Dispute Resolution analysis: Paul Edwards, national head of costs at Hill Dickinson LLP, advises that although the amended CPR and the decision in Mitchell make it clear that compliance with rules and directions is now expected, McTear confirms again that applications for relief should not be left until the last minute, particularly if that impacts on the trial.

Original news

McTear and another v Englehard and others [2014] EWHC 722 (Ch), [2014] All ER (D) 150 (Mar)

The defendants sought an extension of time or relief from sanctions with respect to service of witness statements and disclosure by list, and permission to re-amend the amended defence by adding pleas. The claimants sought an order striking out the amended defence. The Chancery Division dismissed the defendants' applications, but decided that it would be a disproportionate response to all the defendants' defaults to strike out a pleaded case that had been placed on the record before any of the recent failures to comply with court orders and the Civil Procedure Rules, SI 1998/3132 (CPR) had occurred.

What does this latest decision tell us about the court's developing approach to the breach of court orders?

The decision is an important one because there had been a perception that the High Court were actually not that supportive of Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537, [2013] All ER (D) 314 (Nov). This may however have been attempts by prominent claimant commentators who had been trying to undermine the impact ofMitchell. That said, feedback provided to the Master of the Rolls, Lord Dyson, in a recent session in Manchester suggested that many lawyers felt that while district judges had embraced Mitchell and were being extremely strict this was not the case in the High Court where it was perceived that a number of recent decisions had attempted to backtrack from a position of strict compliance. While issues of consistency are bound to be relevant particularly in the early days of change, and particularly reforms to the scale of the civil justice reforms (CJR), all the messages from Lord Dyson and others were that rules were there to be obeyed and indeed Lord Dyson confirmed that he was 'unrepentant' at the Mitchell decision.

The court in McTear in both format and content sets off to reiterate that Mitchell is there to be followed. The judgment starts with a quote from Mitchell and a brief note of other subsequent cases and follows with initial thoughts that leave us in no doubt that the judgment is to be a strict one against the defaulting defendants. Richard Spearman QC, sitting as a Deputy High Court Judge, comments on the defendants' submissions that they 'reflect a lack of understanding of the appropriate way in which litigation should be conducted'.

The judgment, while of general application, does try to make it clear that it is decided on its own unique facts. It confirms that typically these sorts of case involve two scenarios:

·where there has been a breach, a further order attaching to it a sanction and then a failure to comply, or

·a scenario where an application for relief has been made a long time after the relevant steps ought to have been taken

The judge suggests that this case involves something different.

One interesting comment is the reaction of the court to the suggestion that applications for retrospective extensions should not be treated the same way as an application for relief. Such a submission was forcefully rejected and it was suggested that all these types of application would be decided by considering 'the overriding objective, a proper exercise of discretion under each material provision of the CPR, striking the balance of prejudice and justice as between the parties' and on this case 'not endorsing conduct such as has occurred in this case, whether it is properly regarded as showing disregard for rules and orders or the tactics of ambush'. Clearly, had the court accepted the defendants' submission that the principles of Mitchell did not apply then the impact of Mitchell would have been dramatically undermined.

What are the challenges facing lawyers post-Mitchell?

It should not be regarded as a challenge for lawyers to meet deadlines. Day-to-day challenges such as high volumes of work, issues on other cases or in our private lives are not to be taken into account when considering whether or not deadlines should be met.

The real challenges are the risk of professional indemnity claims that arise as a result of missing them and the fact that compliance with the rules and the potential to take advantage of an opponent's default may actually hinder the sensible progress and settlement of litigation. The courts have said that they will not support cynical attempts to take advantage of breaches but the potential remains, not least when the non-defaulting party is almost certainly going to recover its costs of the application for relief. It is likely that the courts may be inundated with application hearings.

Were there any particular features of this case that stood out?

While an extremely hard line was taken here (and that mere fact is important) on the facts of the case this should not come as too much of a surprise--so, to an extent the decision itself does not expand the law to a great degree. The judgment sets out a long list of eight different areas where the 'defendants decided to follow their own rules', including serious issues such as late production of evidence, late applications for relief and an attempt to bring expert evidence for which there was no permission.

The various cross-applications that were dealt with also took up two days of legal argument at a time when the trial should have already started--therefore it is clear that the defaults here were extremely contentious.

What should lawyers take from the case--especially in relation to the way in which litigation should be conducted?

The amended CPR and Mitchell make it clear that compliance with rules and directions is now expected, but this case confirms again that applications for relief should be made promptly and not left until the last minute, particularly if that impacts on the trial. It is also now clear that something to consider is how the non-defaulting party reacts. If a party wishes to take advantage of a default then it is important that an appropriate early protest is made, because this makes any delay in applying for relief less likely to be considered favourably.

This article was first published on Lexis®Library and Lexis®PSL on 1 April 2014. Please follow the links for a free trial of Lexis®Library and Lexis®PSL.