The Court of Appeal has handed down its decision in Mitchell v News Group [2013] resolving recent uncertainty about the implementation of Jackson reforms – at least for the time being.

The background

Mr Mitchell sued the defendant newspaper, the Sun, for libel following the “plebgate” affair. On 5 June 2013 both parties were ordered to serve costs budgets seven days before a case management hearing listed for 18 June. Mr Mitchell’s solicitors received the order on Thursday 6 June so they had until Tuesday 11 June – four working days – to complete, file and serve their costs budget.

They failed to do so and only served it the day before the hearing on 17 June after prompting by the master, Master McCloud. At the hearing, the master limited Mr Mitchell’s solicitors’ future costs of the claim to their court fees. They applied for relief from sanctions under CPR 3.9 at a further hearing on 25 July. The master adjourned a hearing in an asbestos related claim to hear it. She refused relief because the post-Jackson rules implemented a “tougher, more robust approach to rule compliance”.

The procedural framework

The new CPR 3.9 introduced as part of the Jackson reforms permits the court to grant relief from sanctions having considered “all the circumstances of the case” and, specifically, the need:

  • For litigation to be conducted “efficiently and at proportionate cost”; and
  • To “enforce compliance with rules, practice directions and orders”

This took effect from 1 April 2013 and replaced a previous version which set out nine non-exhaustive factors that the court needed to take into account. The old factors included the administration of justice and, broadly, the behaviour of the defaulter and the impact of the default on the other parties.

The Court of Appeal’s decision

The Court of Appeal adopted a rigorously Jacksonian approach to the issue. A constant theme running through the judgment of the Master of the Rolls, Lord Dyson, is that failure to observe rules and orders has become too common, has led to delay and increased costs and is to be stamped out. The focus of applications for relief is no longer directed to doing justice between the parties before the court but to doing justice “in the majority of cases” – which includes allowing court time and resources for other litigants to have “a fair crack of the whip” (the phrase used by the master). Significance was attached to the master’s need to adjourn the asbestos related claims to hear Mr Mitchell’s application for relief.

The Court’s silence on some issues is also significant: nothing at all was said about the possible impact on Mr Mitchell of depriving his solicitors of their costs.

However, the kernel of the decision is simple: relief from sanctions will only be granted if the applicant can establish that:

  • The default is trivial
  • There is some “good reason” that relief should be granted

Some illustrations of “good reason” were provided such as illness or accident but “merely overlooking a deadline” or resourcing problems (which were emphasised by Mr Mitchell’s solicitors) will be inadequate.

Practical considerations

Some clear practical considerations emerge from the decision:

  • It is not sensible to wait until the court fixes a date for the CMC to start work on a costs budget – preparation on Mr Mitchell’s budget should have started long before 6 June.
  • The parties should co-operate in the preparation of their budgets – a criticism of Mr Mitchell’s solicitors was that they effectively prevented any such co-operation.
  • Although not a feature of this case, it would be unwise to hamper that co-operation by, for example, refusing to answer correspondence and requests for information. 
  • If disaster strikes, an application for relief should be launched without delay addressing the two questions above: whether the default is trivial or, if not, why there is a good reason relief should be granted.
  • For the reasons also given above, a good reason is unlikely to be the prejudice to the defaulter or the opposing party. The application will have to address the costs impact of the default and its impact on other court users. Also, the court is unlikely to grant partial relief: the new regime is “stark and simple”.

Some of the recent case law (Wyche v Careforce [2013] in particular) needs to be approached with caution. The old nine criteria for the grant of relief are not wholly irrelevant but the two new criteria are much more significant.

The decision marks a new regime in English litigation in which procedure remains the handmaid of justice but the balance of power between them is altered and “justice” has been redefined.