This is a welcome determination following a number of cases in line with the decision in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537 where a more draconian approach had been taken.  It is also particularly interesting as Lord Justice Jackson has provided judicial comment on the application of his reforms.

Background

The claimants were the paying parties in detailed assessment proceedings, having lost a defamation claim in May 2012.

The defendant delayed in providing her bill of costs and eventually served it eight months late. The bill was 66 pages long and was for significantly more than previously indicated.

Six days before expiry of the deadline for service of points of dispute on the bill, the claimants required a 21-day extension. The defendant refused.  On the day the deadline was due to expire, the claimants filed an application for an extension of time (including paying the requisite fee).  A copy of the application was sent to the defendant by email the same day and a hard copy was put in the post.

The claimants' application was stamped by the Supreme Court Costs Office (SCCO) the following day, ie after the deadline had passed.  On the same day the defendant's solicitors sent a letter to the SCCO requesting a default costs certificate.  This request was ineffective as the accompanying cheques were not signed.

The costs judge decided to deal with the matter without a hearing and granted the claimants' application.  The defendant applied to set aside the order and for a default costs certificate, asserting that the costs judge had impermissibly granted the claimants relief from sanctions.  The costs judge dismissed this application.

The defendant appealed this decision to the High Court, which found in favour of the defendant. On appeal by the claimants to the Court of Appeal judgment was given by Lord Justice Jackson.

The Decision

The Court of Appeal had to deal with two issues.  Firstly, was the High Court wrong to characterise the claimants' application for an extension of time as an application for relief from sanctions?  Secondly, was the High Court able to interfere with case management decisions made by the costs judge?

The Court confirmed that the claimants' application to the SCCO was made in time, as it was filed before the expiry of the time allowed for filing points of dispute.  The fact the SCCO did not date stamp the application until the following day was immaterial (rule 23.5).

The Court clarified that an application for an extension of time is not an application for relief from sanctions, providing the application is filed in-time.  As such, the costs judge was dealing with an application for an extension of time which had been made in time.  As such, the criteria set out in Mitchell were not applicable.

Lord Justice Jackson described the decision of the costs judge as being "extremely sensible and costs-efficient".  The High Court had erred in reversing the costs judge's decision and as such he allowed the claimants' appeal.

As the claimants had been successful on this point the Court of Appeal did not need to consider whether the High Court was correct in ordering a default costs certificate.  However, had the Court had to decide it would have found for the claimants on the basis that the High Court did not have power to order this as the request had not been made within the requisite time frame.

Lord Justice Jackson took the opportunity to provide some additional guidance on his recent civil justice reforms report.  He confirmed that it remains his firm view that the courts should be less tolerant of unjustified delays and breaches of orders.  However, it was not part of his recommendations that parties should not be able to agree reasonable extensions of time.  He considered that "legal representatives are not in breach of any duty to their client when they agree to a reasonable extension of time which neither imperils future hearing dates nor otherwise disrupts the conduct of the litigation.  On the contrary, by avoiding the need for a contested application they are furthering the overriding objective and also saving costs for the benefit of their own client”.

Further, Lord Justice Jackson said that the new rule 1.1(2)(f) (an amendment to the overriding objective requiring the courts to enforce compliance with rules, practice directions and orders) does not require courts to refuse reasonable applications for extensions of time.

Comment

This is a welcome decision in an area where practitioners have felt the decisions following Mitchell were unduly onerous on litigants.  Requesting extensions of time close to a deadline has always been a useful last resort in difficult cases, and some of the post-Mitchell­ authorities have resulted in costly hearings which would previously have been unnecessary, and draconian results.

Parliament passed legislation earlier this month allowing the parties to extend the period for carrying out any step by 28 days.  Such an agreement must be written and cannot be retrospective.  This amendment to the Civil Procedure Rules will come into force from 5 June 2014.

The combination of this decision and the changes to the rules will provide parties to litigation with more security that sensible and reasonable extensions of time can be agreed without the need for the additional costs of court applications.