pnBlawg

the professional negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

The "new approach" to applications for extensions of time to appeal

A recent judgment of the Court of Appeal has extended the spectre of the robustness of the 'Jackson Reforms' yet further. Although the approach courts now take is somewhat softer following the Court of Appeal's judgment in Denton, there is no doubting that the earlier decision in Mitchell has changed the landscape of litigation, at least in cases where concession or relief is sought and where default is a factor.   Much like the aforementioned cases, known by the name of the most easily-remembered party, the conjoined appeals of Regina (Hysai) v Secretary of State for the Home Department / Fatollohipour v Alibadibenisi / May v Robinson (2015) The Times Law Reports 22/1/15, are likely to be most easily referred to (for obvious reasons) by the names of the parties to the final appeal.   Here, Moore-Bick LJ giving the concurred-with judgment of the court (Tomlinson LJ and King J), held that retrospective applications for extensions of time for filing a notice of appeal should be treated in the same way as an application for relief from sanctions and that the court should take a similarly rigorous approach to the same. This notwithstanding, the Court was particularly at pains to point out that such a robust approach should not encourage parties to act unreasonably and refusing to cooperate in the hope that this will provide  a litigation advantage. The court proffered the following guidance relevant to appeals in civil cases:     shortage of funds was not a good reason for a delay;   the fact a person was a litigant in person was of no significance when the court assessed the seriousness and significance of a failure to comply with rules and directions of the court. The more important question was whether it amounted to a good reason for the failure which occurred. This will depend on the specific facts of a case, however the mere fact of being a litigant in person did not afford good reason for default; and   the court should usually decline to hear argument as to the underlying merits of the appeal, other than in cases where the merits were patently either very strong or very weak, as to do so routinely would unreasonably use up unnecessary court time and drive up costs.

Mitchell re-visited:Court of Appeal hears three linked relief from sanctions appeals

On 16 and 17 June 2014 the Court of Appeal took the unusual decision to hear three appeals together which concerned relief from sanctions and the application of Mitchell principles. One of the appeals was from the decision in Utilise TDS Ltd v Davies [2014] EWHC 834 (Ch). Both the Law Society and Bar Council intervened arguing that the approach of the Court of Appeal in Mitchell had ‘spawned a new style of litigation’ where instead of actively working together to bring a case to trial, parties are focused on ‘catching each other out’. Appearing for the Bar Council, Mark Friston said the Bar has concerns about the way Mitchell is being applied. It has a ‘corrosive effect on cooperative conduct’ and has 'taken the civility out of civil litigation'. The Law Society argued that the test in Mitchell had been too narrowly drawn and that instead of 'trivial' breaches leading to relief being granted, the test should be whether the breach was 'immaterial', meaning that it had no detrimental effect on the course of the litigation. Judgment was reserved, however to see how the arguments unfolded take a look at the video on the Law Society Gazette website at http://www.lawgazette.co.uk/law/featured-broadcast-mitchell-sanctions-damaging-to-litigation-society/5041713.article.

Relief From Sanctions - The Pendulum Swings

    Two decisions delivered shortly before Easter suggest a change in the direction of the Mitchell pendulum. Chartwell Estate Agents Ltd v Fergies Properties SA [2014] EWCA Civ 506 is a "must read" decision of the Court of Appeal. It concerns the failure to exchange witness statements. Both parties had failed to serve witness statements whilst a squabble about disclosure rumbled on. The judge found that the breach was not trivial and there was no "good reason" for the failure. But the trial date was not imperilled and the claim would be doomed if relief was not granted. Even though the Mitchell criteria were not satisfied the judge granted relief. The Court of Appeal upheld the decision, emphasising that the default of the defendants was a factor that took the case outside of the Mitchell "expectation" that relief would be refused. Kaneria v Kaneria [2014] EWHC 1165 is a decision of Nugee J. The judge held that Robert v Momentum Services Ltd [2003] EWCA Civ 299 remains good law and Mitchell does not apply to applications for extensions of time made before the expiry of the relevant deadline. Such an application still has to be judged against the post-Jackson overriding objective but the concern to enforce compliance with rules, practise directions and orders does not have a paramount status.      

