Court of Appeal refuses extension of time to plead dates of damage in claims arising out of oil spill, meaning some 28,000 claims cannot proceed

The Court of Appeal has dismissed an appeal against a High Court decision refusing to grant the claimants further time to serve “date of damage pleadings” identifying when they say their cause of action accrued. The result is that the vast majority of the claims in the action, arising out of a 2011 oil spill off the coast of Nigeria, will not be able to proceed: Jalla v Shell International Trading [2021] EWCA Civ 1559.

The decision illustrates the dangers of waiting until the final day for complying with a deadline before applying for an extension of time, particularly where the deadline relates to an essential step in the case. In such circumstances, while the court will will take into account the consequences of refusing the application in deciding whether to exercise its discretion to extend time, the fact that those consequences may be draconian will not in itself guarantee a positive outcome to the application.

The decision is also of interest for the view that the court should apply, by analogy, the rigorous approach the courts adopt in considering whether to grant a party relief from sanctions, ie the three-stage test set out in Denton v TH White Ltd [2014] EWCA Civ 906 (considered here) as to (i) whether the failure to comply with the deadline was serious or significant, (ii) whether there was a good reason for it, and (iii) whether in all the circumstances it is appropriate to grant relief, bearing in mind the need for litigation to be conducted efficiently and at proportionate cost, and the need to enforce compliance with court rules and orders.

Previous case law had shown that the courts will generally adopt that approach where a party applies for a retrospective extension of a deadline that has already expired. This shows that the same approach may be adopted, in some circumstances, even where the application is made in time. Continue reading

Split trials, supplemental statements and the need for relief from sanctions

The judgment from the pre-trial review in the long-running Tesco Litigation (a securities class action) has illustrated the need for clarity as to the issues to be dealt with, and the evidence needed, in each stage of a split trial, as well as the need for relief from sanctions where a party seeks to serve supplemental statements after the deadline for exchange of witness evidence has passed: Manning & Napier Fund, Inc & Anor v Tesco Plc [2020] EWHC 2106 (Ch).

In this case, the claimants only belatedly appreciated that issues of reliance and causation relating to their lost profits claim were to be dealt with in the first trial in the action, and accordingly sought to serve supplemental witness statements addressing those issues long after the deadline for exchange of witness evidence had passed. As a result, the court said, the claimants had to satisfy the requirements for the grant of relief from sanctions, which the court described as “a considerable hurdle to surmount so late in the day”.

The case serves as a reminder that, where a party seeks retrospective permission to file witness evidence out of time, the courts will apply the same rigorous approach as they do to an application for relief from sanctions – applying R (Hysaj) v Secretary of State for the Home Department [2015] 1 WLR 2472 (considered here) and the three-stage approach to application for relief from sanctions established in Denton v TH White Ltd [2014] 1 WLR 3926 (considered here).

In this case, the court considered the breach to be serious and significant, and while the error was “readily understandable” it did not amount to a good reason for the breach. Overall, and despite the court’s reluctance to make an order which could deprive the claimants of the chance to obtain full recovery, the court held that the application for relief from sanctions should be refused (and therefore the supplemental evidence not admitted) unless the claimants provided sufficient disclosure in support of the claim by 14 August and the resulting extra work for Tesco in processing the disclosure was fairly and proportionately manageable, bearing in mind the need to prepare for trial.

For more information on the case, and in particular the implications of decisions relating to split trials in securities class actions, see this post on our Banking Litigation Notes blog.

 

Courts relax rules on agreeing extensions to procedural deadlines in light of COVID-19 disruption

A new Practice Direction (PD 51ZA) took effect yesterday. It is designed to introduce additional flexibility for parties to agree extensions of time where their ability to comply with deadlines is affected by the COVID-19 pandemic, and to ensure that the court takes into account the impact of the pandemic when considering whether to grant an application for an extension.

Under the new provisions, parties can extend time by written agreement for up to 56 days, rather than 28 days as it was previously. Any extension beyond 56 days will require an application for the court’s permission, which will be considered on the papers (though an order made on the papers must, on application, be reconsidered at a hearing).

The PD also provides: “In so far as compatible with the proper administration of justice, the court will take into account the impact of the COVID-19 pandemic when considering applications for the extension of time for compliance with directions, the adjournment of hearings, and applications for relief from sanctions.”

Anna Pertoldi
Anna Pertoldi
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Maura McIntosh
Maura McIntosh
Professional support consultant
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COVID-19: The evolving picture for remote hearings in the English courts

In our post last Friday, we outlined how the courts were adapting to the challenges posed by the Covid-19 crisis, and in particular the announcement from the Lord Chief Justice that hearings would be held remotely where possible. Since then events have moved quickly, with the Prime Minister’s announcement earlier this week essentially putting the UK in lockdown. That has led to a rapidly evolving picture as to whether and when court hearings will be held and in what form. Below we summarise where things appear to stand at the moment.

