Jackson and civil litigation
Regular readers of this column will need no introduction to the Jackson reforms, nor to the question of whether these are welcome in principle. For many litigators, that question may take some time to resolve. In the interim, however, the fact is that the reforms are now upon us whether we like them or not. Accordingly, the focus of this column is on how best to navigate the problems that Jackson is throwing up in practice.
The best starting point is to summarise the decisions in which the courts have shown their post-Jackson teeth (even if some defaulting parties have ultimately escaped largely intact). These summaries will be less detailed than those usually found in this column so as to allow space for more practical guidance later on.
Fons HF v Corporal Ltd and another
In this decision, HHJ Pelling QC, sitting as a judge of the High Court in the Manchester District Registry, considered applications for an extension of time to file witness evidence. Both parties had missed the deadline for doing so, albeit that in the claimant's case, this was due to waiting for the defendant to exchange with them. The judge held as follows:
"I have come very close to refusing an extension to either of the parties. As I have explained the amended Civil Procedure Rules now require the court to pay close attention on the failure of parties to comply with rules, directions and orders. A failure to comply with a rule, direction or order is of itself a clear breach of the overriding objective and is likely to result in severe sanctions.
In the end I am only persuaded to extend the time for the filing of witness statements because this hearing is taking place only a very short while after the amendment of the CPR and because the period that has elapsed since the final extension expired is relatively short. However, all parties and the wider litigation world should be aware that all courts at all levels are now required to take a very much stricter view of the failure by parties to comply with directions, particularly where the failure to comply is likely to lead into a waste of the limited resources made available to those with cases to litigate."
(Fons HF v Corporal Ltd and another  EWHC 1278, at paragraphs 8, 10.)
The judge ultimately granted an extension only until 4 pm on the day after the hearing before him, with an order that any defaulting party should be debarred from relying on any evidence at trial.
Venulum Property Investments Ltd v Space Architecture Ltd and others
In this decision, Edwards-Stuart J refused an application for an extension of time to serve particulars of claim on some parties in a multi-party action. The facts were:
- A claim form had been issued in time.
- The claimant's solicitors had misunderstood the combined effect of CPR 7.4(2) and 7.5(1) and believed that they had longer to serve the particulars of claim than was in fact the case. Consequently, they failed to serve these in time.
Counsel for the defendants submitted, and the judge agreed, that although the claimant's application had been issued before 1 April 2013, it nevertheless fell to be considered against the revised CPR 3.9.
In refusing the application to extend time, the judge relied on three factors. Two are case specific and related to the merits of the claims and the fact they had been brought close to the limitation date. The third was "the effect of the new "post-Jackson" regime approach to the enforcement of, and compliance with, orders and time limits." Overall, the judge held that:
"when the circumstances are considered as a whole, particularly in the light of the stricter approach that must now be taken by the courts towards those who fail to comply with rules following the new changes to the CPR, this is a case where the court should refuse permission to extend time. The claimant has taken quite long enough to bring these proceedings and enough is now enough. I therefore refuse this application."
Berg v Blackburn Rovers Football Club and another
In this decision, also of HHJ Pelling QC sitting as a High Court judge in the Manchester District Registry, the defendants were refused permission to withdraw an admission. The decision turns primarily on the weak nature of the defendants' case were the admission to be withdrawn, but in the course of judgment it was held that:
"On 1st April 2013, the overriding objective was radically amended. It now places emphasis not merely on the need to deal with cases justly but to do so at proportionate cost, expeditiously, to enforce compliance with the Rules and orders and to allot to each case an appropriate share of the court's resources. This amendment of the overriding objective is likely to have a significant impact on the approach to be adopted to applications of this kind, which will now be approached by courts much more rigorously than perhaps has been the practice in the past, particularly where formal admissions are made on behalf of parties represented by experienced and specialist professional advisors."
(Berg v Blackburn Rovers Football Club and another  EWHC 1070 (Ch), at paragraph 29.)
Under this intensified scrutiny, the application failed.
