Counting the costs of Mitchell

The amendments to civil litigation procedure arising from the reports of Lord Justice Jackson came into force on 1 April 2013. And the first important decision on their impact in the context of sanctions was delivered on 7 November by the Court of Appeal, led by master of the rolls Dyson, in Mitchell v News Group Newspapers [2013] EWCA Civ 1526. In a recent issue of the Gazette, one correspondent suggested that if the decision stood, his firm might cease to practise in this area, reading the judgment as deciding that nothing short of procedural perfection will now do.  

The object of this article is to consider whether that is really the standard now demanded and how the Jackson reforms relating to sanctions are likely to bed down in county courts near you. The views expressed are, of course, those of the author alone.

When the judges received their one day of training pre-implementation, it was made plain by the MR that the Court of Appeal would ‘support’ robust decisions by first instance judges dealing with procedural failures by litigants and their solicitors. There was much talk from Jackson LJ himself and from the MR of the need to deal with the perceived lassitude on the part of the judiciary in deciding such issues before the reforms. Seen in that light, the Mitchell decision is hardly surprising.

While it is apparent that the reforms are intended to implement a change of emphasis, to implant a ‘new’ philosophy intolerant of procedural default, it is interesting to consider how that has been achieved. The first port of call must be the amended overriding objective: enforcing compliance with rules, practice directions and orders is now a specific element of dealing with a case justly. What is really new here? Could it seriously be said that judges did not take such failures into account in deciding how to apply the overriding objective before 1 April 2013? The new sub-paragraph is one of six, none of which has any ascendancy over the others, in a non-exhaustive menu. The weight to be attributed to procedural failures in arriving at any decision where the overriding objective is in issue remains a matter for the discretion of the judge on the facts of the case before him.

To that extent, there can be no precedent tying the judge’s hands. It might be thought that the Mitchell case is neither more nor less than an unfortunate collection of circumstances permitting the appeal court to express its collective acceptance of the new philosophy, and its support of the trial judge, in a justifiable decision to refuse relief from sanctions.

That takes us on to the amended Civil Procedure Rule 3.9. This simplified and much shorter rule nevertheless requires the court to consider ‘all the circumstances of the case’, with specific reference to efficiency (presumably in matters relating other than to costs), proportionality of costs and the need to enforce procedural compliance. The three stated ‘needs’ are included within those circumstances ‘so as to enable (the court) to deal justly with the application’. In Mitchell, the Court of Appeal confirmed, as is surely correct, that those circumstances include also the factors set out expressly in the previous incarnation of the rule (paragraph 49), though it may be hoped that judgments under the new rule will be less hidebound, no longer needing to tick each prescribed box.

Again, what is new here? In the specific context of relief from sanctions, it could hardly be said that a litigant’s procedural default was ignored under the old rule. Textually, the ‘needs’ have no additional weight above and beyond all the other circumstances, and the rule reflects the overriding objective in requiring that the application is dealt with justly.

Turning to the decision itself, a starting point might be to consider whether the first instance judge would have been appealed, or successfully appealed, had she dealt with the claimant’s application by ‘unless’ and wasted costs orders. Surely not. No, the question for the Court of Appeal was whether by imposing the ultimate sanction in the context of the particular application, she had strayed beyond the parameters of reasonable judicial disagreement and had, therefore, failed to exercise her discretion ‘judicially’.

It is clear from the tenor of the report that the decision to uphold the judge was not taken lightly. See the way Dyson MR expresses himself in paragraphs 37 and 40-43. It is also a factor of considerable importance that the claimant’s solicitors’ default in compliance resulted in an abortive hearing on 18 June, and the consequential need to hear the application for relief from sanctions urgently, resulted in the delisting of another case with consequential delay and inconvenience for those parties.

As a result, CPR 1.1(2)(e) was brought directly into play. Note the references to this in paragraphs 12, 30, 32 and 39 of the judgment. If these delays contributed to the burden on the camel’s back, so too did the failures on the part of the claimant’s solicitors to enter into budgeting discussions with the defendant as required (whether timeously or at all) and the inconsistent explanations they provided for their default (paragraphs 5 and 7). The claimant’s solicitors perceived management failures in dealing with the workload of the departed fee-earner added to the chapter of disasters.

In making general comments on CPR 3.9, the court stated at paragraph 36 that the ‘needs’ referred to above should be regarded as of ‘paramount’ importance and given great weight by reason of the fact that they are expressly stated. Whether this guidance is part of the ratio of the case is unclear: it is undoubtedly a statement of the new philosophy but it is respectfully suggested that that is as far as it goes.

Nothing in the text of the rules underpins this emphasis and it would have been, and is, easy for the rule-makers to make specific what the court’s judgment says is implicit. In paragraph 35 the court refers to, and implicitly accepts, Jackson LJ’s rejection of the ‘extreme course’ of making relief from sanctions available only in ‘exceptional circumstances’. It can be assumed that the court did not think it was doing just that in this judgment.

For all of the reasons referred to above, and in the judgments at first instance and on appeal, it was very difficult for the claimant’s counsel to make submissions beyond technical arguments as to the applicability of the procedural provisions relied on by the first instance judge and saying ‘it is not fair’ in a variety of ways.

Is the Mitchell decision really so draconian as to drive practitioners to abandon civil litigation work? We are fortunate in our jurisdiction to be subject to the rule of law and not that of opinion, whim, prejudice, diktat or dogma.

The Mitchell decision is supportive of robust exercise of discretion by the first instance judge. It does not mean that such discretion will work backwards from the ‘nuclear option’ in any given case. It does mean that where the first instance judge considers that enough is enough and that a case should proceed no further in court, it will be rather more difficult than it may have been hitherto to obtain a more lenient decision from either a circuit judge or the appeal court, so long as the decision made at first instance is a proper exercise of judicial discretion in the light of the rules and the facts of each case as found by that judge. ‘Get out of jail free’ appeals will be exceptional.

Practitioners should therefore approach the amendments to the overriding objective and CPR 3.9 in a pragmatic manner and make applications for extensions of time at the earliest opportunity. They will not be expected to be perfect by their local judges, but they will be expected to have done everything they can reasonably be expected to have done to comply with rules, practice directions and orders.