

In Denton, the Court of Appeal recognised that the Mitchell decision had led to an overly draconian approach in some cases. So it is not surprising perhaps that the decisions we have seen reported since Denton have taken a more measured approach.

In a decision handed down earlier this week, Altomart Limited v Salford Estates (No. 2) Limited) [2014] EWCA Civ 1408, the Court of Appeal (Moore-Bick and Ryder LJJ and David Richards J) said the “rigour” of the decision in Mitchell had been “tempered” by DentonAltomart concerned the late filing of a respondent’s notice in relation to an appeal. Although the notice was issued “well out of time” (36 days late in the context of a 14 day time limit), the appeal was not due to be heard for some months and there was no reason to think the opponent would suffer undue prejudice if the extension was granted. Although the delay was considerable, it was likely to have had little, if any, effect on the course of the proceedings. In those circumstances the delay could not properly be regarded as serious or significant, and that suggested relief should probably be granted. The explanation given for the delay was not persuasive, but that did not matter. There was nothing else in the respondent’s conduct of the proceedings or the circumstances generally that militated against granting relief and, the court said, it would not be appropriate to refuse relief simply as a punitive measure.

Various High Court decisions have taken a similar approach in granting relief from sanctions. In Caliendo v Mishcon de Reya [2014] EWHC 3414 (Ch), for instance, Hildyard J granted relief for the late filing of a notice of funding. He concluded that the breach had not occasioned serious and/or significant adverse effect on the efficient conduct of the litigation in question or other litigation before the courts. Accordingly, despite the need to encourage compliance, he did not consider it just to withhold relief from sanctions.

The decisions have not however all been one way. In Lictor Anstalt v Mir Steel UK Limited [2014] EWHC 3316 (Ch), Asplin J refused an application for relief in respect of a witness statement served 19 months late and in the course of trial. She said the failure was serious and significant, as its production at such a late stage would inevitably disrupt the conduct of the litigation. There was no good reason for the failure, which arose from a failure to analyse the pleadings adequately. Such legitimate steps the opponent would wish to take to deal with the evidence would inevitably jeopardise the trial timetable and therefore jeopardise the efficient conduct of litigation in general. These factors militated against granting relief. It is worth noting, however, that on the facts of this case relief might have been refused even under the less stringent test for relief from sanctions that applied before the Jackson reforms.

Full circle?

So the general trend since Denton appears to be for the courts to grant relief from sanctions unless a breach will disrupt the conduct of the litigation in question or litigation generally. Does that mean we are back where we started before the Jackson reforms introduced the new test for relief from sanctions, aimed at making the courts less tolerant of unjustified delays and breaches of rules and court orders?

It would certainly be dangerous to assume a lenient approach. Although the pendulum has swung back from the post-Mitchell extremes, it seems unlikely that the courts will let parties get away with bad behaviour to the extent they were able to before the reforms. In Denton, the majority of the Court of Appeal held that the efficient conduct of litigation and the need to enforce compliance should be given particular weight in considering an application for relief. Anything less, it was said, would inevitably lead to the court slipping back to the old culture of non-compliance which the Jackson reforms were designed to eliminate.

And even Lord Justice Jackson, who was in the minority in Denton in advocating a less stringent approach (that those factors should be considered in every case but not given special weight), said at a recent Law Society conference: “It is very important that in the euphoria with which some have greeted Denton, we do not slip back into the ‘old’ culture of non-compliance …”.

In light of these messages, and the court’s broad discretion in deciding whether to grant relief, the only safe course remains strict compliance.

Implied sanctions

One area that has been uncertain is precisely when the Mitchell / Denton guidance applies. Is it only where a party has breached a rule or court order which spells out the sanction on breach? Or can it also apply in the absence of an express sanction?

The Court of Appeal had previously clarified that an application for an extension of time is not to be treated as an application for relief from sanctions, so long as the application notice is filed before the deadline expires (see post). It was not however clear whether that meant an out-of-time application would always be treated as an application for relief.

In Altomart, above, the Court of Appeal referred to previous authorities establishing that an application for permission to appeal out of time is analogous to an application under CPR 3.9 and is therefore to be decided in accordance with the same principles. The reasoning is that there is an implied sanction since, without the requested extension, the appeal cannot proceed. The same reasoning applied, the Court said, to a respondent’s notice: unless the extension was granted, the respondent would not be able to rely on additional grounds for upholding the lower court’s judgment. That was also an implied sanction and therefore the Mitchell / Denton guidance applied with equal force.

What is still unclear, though, is how far this approach extends. In many scenarios where there is a deadline to take some procedural step, it could be said that the implied sanction for missing the deadline is that the step cannot be taken unless an extension of time is granted. Does that mean that all such situations are cases of implied sanction and therefore the Mitchell / Denton guidance applies? The boundaries remain to be tested.

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