The recent case of Active Photonics(1) illustrates how the court will apply its discretion to grant relief from sanction under Civil Procedure Rule 3.9 where a party has failed to comply with an 'unless' order.
When the court makes an unless order it is usually in circumstances where a party has failed to comply with previous case management directions and, in simple terms, the court's patience has reached its limit. The order directs that unless a party carries out a particular step, it will be debarred from the case. For example, the court may order that unless a claimant files its witness evidence by a particular date, its claim will be struck out.
In February 2011 the claimant issued a claim against the first defendant in the Patents County Court alleging patent infringement. In April 2012 the claimant applied to join the second defendant in the proceedings. A case management conference took place in June 2012 and the second defendant was joined.
The second defendant's defence was due in August 2012, but this deadline was missed. The second defendant's solicitors then came off the court record. In October 2012 Mr Brooks, a director of the second defendant, wrote to the court. The letter stated that the second defendant did not believe that it had infringed the patent and included numerous exhibits. As a result, the court ordered another case management conference.
The second case management conference took place in November 2012, at which Brooks represented the second defendant. The court's view was that the second defendant was responsible for a significant part of the difficulty in keeping the case on track. The court issued an unless order requiring the second defendant to serve its defence within a fortnight, in default of which the second defendant would be debarred from defending the claim and judgment would be entered for the claimant.
This deadline was missed, but three days after the deadline the second defendant filed and served its defence. The claimant made an application contending that the defence was out of time and the unless order should take effect. Brooks then wrote to the court, apologising and stating: "If there is anything I can do to persuade the court to accept the late defence please let me know."
The court refused relief to the second defendant and granted judgment for the claimant. The factors that the court will take into account in an application for relief from sanction include (pursuant to Civil Procedure Rule 3.9):
- the interests of the administration of justice;
- whether the application for relief was made promptly;
- whether the failure to comply was intentional;
- whether there is a good explanation for the failure;
- the extent to which the party in default has complied with other rules, practice directions, court orders and any relevant pre-action protocol;
- whether the failure to comply was caused by the party or its legal representative;
- whether the trial date or the likely trial date can still be met if relief is granted;
- the effect of the failure to comply on each party; and
- the effect that the granting of relief would have on each party.
The court noted the following:
- The second defendant had not actually made an application for relief. The court found this to be more than a mere technicality; the defendant had not put forward any reasons why relief should be given.
- The defence was only three days late. Although this was a short time overall, it had to be seen in the context of the second defendant's overall conduct in the dispute. The defence should have been filed several months previously and no proper excuse was given at the time.
- The defence itself contained no more than bare denials on certain key issues and articulated no reasons for the denials. Although the second defendant was without legal assistance, it had shown in its past correspondence with the court that it was capable of articulating arguments.
- The effect of granting relief against sanction, given the state of the defence, would be that further significant time would be required to manage the proceedings, although the trial date would not be put in jeopardy. Granting relief would put the other parties to more cost and trouble in ascertaining the second defendant's case. Case management orders can normally ensure that a party's case is clarified and put properly. However, on this occasion the proper time for that to happen had long passed.
- The effect on the administration of justice should be considered. The case had already used a large share of the court's resources and although there was nothing inherently wrong with this, the second defendant's conduct was the reason why there had been two case management conferences, rather than one.
For all of these reasons, relief was refused.
The courts are usually slow to take draconian measures which may be against the interests of justice. This is particularly the case with parties that do not have legal representation. However, the outcome of this case is unsurprising. The second defendant had made minimal effort to articulate properly its defence, to explain the reasons for delay or to explain the consequences if relief from sanction was not granted. It had received fair warning in the form of the unless order. In these circumstances, the court was entirely justified in deciding to protect the claimant's right to have its case properly and actively managed.
(1) Active Photonics AG v GB Solo Ltd  EWPCC 9.