Courts’ operational position

What is clear is that very few, if any, hearings in civil cases are being held face-to-face. The courts service has set up a new web page which provides a helpful summary of the courts’ operational position during the pandemic, which is to be updated by 9am daily.

Today’s update emphasises that the courts are avoiding physical hearings and arranging remote hearings wherever possible. However, it also states, rather starkly: “High Court and Court of Appeal are only covering urgent work”. That appears to indicate a change of tone from previous messages which suggested that court business would continue, albeit remotely, including for final hearings and hearings with contested evidence – though of course some adjournments would be inevitable.

The update does also note that the courts are “looking at how we prioritise work and deliver essential services over the coming weeks”, and so hopefully any restriction to dealing with urgent work only will be short-lived. And there may also be some ambiguity as to what is meant by urgent work in this context. It is of course understandable that the courts will be prioritising more urgent matters in current circumstances, but it is hoped that ordinary business is not allowed to grind to a halt during what could be a significant period of disruption caused by the pandemic.

Hearings on paper?

The Lord Chief Justice’s message to the judiciary, which we reported on last week, noted that in the current crisis: “Many more procedural matters may be resolved on paper within the rules”. It seems, however, there are limits to the courts’ willingness to move to determining matters on the papers.

In a Chancery case reported on Lawtel this morning, Conversant Wireless Licensing SARL v Huawei Technologies Co Ltd (Judge Hacon, 25 March 2020), the court rejected the claimant’s legal team’s suggestion that a trial concerning FRAND licenses could be conducted largely on the papers, with brief Skype hearings only for the purpose of dealing with any questions the judge had after reviewing written submissions and evidence.

Although the legal team was “commended” for suggesting an alternative way forward, the judge said that, at present, neither the CPR nor the Lord Chief Justice’s or Chancellor’s guidance permitted the trial to be conducted in that way. There were issues which required cross-examination, and significant costs involved. Accordingly, the trial was adjourned, with the parties given permission to seek a new trial date on the first available date after 1 October 2020.

CPR and Practice Direction amendments

A new Practice Direction (PD) 51Y was introduced yesterday, with immediate effect, in relation to video or audio hearings during the Coronavirus pandemic. The changes are to:

  • Clarify that the court can direct that a remote hearing be held in private if it is not practicable to broadcast the hearing simultaneously in a court building and it is “necessary to do so to secure the proper administration of justice”. This is in addition to the power to direct a private hearing under CPR 39.2.
  • Confirm that a direction for a private hearing may not be made under the above provision “where a media representative is able to access proceedings remotely while they are taking place”. Where a media representative does access the proceedings remotely, it will be considered a hearing held in public.
  • Clarify that the court must direct that a remote hearing held in private be audio recorded, where that is practicable, and may also direct that it be video recorded.
  • Provide for the public to have access to such recordings, with the court’s permission.

The Civil Procedure Rule Committee also sent out a message yesterday saying that “CPR Updates in response to the COVID-19 outbreak remain under urgent consideration” and are likely to be made at short notice.

Natasha Johnson
Natasha Johnson
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Anna Pertoldi
Anna Pertoldi
Partner
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Richard Mendoza
Richard Mendoza
Senior associate
+44 20 7466 2024
Maura McIntosh
Maura McIntosh
Professional support consultant
+44 20 7466 2608

COVID-19: Impact on civil litigation in England and Wales

With the effects of the COVID-19 outbreak continuing to take hold on nearly all aspects of day-to-day life, what does this mean for the continued operation of the judicial system, and more specifically any court proceedings that businesses may be involved in or contemplating?

Where proceedings are already on foot, businesses may have dates fixed for upcoming hearings and will be eager to know, for example, whether and how these are likely to proceed, how key participants (witnesses, experts, counsel and even judges themselves) will be able to take part, and in what format hearing bundles are expected to be prepared. Where there is no trial or other hearing imminent, parties may still want to know what impact there will be on the day-to-day running of the case, including the implications for deadlines.

One impact of the current uncertainty is that many businesses and their counterparties are exploring their options and rights in relation to their contractual arrangements, and may be looking to trigger force majeure or MAC clauses, or may be at risk of imminent default. They will therefore be particularly concerned as to the impact of any closure of court offices or delay to court business, including on their ability to seek urgent relief. Access to the courts is likewise critical for those businesses experiencing acute financial distress and contemplating some kind of insolvency procedure.

