The Court of Appeal have now finally had their say on the Jackson Reforms: “…we hope that our decision will send out a clear message”. The message is that a “new more robust approach…” has arrived. Failure to file a costs budget in time will result in parties being “treated as having filed a budget comprising only the applicable court fees” and relief from sanctions will only be granted where there has been a “trivial breach” or where there is a “good reason”. The new approach “will mean that from now on relief from sanctions should be granted more sparingly than previously”.
Mr Mitchell’s case (Andrew Mitchell MP v News Group Newspapers Limited  EWCA Civ 1526) provided the perfect vehicle for the Court of Appeal. The Sun newspaper had reported that Mr Mitchell had engaged in a foul mouthed rant against police officers. Mr Mitchell issued proceedings alleging defamation on 7th March 2013. A CMC and costs budget hearing was fixed for 18th June 2013. On 17th June Master McCloud sent an e-mail to the parties’ solicitors noting there was no budget for the claimant. The budget was filed that afternoon with an estimated figure of £506,425. Master McCloud ordered that the claimant be treated as having filed a budget comprising only the applicable court fees and she adjourned the CMC and budget hearing to another date at which any relief from sanctions application would be heard. That date involved her moving another hearing which had been listed to deal with claims arising out of “asbestos-related diseases”. At that hearing she refused the application for relief from sanctions. Amongst other things she said there was no evidence of particular prejudice to Mr Mitchell, she took account of the Master of the Rolls’ speach on the Jackson Reforms which said that a tough approach was required so that justice could be done in the majority of cases. She said that the stricter approach under the Jackson reforms had been central to her approach.
The Court of Appeal upheld her decisions. As to confining the claimant to court fees, it said that CPR 3.14 (confining the defaulting party to court fees) was not just directed to the case of a party who does not file a budget at all. Budgets being filed in time (7 days prior to the hearing) was important in order to enable the hearing to be conducted efficiently and for discussions to take place beforehand. The judge was therefore not wrong to apply the sanction.
As to relief from sanctions, the Court of Appeal said that the provision in 3.14 “unless the court otherwise orders” involved the same considerations as relief from sanctions under CPR r.3.9. All the circumstances of the case should be taken into account but more weight should be given to the two factors listed in the new rule (directed at efficiency, proportionate cost and compliance with rules etc.). The Master of the Rolls cited and endorsed his speech on the Jackson Reforms about a more robust approach and taking account of the failures to comply on other court users (illustrated, as though almost by design, by vacation of the hearing of the asbestos-related claims).
Guidance was given by the Court of Appeal: relief will only be granted where the default is “trivial” for example where there has been a failure of form rather than substance and where a deadline has been narrowly missed. Where it is not trivial the burden is on the defaulting party to persuade the court to grant relief and it will need a “good reason”. Examples given were a document not being filed due to a party or solicitor suffering from a debilitating illness or an accident or where later developments in litigation show the period for compliance was unreasonable. Merely overlooking a deadline on account of work or otherwise was unlikely to be a good reason.
A key point for practitioners in difficulties is that applications for an extension of time made before time has expired will be looked upon more favourably than applications for relief made after the event.
The Court of Appeal found the perfect case to make their point. It involved a politician from one of the parties currently in government and which is presiding over the reduction of resources in the court system. The vacating of the asbestos-related claim illustrated the knock on effect of inefficiency and failure in one claim on other litigation. However the decision is extremely harsh: failure to comply by 7 days on the part of his solicitors has meant that Mr Mitchell will be unable to recover the costs of his action if he is successful. Those costs are estimated to be £506,425 – which suggests that the sanction is hardly proportionate to the breach. One wonders whether there is not in fact a much more appropriate sanction. Mr Mitchell’s solicitors have said that they will carry on and that he will not be affected financially by the judgment. But in other cases it might well lead to a claim for professional negligence – a step which would clog up the court system with more complicated satellite litigation. Are judges really to second guess what impact a failure might have on the court system as a whole when for the most part they have little evidence to assist them with attaching weight to this factor?The Master of the Rolls said in his speech that “the achievement of justice means something different now” – the extremity of this decision begs the question whether one would still define it as “justice” or just a hard form of utilitarianism.
Photo courtesy of freefoto.com (Photographer: Ian Britton)