Mitchell revised?

A little light relief for Friday afternoon. A decision of Males J started doing the rounds last week:  Vivek Rattan v UBS AG, London Branch [2014] EWHC 665 (Comm). It is well worth a read, not least because it is short. The case concerned misselling (or as the Claimant put in its skeleton argument “misspelling”) of investments. The Claimant took the point that the Defendant’s costs budget had been filed less than the required seven days before the relevant CMC. Applying Mitchell (which of course also involved late service of a costs budget) the Claimant contended the Defendant was only entitled to court fees. Males J described this argument as “manifest nonsense”. That might seem surprising. Is this the start of the tide turning against the harshness of the Mitchell regime? It is nothing of the kind. Reading the case itself dispels any such a notion. The Claimant’s solicitors had written to their opponents asking for confirmation that they would file their budget “on 28 February 2014”; the Defendant’s solicitors agreed that they would file it “by 28 February 2014”. They filed it on 28 February 2014. That was six, not seven, clear days before the CMC. What is the difference between this case and Mitchell? As Males J put it with heavy irony, “the unsophisticated reader might think that [the correspondence] was the clearest possible agreement that a costs budget exchanged on 28 February 2014 would be in time but [Counsel for the Claimant] submits that such a reader would have failed to grasp the true subtlety of this correspondence”. The judge rejected this submission holding: “It is clear that there was an agreement. Even if [the Claimant’s] strained construction of the correspondence had been justified, the Defendant’s solicitors understanding of the position was entirely reasonable. If relief from sanctions had been necessary, which in my judgment it was not, the case for such relief would have been overwhelming”. In this author’s view, Rattan does not signal a dilution of the Mitchell principles. Instead, it is an illustration of the difference between a genuine Mitchell point and one which is, in the words of Males J, merely “futile and time-wasting” and will be discouraged by the courts. As Leggatt J put it in Generali Romania Asigurare Reasigurare SA v Ardaf SA Insurance & Insurance Co [2014] EWHC 398 (Comm): “The decision ... in Mitchell ... has rightly been described as a “game changer” [...]. It is important for litigants to understand, however, how the rules of the game have changed and how they have not. The defendants in this case have sought to rely on Mitchell to turn to their tactical advantage a short delay by the claimants in providing security for costs which in itself had no material impact on the material impact on the efficient conduct of litigation. [...] The defendants’ stance disregarded the duty of parties and their representatives to cooperate with each other in the conduct of proceedings and the need for litigation to be conducted efficiently and at proportionate costs. It stood Mitchell on its head.”

Michael v Middleton - relief from sanctions under CPR 3.9 and solicitors negligence claims

Litigation solicitors up and down the country are no doubt assessing the implications of the latest procedural changes with an eye to their own risk management profile. Of particular importance has been the change to the provisions concerning relief from sanctions under CPR 3.9. The recent decision of Michael v Middleton [2013] EWHC 2881 (Ch) illustrates how tough the courts are becoming in implementing the Jackson reforms. It also raises the possibility of more solicitors’ negligence litigation in the future if caseloads are not managed efficiently. The case was a dispute between claimant business owners and their solicitor, the defendant. A key issue was how the defendant was to be paid, the defendant’s account being that he was to be given an interest in the claimants’ business as part of his remuneration. The claimants issued proceedings but failed to provide satisfactory disclosure and, in 2012, the claim was struck out for non-compliance with an `unless’ order. Approximately one year later (2013) the claimants instructed new solicitors but then waited for several months before finally issuing an application for relief from sanctions under CPR 3.9. It was accepted by the parties that the struck-out claim was not time-barred and that the claimants had been badly let down by their first solicitors. It was also in issue whether the second solicitors had unreasonably delayed in issuing the application for relief. HHJ David Cooke refused the claimants’ application for relief and stated that granting relief would ‘send a wrong message`. As part of his decision, he focussed on two specific aims of CPR 3.9 – conducting litigation efficiently and saving costs, and enforcing compliance with orders. Of particular relevance here, the Judge considered and rejected the submission that any claimant, who was denied relief, was bound to be disadvantaged by having to sue his solicitor instead. On the Judge’s findings, it was still open to the claimants to bring a fresh claim against the defendant, without being met either by limitation or abuse of process arguments. Nevertheless the implications of this decision are that the courts are going to adopt a less pragmatic approach to applications for relief. Instead of granting relief on the (unspoken) basis that there is little point in forcing a claimant to re-start the litigation, they are going to adopt a tough approach with potentially far-reaching consequences for any solicitor having conduct of the litigation at any stage.      