We are in the early days of this crisis and events are moving very quickly – in relation to court procedures as in many other areas. We are closely monitoring communications coming from the judiciary and the court service, which are evolving as the situation develops. The Lord Chief Justice yesterday sent a message to judges in the Civil and Family Courts which gives a clear indication of the judiciary’s current approach, including their commitment to continuing the work of the courts as a vital public service. Key points from the Lord Chief Justice’s message include:

  • The default position now must be that hearings should be conducted with some or all participants attending remotely, where that is possible. Court rules are flexible enough to enable telephone and video hearings of “almost everything”, and any legal impediments will be dealt with.
  • The courts service is working urgently on expanding the availability of technology, but in the meantime the courts will make use of phones, video facilities and Skype. Many more procedural matters may be resolved on paper within the rules.
  • The courts will have to use technology to conduct business which even a month ago would have been “unthinkable”, including final hearings and hearings with contested evidence, as otherwise “there will be no hearings and access to justice will become a mirage”.
  • If too much court business is adjourned there will be inevitable backlogs and delays which will build to an intolerable level. Judges are urged, before agreeing to adjourn any hearing, to use available time to explore with the parties the possibility for compromise.
  • However, it may be difficult to maintain trials and final hearings in the short term, not least because of the inability of people to participate. As events develop, individual decisions on priorities and practicalities will have to be made. The message is to do what can be done safely.
  • Some types of application are likely to be urgent and may be unsuitable for telephone hearing (such as applications relating to injunctions and committal). Arrangements will be needed to hear them safely.

Following on from the Lord Chief Justice’s message, we are aware of a number of cases in which arrangements are being made for trials or other hearings to be conducted by telephone or video. So the judiciary is clearly on board with this necessary change of approach. The courts service has published new guidance on telephone and video hearings to facilitate this change, and the Business and Property Courts have also prepared a protocol regarding remote hearings. (Update 23 March 2020: That has been superseded by a new protocol regarding remote hearings which is not limited to the Business and Property Courts but applies to hearings of all kinds, including trials, applications and those in which litigants in person are involved, in the County Court, High Court and Court of Appeal (Civil Division). It is similar, however, to the version introduced last week for the Business and Property Courts. Note also this information published on 18 March relating to Queen’s Bench Masters hearings.)

It seems that the courts are also showing increased flexibility regarding court deadlines, in light of potential difficulties arising from the Covid-19 outbreak. One counsel’s chambers has published an update regarding what they refer to as the first “Covid-19 Direction”. In that case, the court granted an order doubling the period for which the parties can agree extensions to procedural deadlines without further order from the court (to 56 days, up from 28 days under CPR 3.8(4)).

As for court filings, a number of court counters have been closed, but most documents are filed using the online CE-file system in any event so physical attendance at court is not ordinarily necessary. Court users are being told to expect delays in the CE-file system due to a reduced workforce, but that should not affect limitation issues as claim forms are issued as at the date they are received onto the system. It seems increased flexibility is also being introduced for court bundles to be lodged electronically where it is not possible to lodge in hard copy.

The government also yesterday published its Coronavirus Bill which includes measures to allow video and audio hearings to be broadcast to the public, in the interests of continuing to promote the important principle of open justice. It also includes provisions allowing the court to direct that such proceedings be recorded, and banning the unauthorised (video or audio) recording or transmission of such proceedings.

For more information on the legal issues arising from COVID-19 and the impact on businesses globally, see our hub page: Navigating the COVID-19 outbreak.

Natasha Johnson
Natasha Johnson
Partner
+44 20 7466 2981
Anna Pertoldi
Anna Pertoldi
Partner
+44 20 7466 2399
Richard Mendoza
Richard Mendoza
Senior associate
+44 20 7466 2024
Maura McIntosh
Maura McIntosh
Professional support consultant
+44 20 7466 2608

Court of Appeal confirms “warehousing” a claim will not necessarily constitute an abuse of process

The Court of Appeal has upheld a High Court decision that a claimant’s unilateral decision not to pursue a claim it had commenced for a substantial period of time did not, on the facts of the case, constitute an abuse of process which justified striking out the claim: Aljawharah Bint Ibrahim Abdulaziz Alibrahim v Asturion Fondation [2020] EWCA Civ 32.

The Court of Appeal confirmed that such a decision, sometimes referred to as “warehousing”, may well amount to an abuse of process, but it will not necessarily do so. It will depend on the claimant’s reason for putting the proceedings on hold and the length of the period in question. The decision suggests that a finding of abuse is more likely where the claimant had no intention to bring the claim to trial, but there was no suggestion of that here.

If the court finds that there has been an abuse of process, it must still go on to consider whether it should exercise its discretion to strike out the claim, or whether some lesser sanction (such as tight directions to trial, an unless order or costs orders) may be more appropriate in the circumstances.

