Supreme Court on repeated applications for relief from sanctions: The attention of the Supreme Court was given over to relief from sanctions applications in the case of Thevarajah v Riordan 23 in December 2015. The appellant failed to comply with an order for disclosure and found itself on the wrong end of an ‘unless order’, which it then breached. An application for relief from sanctions was made and refused such that the appellant was disbarred from defending the claim which proceeded to trial. The day before the trial started, and armed with new solicitors, a fresh application for relief from sanctions was made, this time supported by an affidavit and accompanied by full disclosure of the documentation envisioned by the original order. The trial judge granted relief but that decision was overturned by the Court of Appeal on the basis that the appellant had failed to show that there was any material change in circumstance between his two applications for relief.
Delivering the unanimous decision of the Supreme Court, Lord Neuberger emphatically approved the approach to relief applications set out in Mitchell 24 and Denton.25 He also endorsed the words of Rix LJ in Tibbles v SIG plc (trading as Asphaltic Roofing Supplies) 26 when Rix LJ explained that a court which was asked to exercise its r.3.1(7) power to vary or revoke an order (which reasoning has equal validity in the context of an application for relief under r.3.9) should only normally do so if there had been a material change of circumstances since the order was made, where the facts on which the original decision had been made had been misstated or where there had been a manifest mistake on the part of the judge in formulating the order. As such, Lord Neuberger made clear that it was not normally open to a party subsequently to ask for relief which effectively required that the original interlocutory order refusing relief be varied or rescinded, unless there had been a material change in circumstances since the order was made. Further, the fact that the appellant had latterly complied with the unless order would not usually be a material change of circumstances entitling a party to make a second application for relief from sanctions.
Proof if ever it was needed that Mitchell and Denton are here to stay, and that any party in breach of an unless order who seeks relief from sanctions should put all their effort and energy into complying with the order before their first application for relief from sanctions is heard.
Court sends a message on court fees: In Lewis v Ward Hadaway 27 31 claimants issued professional negligence claims at or near the end of limitation against their former conveyancing solicitor. The relevant letters of claim indicated that each claim was worth hundreds of thousands of pounds but the claim forms deliberately stated the value of the claim being brought to be less than £15,000 so that a much reduced claim fee was paid to the court. In every case the claim forms were then amended before service to reflect the larger claims and the balance of the correct fee was then paid. In a bold move, no doubt informed by a long history of dealing with the particular firm of solicitors instructed by the claimants who had found themselves in trouble for employing a similar practice in other cases, the defendant applied to strike out the claims on the basis that the claimant’s conduct in issuing claim forms at a deliberate undervalue in order to stop time running for limitation purposes amounted to an abuse of the process of the court or otherwise likely to obstruct the just disposal of the proceedings.
John Male QC, sitting as a deputy High Court judge, found that the claimant used the court process for a purpose or in a way which was significantly different from the ordinary and proper use of that process and such conduct did amount to an abuse of process. However, as the potential liability of the defendant for the claims was £9m and given the limited prejudice caused to the defendant by the claimant’s conduct, particularly as they had delayed in making their application and could still take limitation points in any event,28 he went on to find that it would be disproportionate for the claims to be struck out in consequence of that abuse of process.
Albeit personal injury claims will often increase in value over time as expected recovery periods fail to eventuate, the profession is suitably warned that the practice of paying deliberately low court fees to stop limitation running has (on more than one occasion) been considered an abuse of process and is an extremely risky tactic to employ in the current climate. Practitioners might also have noticed that district judges are increasingly issuing orders at allocation stage for the payment of the proper issue fee where it is obvious that there has been an attempt to save money in the short term by understating the true value of the claim.