Having taken a week or so to digest this decision (http://www.bailii.org/ew/cases/EWCA/Civ/2014/506.html) it is now time to provide an idiot’s guide to the judicial decision making behind the case. The facts are already well established so there is no need to repeat these.
The line-up needs to be considered.
In Chartwell, the appeal went before LJ Laws, Sullivan and Davis. This was a completely different line-up to Mitchell (LJ Richards & Elias). Now bear in mind that in Fred Perry the sitting judges were LJ Kay, Jackson & Lewison.
This means that most of the Court of Appeal have had a clear opportunity to show opposition to the Jackson reforms.
The Court of Appeal upheld the grant of relief from sanctions. This was where there was a breach of a court order, which was (i) not trivial or (ii) with good reason, but where the default was mutual.
As an almost preliminary point, the court dealt with an issue that the denial of relief from sanction would result in the Claimant’s claim failing in due course. LJ Davis confirmed the Mitchell approach and gave some guidance:
“the starting point should be that the sanction has been properly imposed and complies with the overriding objective”.
The consensus of the Bench
LJ Davis LJ gave the leading judgment. This was agreed with by LJ Sullivan, and only LJ Laws felt it necessary to elaborate. While LJ Laws agreed with the decision, he considered that the case had unusual facts associated with it, and that it really was an either-way decision (reading between the lines, he felt it was a case of “a plague on both your houses”).
As a practitioner, I am not persuaded that LJ Laws realises that the facts of simultaneous exchange for disclosure or witness statements is not uncommon.
The Court ruled that:
- both parties were at fault;
- the breach was not trivial; and
- there was no good reason for it.
The claimant did not have “good reason” for their default on the grounds of the defendants’ attitude toward disclosure. This was because:
- the defendant could have served witness statements by the specified date and then applied for second/supplemental statements after proper disclosure had been given;
- there was no justifiable reason for failing to seek an extension of time prior to the date of breach; and
- the defendant was not ready for exchange and did nothing to at least gain partial credit for their default (such as lodging their statements with the court and highlighting the breach at the same time).
Reading into the Judgment in detail
It should be taken from the judgment, as always, what is NOT the case.
In Chartwell the Court of Appeal made clear that the position is not that sanctions will always apply where there has been a more than trivial a breach of a rule, nor that relief from sanctions will only be granted in exceptional circumstances.
LJ Davis cross-referenced Mitchell at paragraph 57 of the judgment and stated:
“It must not be overlooked that the Court of Appeal in Mitchell did not say that the two factors specified in CPR 3.9 will always prevail, as a matter of weight, over any other circumstances in a case where the default is not trivial and where there is no good justification. It is true that it later stated that the expectation is that the two factors mentioned in CPR 3.9 will “usually” trump other circumstances. But it did not say that they always will”
The court also identified the increase in tactics and strategy being applied by many firms in litigation. He observed this in paragraphs 58 and 61 of the judgment, and drew attention to the fact that it would be increasingly difficult to benefit where there has been mutual breaches of Directions.
The consequences were addressed of failure, and the remedy left available to the claimant (i.e. the client directly). The Court of Appeal was very clear that the argument of a professional negligence claim against the claimant’s solicitors would NOT allow a fair remedy to the claimant. The irony of satellite litigation arising from such negligence claim was not lost on the Court of Appeal.
Article 6 of the European Convention on Human Rights did not have the door closed on such arguments, however it appears it would need to be limited to certain cases (this not being one of them).
What to take away from this if you find yourself in a similar position to this case
1. Lodge your statements with the Court if the other side has failed to give disclosure. Alternatively, serve a statement and apply to have permission to file a second statement (as this is likely to be granted).
2. If you are to be in breach, then apply for an extension of time at the earliest possible time.
Over and out.