Dyson: Mitchell guidance has been ‘misunderstood and misapplied’

Master of the rolls Lord Dyson today issued new guidance for dealing with non-compliance as he attempted to bring clarity to courts across the country.

Dyson upheld all three appeals in cases relating to the granting of relief from sanctions under the new CPR 3.9. The appeals were grouped together deliberately to address uncertainty about new civil procedure rules.

Those expecting a complete departure from last year’s landmark Mitchell guidance – also provided by Dyson – will be disappointed. Denton & Ors v TH White, an appeal against relief from sanctions being granted for a party that served six witness statements late, was allowed.

But the two other cases had seen arguments for a more lenient approach: Decadent Vapours Ltd v Bevan & Ors, where a case had been struck out for late payment of fees and Utilities TDS Ltd v Davies, where the court had to decide if two trivial breaches aggregate so as to become one significant breach.

Again Dyson, sitting alongside Lord Justice Jackson, agreed to these appeals. Dyson said that the guidance in Mitchell has been ‘misunderstood and is being misapplied by some courts’, although he maintained it had been ‘substantially sound’. He concluded: ‘It is clear that the guidance in Mitchell needs to be clarified and further explained.   

‘It seems that some judges have ignored the fact that it is necessary in every case to consider all the circumstances of the case. This may be the reason for the decisions in Decadent and Utilise. 

‘But other judges have adopted what might be said to be the traditional approach of giving pre-eminence to the need to decide the claim on the merits.‘That approach should have disappeared following the Woolf reforms. There is certainly no room for it in the post-Jackson era. It seems, however, that this approach must have been applied in Denton.’

Dyson insisted the guidance in Mitchell, where the claimant’s non-compliance caused ‘substantial extra work and extra costs to be incurred by the defendant’ could not necessarily be applied in all relief from sanction decisions.

The master of the rolls said at the first stage, the court should concentrate on an assessment of the ‘seriousness and significance’ of the very breach in respect of which relief from sanctions is sought.

At the second stage, he said the court should consider why the failure occurred and thirdly the circumstances of the case itself.

Dyson added: ‘The important misunderstanding that has occurred is that, if (i) there is a non-trivial (now serious or significant) breach and (ii) there is no good reason for the breach, the application for relief from sanctions will automatically fail. That is not so and is not what the court said in Mitchell.’

He added that today’s judgments should help reduce the need for satellite litigation and will be conducive to a ‘reasonably consistent judicial approach’ to the application of CPR 3.9.

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