Viridor Waste Management v Veolia Environmental Services [2015] EWHC 2321 (Comm)


  • Viridor failed to comply with a court order providing a deadline for the service of proceedings;
  • Veolia refused to consent to an order ‘forgiving’ Viridor and also applied to strike out the claim for being late
  • Court granted Viridor’s application and made Veolia pay costs on an indemnity basis

Background to the case

The Civil Procedure Rules (‘the CPR’) came into force on 26 April 1999 and set a more strict framework for the progress of cases and allocated responsibility to Judges to set timetables and impose sanctions if they were not complied with. However, in practice, these powers were not strictly enforced. When the Rules were being considered by Lord Jackson in the run up to the reforms in 2013, complaints were made by both The Law Society and practitioners that there needed to be more strict compliance with the Rules to ensure that cases progressed through the system. For that reason, the provisions which allowed Judges to ‘forgive’ parties for not complying with the CPR or Court Orders were redrafted and it was intended that there should be a stricter culture of compliance.

Consequently, under the new regime, when a party applied to be ‘forgiven’ (i.e. to be relieved from a sanction) for breaking a rule, the Court was required to:

‘Consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need:

  • for litigation to be conducted efficiently and at proportionate cost; and
  • to enforce compliance with the Rules, practice directions and Orders’.

This was a much stricter formulation of the previous Rule and Lord Jackson, when implementing the changes, made it clear that he expected this to lead to a change in the culture of more strict compliance.

This new approach was famously applied in Mitchell v News Group Newspapers Ltd [2013]EWCA Civ 1537. This was the case brought by Andrew Mitchell MP against The Sun newspaper, which had reported that Mr Mitchell had made certain comments to police officers at the entrance to Downing Street. As part of the Court rules, Mr Mitchell was required to file and serve a costs budget seven days prior to a Court hearing which was to determine the steps required before the matter reached trial. In fact, Mr Mitchell filed his costs budget the day before the Hearing. The Sun had already filed its costs budget in the sum of £589,000.

At the Case Management Conference, Mr Mitchell was found to be in breach of the rules and the Court ordered that his costs budget should be treated as though it only comprised of the modest Court fees. Mr Mitchell’s subsequent application for relief from sanctions pursuant toCPR 3.9 was refused. The matter then reached the Court of Appeal, which again refused Mr Mitchell’s application and stated that relief would only be granted where:

  • there were trivial breaches and where application for relief was made promptly; and
  • there were good reasons for the default generally outside the control of the party.

This strict application of the CPR led to unexpected results. Instead of making the Court more efficient, it led to a flood of cases clogging up the Courts where parties were seeking to take advantage of their opponents who had narrowly missed a deadline. Instead of focussing on the merits of cases, the parties turned to scoring points on procedural matters. The consequence was that the Court system was once again clogged up with cases.

Some of these cases once again reached the Court of Appeal and three cases were heard together. The decision is now generally referred to by reference to the first case, Denton v White [2014] EWCA Civ 906. The Court of Appeal held that the Mitchell guidelines had been misunderstood and misapplied and established a new three stage test which replaced the Mitchell guidelines. This test was as follows:

  • Identify and assess the seriousness of the non-compliance. Is the breach ‘serious or significant’?
  • If it is, why did the default occur?
  • Consider the wording of CPR 3.9 (see wording above).

Serious or significant breach

Generally, this means that if the breach was not significant or serious, relief should be granted and not much time need be spent on considering the other two questions. Some examples given were that the filing of witness statements late and causing a trial to be vacated would be significant, whereas filing a costs budget 45 minutes late was not serious or significant.

Why did the default occur?

This must still be considered by the Court whatever their conclusion on the first two questions. Here, the Court will consider factors such as how quickly the application was made and the previous conduct of the parties. However, these are simply examples and it remains open for the Court to consider any other circumstances.

Viridor Waste Management v Veolia Environmental Services [2015] EWHC 2321 (Comm)

So what happened in this case? Viridor and Veolia had a claim against each other based on the same facts and law. Viridor issued proceedings first and Veolia issued separate proceedings. However, due to other matters, the proceedings were not served and a Court Order was obtained by consent which extended the time for service of the proceedings until 14 January 2015. To give a flavour of the sums at stake, Viridor’s claim was for £27,000,000 and Veolia’s claim was for £32,000,000.

Given the time limit, Viridor decided to serve its claim. Consequently, it filed its Particulars of Claim at Court on 12 January 2015. On the same day, the solicitor with conduct of the matter arranged for the Particulars of Claim to be sent by post to Veolia’s solicitors. However, due to an administrative error, the proceedings were not posted until 13 January 2015 and were also sent by second class post which meant they were late. It was common ground between the parties that service was not effected by 14 January 2015. However, when the error was noticed, the Particulars of Claim were served by email after office hours on 15 January 2015.

Veolia refused to consent to the retrospective extension of time and Viridor applied to Court for such an extension and relief from sanctions. The Court held that the delay in serving the Particulars of Claim was not serious or significant and that the breach was not deliberate. In addition, having regard to all the circumstances of the case (including the amount of the claim), it would be inequitable to refuse relief from sanctions.

Perhaps in the light of the Denton principles, the outcome of this application was unexpected. However, what was interesting was that Veolia was held to have acted unreasonably and the Judge considered that it had ‘sought to take opportunistic and unreasonable advantage of Viridor’s mistake in the hope of obtaining a windfall strike-out when it was obvious that an extension of time was appropriate’. In the circumstances, Veolia was penalised and ordered to pay Viridor’s costs of the application on an indemnity basis.