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Jackson bites: 'Mitchell' and the new culture of compliance

The Jackson bandwagon continues to run and there remains strong judicial support for the package of measures brought in last year. Simon Denyer and John Palmer remind us of the Court of Appeal's recent guidance on the treatment of default under the new Jackson costs regime in Mitchell v News Group Newspapers Limited [2013] (and subsequent cases) and highlight the practical implications for local authorities.

Mitchell: the facts

In November 2013, the Court of Appeal handed down judgment in the significant procedural decision, Mitchell v News Group Newspapers Limited [2013]. This was a case about relief from sanctions involving costs budgeting and arose in the context of the pilot scheme in defamation cases but was of wide ranging importance as the court used its judgment to deal with how default generally should be dealt with. The claimant filed its costs budget late and the costs judge decided that the appropriate sanction was to allow the claimant to recover only court fees, the fairly drastic sanction provided for in the rules for default on this point. There was an immediate application under the new CPR 3.9 for relief which was rejected, followed by the claimant's appeal.

Mitchell: Court of Appeal judgment

The court predictably rejected the appeal, upholding the order that as the claimant's solicitors were late in filing their costs budget (a non-trivial beach for which there was no good reason), the costs that they could recover on behalf of their client if the case succeeded should be limited to the court fees payable; the costs budget served was over £500,000.

CPR Part 3.9: applications for relief from sanctions

Part 3.9 is key here as it sets out the basis under which applications for relief from sanctions are dealt with. In Mitchell, the Court of Appeal reaffirmed the importance of the new two key factors to a relief application which have been added to the rule, that is to ensure "litigation is conducted efficiently and at proportionate cost", and "to enforce compliance with rules, practice directions and orders". Doing justice in the case is now effectively redefined and no longer means allowing cases to proceed with merely a sanction in costs for default, but instead involves seeing justice as compliance with the CPR and court orders.

Guidance offered

The Court of Appeal gave the following guidance:

  • The starting point is that any sanction is properly imposed.

  • "Trivial" breaches will usually get relief, such as narrowly missing a deadline.

  • Non-trivial breaches will require a "good reason" to get relief, such as the delay being caused unavoidably by illness, accident or an unexpected development.

  • Administrative issues within the lawyer's office (as in Mitchell) are unlikely to be a good reason.

  • Relief applications need to be made promptly.

The problem of default

Most defaults within litigation are not in fact set against the background of costs budgeting with its specific default provision at rule 3.14, but can be of many different types, such as failing to serve proceedings in time, being late with disclosure of documents, witness statements or expert evidence, omitting to start detailed assessment proceedings in time. Sanctions in default are in any event provided by the CPR in relation to certain directions including but not limited to failure to serve witness statements – 32.10; failure to serve expert evidence – 35.13 and failure to file costs budgets – 3.14.

Many of these examples are ones where either party can be in default, but in fact the majority of non-compliance tends to be on the part of claimants as more frequently the burden is on them to take a specific step by a certain date, coupled with the fact that the potential sanction such as dismissal of the claim tends to be more significant to claimants. The robust decision we now have from the Court of Appeal is therefore primarily a threat to claimants, or at least those who do not operate an efficient operation. They must be able to pick up important dates, diarise them, and ensure compliance, and if the worst happens and there is going to be delay, know how to proceed, quickly and decisively.

However, there will still be a challenge for local authorities and their lawyers to ensure that their houses are in order and that compliance happens on their side. There is now no future in tactical non-compliance with a timetable to allow other steps such as surveillance to be undertaken; instead tactics will need to be formulated around court directions to ensure compliance happens. If a local authority's position is protected in this way, then it will be in the best possible position procedurally, in the event of default by opponents.

Post Mitchell judicial support

Mitchell has been strongly affirmed in the Court of Appeal in both Theverajah v Riordan [2014] in which default expressly precluded the claimant from even raising certain arguments at trial and Durrant v Avon & Somerset Police [2013], in which a trivial breach was not forgiven as no prompt application had been made for relief, nearly two months having elapsed. Last week's Court of Appeal decision in Chartwell v Fergies [2014] upholding a first instance decision to grant relief from sanctions has brought some balance to the debate and has demonstrated that a more measured approach is now required from all courts. However this should not detract from the overarching message of compliance.

On 21st March the Civil Justice Council hosted the most significant debate yet on where we now stand on implementation of the Jackson/LASPO changes 12 months on. We attended alongside stakeholders from all interested bodies, as well as the judiciary, and it included presentations from both Lord Justice Jackson himself and the Master of the Rolls Lord Dyson. On the strict approach to compliance with orders as seen in the Mitchell case, the conference was told that the new approach, as expected, is here to stay. Lord Dyson said he was "fairly unrepentant" about the decision, but accepted that more decisions were needed from the Court of Appeal to deal with further points arising out of cases, and that it would take another 12 months for the new approach to compliance to bed down.

What does all this mean for Local Authorities in practice?

  • The bottom line is that Orders must be complied with.

  • Similarly, make sure procedures are in place to ensure that proceedings, when served, are actioned with alacrity.

  • Do not allow claimants to obtain judgment in default – it may well be more difficult than ever to get this set aside. Make sure claims are investigated fully as soon as proceedings are issued – do not wait until directions are received from the court – this should not be your starting point.

  • When directions are provided by the court make sure that your lawyers send you a copy of the order made and that you/they tell all relevant witnesses what they are required to do and when. Remember, the issue of the Order should not be the start of your enquiries, search for documents etc. The key is to get the work done early.

  • If there are any problems with for example, sickness/holidays, tell your lawyers as soon as possible in order that any applications necessary can be made in good time. A court will not be interested if you have left it to a week before witness statements are due to find out that a witness is on his annual three week trip to the Bahamas!

  • Work closely with your lawyers and all witnesses, deal with enquiries in a timely manner and maintain good communication with all relevant witnesses to ensure that you are in a position to comply with the court timetable.


For further information, please contact Simon Denyer, Strategic Legal Development Partner, on 0161 604 1551.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.