Murray and another v Neil Dowlman Architecture Ltd
In this decision, Coulson J granted an application to rectify the approved costs management order to make plain that the approved budget excluded the success fees and the after the event (ATE) insurance premium. That point had remained unclear due to the failure of the claimant's solicitors to complete the correct form. Consequently, the claimant had to bear the costs of the application. The broader, and much more significant, point was the obiter statement that:
"I am not persuaded that the absence of prejudice alone would be sufficient (either in this case or more widely) to justify the revision of an approved budget. The whole basis of the recent amendments to the CPR is the emphasis on the need for parties to comply with the CPR, and the court orders made under it. It will, I think, no longer be possible in the ordinary case for parties to avoid the consequences of their own mistakes simply by saying that the other side has not suffered any prejudice as a result."
(Murray and another v Neil Dowlman Architecture Ltd  EWHC 872 (TCC), at paragraph 19.)
It follows that had the claimant not been able to rely on a technical argument about the wording of the relevant (unused) form, it might well have found itself in a perilous position.
The key Jackson amendments to the CPR have only been in force for a little over two months. That there are already a number of decisions in which the High Court is taking a much firmer line on compliance with the CPR than was seen before those amendments suggests that there may be something of a sea change underway. While all the above decisions are first instance decisions, appellate guidance is anticipated soon on costs budgeting provisions: in Troy Foods Ltd v Manton  EWCA Civ 615 permission to appeal a costs budgeting decision was granted on 18 April 2013. The case has subsequently settled but it seems clear from the permission decision that the Court of Appeal will want to give detailed guidance on costs budgeting decisions promptly. That guidance will be given by a court including one of the Lord Justices newly designated to hear all Jackson appeals, who include Jackson LJ himself.
Pending guidance in such appeals, the key consequences of the change in approach seem to be that:
- Excusing non-compliance on the grounds that an opponent has suffered no prejudice may well prove more problematic than in the past.
- Consequently, procedural applications that used to be seen as routine are now, at least before some courts, becoming anything but straightforward.
- At least some courts are proving less tolerant of what they see as "slack" lawyering than in the past.
- Costs budgeting provisions are catching out a number of parties.
Practical learning points
The current climate is clearly a challenging one for litigators, and prompts a need to revisit many working assumptions formed by reference to the very useful yardstick of which procedural arguments have and have not found favour with courts. As many of the judges who make up those courts are being retrained to deal with Jackson issues, there is a real degree of unpredictability as to how court practices will change. In these circumstances, the following practical suggestions (for some of which I must thank colleagues in Chambers) can be made:
- Ensure that practitioner literature is up to date and that the correct versions of the CPR are being used at all times. Beware on-line commentary referable to the old rules.
- If transitional provision issues arise, these must be carefully researched. It is best to assume that the new rules do apply unless it is discovered that they do not: this ensures that any surprise should only be positive.
- In Fons, the judge made it clear that the claimant should have informed the court of the problem with witness statements rather than simply waiting for the defendant to rectify matters. Practically speaking, many courts will not read such letters until the eve of a hearing, but a paper trail now seems more desirable in and of itself than it did previously. Very brief letters updating the court may now become routine.
Costs budgets are of vital importance. Key learning points from the pilots undertaken in the TCC and the Mercantile Courts include:
- ensuring that the budgets are prepared or approved by senior solicitors;
- the importance of identifying contingencies in the budget, giving flexibility if the budgets need to be revised later on;
- allowing extra time at CMCs to have discussions about costs (many CMCs are now routinely being listed for one hour rather than 30 minutes); and
- the importance of liaising with counsel and their clerks at the earliest opportunity about counsel’s estimated fees for the budget and (particularly in specialist fields) their previous experience of costs incurred in similar cases.
Finally, one topic on which it is unfortunately impossible at present to give clear guidance concerns the circumstances in which courts will (or will not) depart from the approved budget. In this context there are three key points to consider:
- First, Murray and another v Neil Dowlman Architecture Ltd suggests that the hurdle to jump will be a high one.
- Second, under the revised CPR 3.18, there is a new reference to the need for regard to "each phase of the proceedings". So when reassessment is being considered, the court should look at how each phase of the budget has developed and not perhaps primarily at the overall budget.
- Third, CPR 3.18 does not provide guidance as to what constitutes a good reason to depart from the budget. The main guidance on this issue still derives from Henry v News Group Newspapers Ltd  EWCA Civ 19 (see Article, What is a good reason for departing from a mandatory costs budget? A practical view from the Bar (www.practicallaw.com/4-523-9749)). Clarification of this issue by the Court of Appeal now that Jackson has come into force is eagerly awaited.