The Court of Appeal has today endorsed the "robust" approach to sanctions imposed by the revised Civil Procedure Rules on parties that fail to meet procedural deadlines or otherwise comply with the rules and court orders. Costs budgets, in particular, must be submitted on time if a party is to recover the bulk of its legal costs after winning a case. The decision is a major boost to Lord Justice Jackson's vision of a more efficient, and less expensive, system of civil justice (see our March 2013 newsflash summarising his reforms).
The decision concerned proceedings arising from the "Plebgate" affair that led to the resignation of former UK Cabinet Minister Andrew Mitchell MP. In the main proceedings, Mr Mitchell's solicitors had failed to submit a costs budget on time, and did so only after being prompted by their opponent and the court. Extra time was not requested in advance, and no good reason was given for the delay. Litigants in other proceedings were also inconvenienced as a result of the costs management hearing being rescheduled.
At first instance, Master McCloud applied the sanction stated in the rules: that the defaulting party "will be treated as having filed a budget comprising only the applicable court fees" (new CPR 3.14). She then went on to refuse an application for relief from this sanction, ie for it to be disapplied, citing new CPR 3.9(1). This requires the court to consider all the circumstances of the case, but to look in particular at two factors: the need for litigation to be conducted "efficiently and at proportionate cost", and the need to "enforce compliance with rules, practice directions and orders".
On appeal there was some debate about the applicability of the new rules, given that Master McCloud's decision was made in the context of a pilot scheme which followed the new provisions of the CPR but allowed the court a greater discretion. However, the Court of Appeal decided that this was essentially irrelevant. They also held that the two factors set out in CPR 3.9(1) should be given special emphasis. This meant in practice that a sanction should be disapplied only where the breach of a rule or order was trivial or there was "good reason" for it, eg a party or its solicitor suffering from a debilitating illness or being involved in an accident. A court might be more flexible where extra time was requested in advance, rather than after a deadline had been missed, but otherwise the court's approach should be "robust". Only in this way could the court ensure justice for all court users, and not just for the parties directly concerned.
At the end of the Court's judgment, the Master of the Rolls commented:
"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."
It is not clear whether the decision will be appealed to the Supreme Court, but this seems unlikely given that it concerns questions of procedure.