Wednesday, 27 November 2013

A Chill Wind : Mitchell-v-News Group

A chill wind is blowing through the civil courts as the ramifications of Plebgate spread ever wider. That brief encounter at the gates of Downing Street has now led to a Court of Appeal decision on costs budgeting and relief from sanctions which is intended to "send out a clear message" to all involved in litigation: do not expect the courts to indulge failure to comply with rules, practice directions and orders. The judgement was given by the Master of the Rolls in Andrew Mitchell MP-v-News Group Newspapers Limited [2013] EWCA Civ 1526.

We cannot say we were not warned. Sir Rupert Jackson's Final Report warned that "Courts at all levels have become too tolerant of delays and non-compliance with orders. In doing so, they have lost sight of the damage which the culture of delay and non-compliance is inflicting upon the civil justice system."

And the Master of the Rolls said on 22 March 2013 that "The tougher, more robust approach to rule-compliance and relief from sanctions is intended to ensure that justice can be done in the majority of cases. this requires an acknowledgement that the achievement of justice means something different now. Parties can no longer expect indulgence if they fail to comply with their procedural obligations."

Mr Mitchell's lawyers failed to file a costs budget in time. Master McCloud directed that he should be treated as having filed a costs budget comprising only the applicable court fees. The impact of that decision was likely to be a shortfall in potentially recoverable costs of about £500,000 (yes, five hundred thousand pounds). This was still about £90,000 less than the Defendant's budget which was filed in the nick of time. The Claimant's costs budget was 6 days late. The Master later refused to grant relief under CPR 3.9 from her first decision. The Court of Appeal stated that the question at the heart of the appeal is "how strictly should the courts now enforce compliance with rules, practice directions and court orders." The answer given: very strictly indeed.

The Court of Appeal upheld both orders. In doing so it gave a passing wrist-slap to the High Court Judges in Wyche-v-Careforce Group Plc [2013] EWHC 3282 and Raayan Al Iraq-v-Trans Victory Marine Inc [2013] EWHC 2696 for not having got with the programme (for the avoidance of doubt, my words not those of Lord Dyson).

The Court was not attracted by the suggestion that whenever a sanction is imposed regard should be had to proportionality . In relation to CPR 3.14 - which was applicable in this case "by analogy" - the Court said that the sanction for late filing (no costs save for court fees) will usually apply unless (i) the breach was trivial or (ii) there was a good reason for it. Partial relief (as opposed to upholding the full sanction) was to be discouraged.

So, the delay of  six days was not regarded as minor or trivial - it resulted in an abortive costs budget hearing listed for the day after actual filing by the Claimant. Neither was there a good excuse - rather chillingly for the individual concerned and the Bar generally, the reason given for the delay was that the solicitors had been "delayed in receiving Counsel's figures despite chasing for these daily since the middle of last week."

The Master of the Rolls ended his judgment by saying, "we hope that our decision will send out a clear message. If it does, we are confident that, in time, legal representatives will become more efficient and will routinely comply with rules, practice directions and orders. If this happens then we would expect that satellite litigation of this kind, which is so expensive and damaging to the civil justice system, will become a thing of the past."

This was a decision "pour encourager les autres". Perhaps because senior judges see a disproportionate number of cases where there have been failures to comply with rules and orders, they have a jaundiced view of litigators. Surely, legal representatives do already routinely comply although mistakes are sometimes made. The sanction in this case is very harsh. Either Mr Mitchell will not be able to afford to continue his claim, or some arrangement, involving insurers or otherwise, will have to be made to provide for his representation at an estimated cost of £1/2 m. All of us involved in litigation may have reason to fear that professional indemnity insurance premiums will rise further.

This is an important decision. The message is indeed loud and clear: you fail to comply with any rule, order or direction at your peril.

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