Aside from that, “Mitchell” hit the headlines in November 2013, when the Court of Appeal refused to allow Andrew Mitchell MP’s appeal against an order by a Master allowing him court fees only at best – even if he won his defamation case against the Sun Newspaper at trial.
This was because his solicitors had failed to file and serve a costs “budget” not less than seven days before a case management hearing: they did so the day before the hearing, and the Defendant, Mirror Group Newspapers, complained that they had not had enough time to consider it.
Mitchell’s budgeted costs for the case were over £500,000. The case hit a particular nerve with litigation lawyers because it was the first big decision (and a very scary one at that), following the 2013 introduction of the “Jackson reforms”. These included the need for the parties to file costs budgets early in litigation and for the court to approve those budgets.
The Court of Appeal said, “the traditional approach of our civil courts on the whole was to excuse non-compliance if any prejudice caused to the other party could be remedied (usually by an appropriate order for costs). The Woolf reforms [introduced in 2009] attempted to encourage the courts to adopt a less indulgent approach. In his Review of Civil Litigation Costs, Sir Rupert [Jackson] concluded that a still tougher and less forgiving approach was required.”
The Court of Appeal’s judgment was about as tough and unforgiving as Sir Rupert Jackson could have hoped for. Its presiding Judge, Lord Dyson, said: “We acknowledge that it was a robust decision. She [the Master] was, however, right to focus on the essential elements of the post-Jackson regime. The defaults by the claimant’s solicitors were not minor or trivial and there was no good excuse for them. …. Although it seems harsh in the individual case of Mr Mitchell’s claim, if we were to overturn the decision to refuse relief, it is inevitable that the attempt to achieve a change in culture would receive a major setback. In the result, we hope that our decision will send out a clear message. If it does, we are confident that, in time, legal representatives will become more efficient and will routinely comply with rules, practice directions and orders. If this happens, then we would expect that satellite litigation of this kind, which is so expensive and damaging to the civil justice system, will become a thing of the past.”
The “clear message” that went out to lawyers, at least in the front line of litigation, was that anything other than trivial breaches would be liable to be punished, possibly severely so. The net result was a fairly swift and unattractive throwback to what were, in fact, the relatively bad old days, pre-Woolf, when there was a tendency to little cooperation and give-and-take between opposing lawyers in litigation. Mitchell was speedily followed by a swathe of satellite litigation which Lord Dyson had said would be a thing of the past and, worse still, many of the decisions were conflicting or not easily reconcilable, which tended to suggest that Lord Dyson’s own judges were either not understanding or not following his “clear message”.
A clearer message was desperately needed. Along came Lord Dyson again with another judgment of the Court of Appeal on 4 July 2014 in the case of Denton.
Lord Dyson said that his message in Mitchell had been “misunderstood” and was being “misapplied in some courts”. The proper approach was a three-stage test.
Stage 1: Identify and assess the seriousness or significance of the breach in question. If the breach is not serious or significant, relief from sanctions can be granted, and spending much time on the second or third stages will usually be unnecessary.
Stage 2: Consider why the default occurred. Mitchell had given some examples of what might be good and bad reasons: a solicitor’s debilitating illness or accident might be a good reason; mere overlooking of a deadline would be unlikely to be a good reason.
Stage 3: The court must consider all the circumstances of the case. The fact that a breach is serious or significant and there is no good reason for it does NOT mean that an application for relief from sanctions WILL automatically fail.
Where Does This Leave Us?
It is still not entirely clear when a breach is significant or serious. Nor might it be easy to predict what the court would consider a good reason. Stage 3 is perhaps the most nebulous of all.
Whilst the hope is that Denton will pull us back to the future and away from the bad old days pre-Woolf, the basic message is still clear that court rules and deadlines must be complied with.
There will inevitably still be a greater temptation than there was before Mitchell for lawyers, in some cases, to resist applications by their opponents for relief from sanctions.
This all reinforces the universally acknowledged truth that the stages in litigation must be carefully planned and timetabled. Timetables to trial must be realistic and achievable and, once set, adhered to, barring some good reason that requires them to be varied. If such a good reason arises, the lawyer and his client must be aware of it at the earliest opportunity so that, if necessary, an extension of time can be agreed with the other party or, failing that, sanctioned by the Court.
We are hoping that all this talk about Mitchell will become outdated. It gets in the way of what litigation should really be about, being the quickest and most cost-effective route to a satisfactory resolution of the dispute for our clients.
Speak to Alex Deal today to find out more.
Note: This article is not legal advice; it provides information of general interest about current legal issues.