Caselaw since 1st April 2013 - leopards and spots?

  The case of Venulum Property Investments Ltd v Space Architecture Limited [2013] EWHC 1242 (TCC) concerned a relief from sanctions application under r. 3.9. The decision was in fact made under the old rules because the application was made prior to 1st April 2013 but the judge (Edwards-Stuart J) took the new regime into account concluding: “In my judgment, when the circumstances are considered as a whole, particularly in the light of the stricter approach that must now be taken by the courts towards those who fail to comply with rules following the new changes to the CPR, this is a case where the court should refuse permission to extend time. The Claimant has taken quite long enough to bring these proceedings and enough is now enough. I therefore refuse this application”. The claimant’s application was for an extension of time for serving the Particulars of Claim. The Claim Form had been issued on 12th November 2012 but served on the very last day for service (12th March 2013). The Particulars of Claim were wrongly served 14 days later – the Claimant’s solicitors forgetting that the long stop deadline for service is four months after the issue of the Claim Form. In the judgment there was a predictable citation in the judgment from Fred Perry v Brands Plaza Trading [2012] EWCA Civ 224 (Lewison LJ): “… courts at all levels have become too tolerant of delays and non-compliance with orders. In so doing they have lost sight of the damage which the culture of delay and non-compliance is inflicting on the civil justice system. The balance therefore needs to be redressed.” There were also predictable citations from Hashtroodi v Hancock [2004] 1 W.L.R. 3206 on courting disaster by leaving issue until expiry of the limitation period and failure to serve (due to incompetence on the part of solicitors) being a powerful reason not to grant and extension of time. The judge looked at all the circumstances and refused relief due to the weakness of the Claimant’s case, poor pleading and a lengthy and unexplained delay of 5 years before instructing solicitors. The tough new regime undoubtedly helped the defendant but one is left with a doubt as to whether the outcome would have been any different pre Jackson. (Image courtesy of freefoto.com - Photographer: Kristin de Moore)

Re-visiting Pilkington v Wood [1953] Ch 770 in light of qualified one-way costs shifting

It is still far too early to know precisely what effect the Jackson reforms relating to costs in personal injury cases will have on professional negligence claims. Given the extent of the changes they are undoubtedly going to spawn a number of claims against solicitors for not using the rules to best advantage. But I would like to raise a different point, which is the extent to which qualified one-way costs shifting in personal injuries cases impacts on mitigation. This would arise, for example, where a claimant has missed the primary limitation period because of his solicitor’s negligence and sues the solicitor. The solicitor may well raise an argument that the Claimant should first mitigate his loss by suing the underlying tortfeasor, relying on Section 33 of the Limitation Act. How may qualified one-way cost shifting alter this? Well, under the new regime if the Claimant sues the underlying tortfeasor he will be protected by qualified one-way costs shifting. This means that if the claim does not succeed he would not (in ordinary circumstances) have to pay the other side’s costs. The Claimant would no longer require ATE insurance to protect himself against adverse costs – and of course in the past getting ATE has been a barrier to some claimants bringing claims after the primary limitation period. This could well alter the reasonableness or otherwise of embarking on such litigation, particularly with an indemnity from the solicitor. What will the courts make of an argument along these lines? Watch this space.