The Court of Appeal’s decision emphasises that, where a claimant wishes to put the proceedings on hold, it should obtain the defendant’s consent or the court’s approval to a stay of proceedings. A failure to do so could have far reaching consequences, though a strike-out was avoided in this case.

Alex Lerner, a senior associate in our disputes team, considers the decision further below. Continue reading

Second action allowed to proceed where earlier action struck out for breach of unless order

In a recent decision, the High Court has considered the proper approach to be taken in a second action where a previous action bringing the same claim has been struck out for failure to comply with an unless order: Davies v Carillion Energy Services Ltd [2017] EWHC 3206 (QB).

In summary, where the first action was struck out as an abuse of process, or the conduct of the first action was otherwise inexcusable, the second action will be struck out as an abuse save in “very unusual circumstances”. Where the first action was struck out for a single failure to comply with an unless order, the claimant will not necessarily be debarred from pursuing a second action, even if the claimant failed to apply for relief from sanctions in the first action – though that may be relevant in considering whether the conduct of the first action was inexcusable.

Each case will turn on its facts. In this case, the court’s decision appears to have been influenced by some doubt regarding the basis on which the first action was struck out and the fact that the claimant was a litigant in person. Although the court accepted that being a litigant in person did not excuse failures to comply with the CPR or court orders, it was appropriate to make some allowance for lack of familiarity with the detailed rules, in this case relating to pleading. Continue reading

Parties should not “abuse” the court’s tougher approach to relief from sanctions

The High Court has penalised a claimant in costs for requiring the defendant to apply for relief from sanctions, where the defendant had relied on a letter from the court which (arguably) set out the wrong date for filing costs budgets: Freeborn v Marcal [2017] EWHC 3046 (TCC).

The court emphasised that, following the court’s tougher approach to granting relief from sanctions established in Mitchell and Denton (as outlined here), it is extremely important for parties to ensure that they comply with the CPR. However, parties should not abuse this tougher approach. Parties need to consider whether it is proportionate and appropriate to require their opponent to make an application for relief from sanctions, or to oppose that application, in all the circumstances of the case.

This judgment is consistent with the warning in Denton that the courts are willing to penalise parties who try to hold their opponents to what the court sees as an overly strict approach to compliance with rules and court orders, and illustrates the fine balance litigating parties need to strike.

Laura Askew, an associate in our disputes team, outlines the decision below. Continue reading

Recent decisions show continuing trend for tough approach to rule breaches

Recent months have seen a number of decisions in which the English courts, both at first instance and on appeal, have re-emphasised the message that those who fail to comply with procedural rules should expect little sympathy, at least where they fail to take prompt steps to put matters right.

Over the past few years the courts have backed off from the excessively draconian approach seen immediately following the high-profile Mitchell decision in November 2013. This more measured approach was prompted in particular by the Court of Appeal's decision in Denton in July 2014 (considered here) which "clarified" the Mitchell guidelines.

However, since Denton we have continued to see cases which illustrate that the courts remain willing to take tough decisions against those who flout the rules. The decisions outlined below are consistent with that trend, and arguably mark an uptick in the frequency with which such decisions are being made in a wide variety of contexts. The obvious overall messages for litigating parties are:

  • ensure compliance with rules and orders so far as possible;
  • make an early application for more time where it appears a deadline cannot be met; and
  • apply promptly for relief from any applicable sanction where things have gone wrong.

Continue reading

Court of Appeal upholds order limiting recoverable costs to court fees where party failed to file costs budget

Lord Justice Jackson has delivered the leading judgment dismissing an appeal against imposition of the so-called "Mitchell" sanction where a party failed to file a costs budget when required to do so, so that he was treated as having filed a budget limited to court fees: Jamadar v Bradford Teaching Hospitals NHS Foundation Trust [2016] EWCA Civ 1001.

Over the past couple of years the court's approach to procedural failings has eased off from the overly draconian approach taken in the aftermath of the high-profile Mitchell decision in November 2013, in particular in light of the Court of Appeal's "clarification" of the Mitchell guidance in its Denton decision in July 2014 (see post). There are fewer cases these days in which parties even attempt to take their opponents to task for minor breaches – in part because heavy costs sanctions may be imposed on those who seek to take unreasonable advantage of an opponent’s breach.

However, it is by no means plain sailing for those who fail to comply with court rules and orders. The present decision highlights the continued scope for tough decisions, and the appeal courts' reluctance to interfere with a lower court's decision in this area; here, Jackson LJ commented that other judges might have taken a more lenient view, but the judge made no error of principle and it was a decision he was entitled to reach within the ambit of his discretion.

The decision also acts as a reminder that costs budgets must be filed in time or a party risks facing serious restrictions on its recoverable costs. If in doubt as to whether a budget is required, the safe course is to assume that it is.

Continue reading