You have been warned - comply or else!

On 27 November 2013 the Court of Appeal handed down its eagerly awaited judgment in Mitchell v News Group Newspapers [2013] EWCA Civ 1526.

Much has been said about Andrew Mitchell MP and the Plebgate affair.  The Sun newspaper reported the incident and Mr Mitchell sued them for defamation. 

In the course of those proceedings the parties were required to file costs budgets in accordance with the Defamation Proceedings Costs Management Scheme.  The Defendant's solicitors filed their costs budget in time, but the Claimant's solicitors did not, though it was filed on the afternoon of the day before the hearing.

On 18 June 2013 Master McCloud concluded that the Claimant was in breach of the CPR and there was no adequate excuse for the breach.  She ordered that the Claimant was treated as having filed a budget comprising only the applicable Court fees.  She listed a hearing for the Claimant to apply for relief from sanctions under the new CPR rule 3.9.  This replaced a long list of factors to be considered and now a Court is simply required to:

"…consider all the circumstances of the case to enable it to deal justly with the application, including the need –

(a) for litigation to be conducted efficiently and at proportionate cost; and

(b) to enforce compliance with rules, practice directions and orders."

On 25 July 2013, having considered the relevant circumstances, she concluded there was no good reason to grant relief.  The stricter approach under the Jackson reforms was central to her judgment.

Mr Mitchell appealed against both Orders.  This was considered to be so important as regards the approach to the Jackson reforms implemented on 1 April 2013 that the leapfrog process was used and the appeal was heard by the Court of Appeal on 7 November 2013.    In giving the leading judgment the Master of the Rolls had no difficulty in dismissing the appeal against the Order restricting Mr Mitchell's costs budget to Court fees.  The Claimant's solicitors filed the budget late (albeit before the hearing), having been given sufficient prior warning, and they would have the opportunity to seek relief under CPR 3.9 at another hearing, when they could make further submissions.

Not surprisingly, the Master of the Rolls spends most of his judgment reviewing the genesis of the new CPR rule 3.9 and whether the Court is now required to adopt a stricter approach.   Due and proper regard is to be had to the overriding objective.  The Master of the Rolls (with whom the other Lord Justices agreed) said that in managing the Court is to have regard to all court users and not just the parties before it.

The Court of Appeal gave guidance to the approach to CPR rule 3.9.  If the non-compliance cannot be characterised as trivial, then the burden is on the defaulting party to persuade the Court to grant relief.  If there is good reason for the default occurring, the Court will be likely to decide that relief should be granted.  Solicitors under pressure of work is not a good reason. Compliance with the CPR and Court Orders is essential if litigation is to be conducted efficiently.  Good reasons are likely to arise from circumstances outside the control of the defaulting party.  From now on the Court of Appeal considers that relief from sanctions should be granted more sparingly than previously.

In dismissing the appeal against Master McCloud's refusal to grant Mr Mitchell relief from sanctions the Court of Appeal said that "she was… 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. They resulted in an abortive costs budgeting hearing and an adjournment which had serious consequences for other litigants. 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."

The Court of Appeal "hope that our decision will send out a clear message." Are you ready to listen?

Mitchell v News Group Newspapers [2013] EWCA Civ 1526