The Courts have adopted a new test to assess applications for relief from sanctions, which demonstrates a more reasonable approach than used recently. However, it remains important to ensure compliance.
During litigation, courts often impose sanctions upon parties when they fail to comply with Court rules, orders or deadlines and in recent months (following the case ofMitchell) the application of this has become extremely strict. A party may apply to Court to be relieved from a sanction if one has been imposed, but courts have been very reluctant to grant relief except for where extraordinary circumstances have led to the party’s failure of compliance.
The new test
The Court of Appeal has now devised a new three-stage test which courts will use when considering whether to grant an application for relief from a sanction:
- The Court will identify and assess the seriousness and significance of the party’s failure to comply with the rule/order/deadline. If the breach is not serious or significant, the Court will be more likely to grant relief from the sanction.
The Court will not consider any unrelated failures that have occurred in the past and any accumulation of non-trivial and insignificant previous breaches.
- The Court will consider why the failure or default occurred. Reasons such as the pressure of work or being unable to travel to the office due to poor weather are unlikely to be accepted.
- When deciding whether to grant relief from the sanction, the Court will consider all of the circumstances of the case in order to deal with the application fairly. However, it will also consider whether the breach prevented it or the parties from conducting the litigation efficiently and at a proportionate cost and give weight to the importance of enforcing compliance with court rules and deadlines.
Warning – do not take advantage of your opponent!
The Court made clear that parties should not attempt to take advantage of minor inadvertent errors made by opposing parties in the hope of receiving a tactical advantage (such as the opposing party receiving a sanction or the case being struck out). This practice had arisen following the approach adopted by the courts. If a party attempts to do this now it may face adverse costs consequences at the end of the litigation.
Although the new test appears to be more reasonable than the previous approach taken by courts in recent months, we recommend that you continue to always work with your legal representatives to meet court deadlines and comply with any court orders to which you are subject, otherwise it is likely that the Court will impose sanctions on you. It is also advisable to be reasonable when responding to failures of compliance by your opponent in order to avoid incurring adverse costs consequences at the end of litigation.