Life after Mitchell

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Where does the landmark costs judgment leave the profession? asks Rachel Rothwell.

I would love to know what district judges up and down the country really make of the Court of Appeal’s landmark decision in Mitchell last month. The most striking element for me is the stark illustration of the fact that a judge’s top priority is no longer to do justice in the individual case.

First, consideration has to be given to justice in a ‘wider’ sense – to ensuring the overall administration of justice by properly enforcing compliance with court rules and practice directions. Even if - as in Mitchell - that leads to an individual outcome that the judges themselves acknowledge to be ‘harsh’.

The master of the rolls had already explained the principle in his 18^th Jackson implementation lecture back in March, but now we see it in action, and it really is tough.

Down on the ground, it means district judges being compelled to refuse to allow (for example) key witness or expert evidence, because it was filed too long after the deadline. That is unlikely to have been the client’s fault, but the Court of Appeal commands that judges hold a firm line, and do not bend the rules simply to achieve fairness for litigants.

So even if the judge believes that the client has a strong case, and even if they know that a strict enforcement of the rules is likely to spark further litigation in the form of a professional negligence action, they must still take a hardline approach. It certainly won’t feel like ‘justice’ to the client or the solicitors, and one wonders how comfortable some judges themselves will feel about the decisions they will now be expected to make.

I touched on this issue in a Law Society webinar on the Mitchell case last week, in which I interviewed Roger Mallalieu, a costs barrister from 4 New Square who acted for News Group Newspapers, and costs lawyer Andy Ellis from Practico, who prepared News Group’s budget. Mallalieu pointed out that the Court of Appeal’s decision will not eradicate all inconsistency at First Instance level, and some judges will inevitably find it too difficult to apply the new approach in some of the cases before them. The barrister suggested that the Court of Appeal will need to keep on handing down these robust decisions if it wants to achieve its aims; and the signs are that it will do so. Indeed, there is another Jackson-related case coming before it this week.

We also looked at some other interesting points emerging from the judgment. Lord Justice Dyson made clear that the courts will not be concerned with ‘trivial’ breaches of rules and procedure, but admitted that there is likely to be some dispute over what exactly should be considered ‘trivial’. A reported judgment from Mr Justice Norris at the end of November, Forstater v Monty Python [2013] EWHC 3759 (Ch), gives an indication of the type of circumstance that will obtain relief. In that case, notification of a conditional fee agreement with success fee was not served on the appropriate form. As all the necessary details had still actually been communicated in a letter, the judge found that relief should be granted. Norris said he was satisfied that his decision followed the same principles as in Mitchell.

In fact, the Mitchell hearing itself involved its own example of what ‘trivial’ may mean. The claimant lawyers had filed their budget six days late, without having fully engaged in the budgeting process to the extent that they should have done – and they were heavily penalised as a result. But what is less well known is that the defendant budget was also filed late, albeit by just one day. Mallalieu explained that there was some confusion over the date that the budget was due.

The deadline is ‘seven days’ before the hearing, but there must be a clear day on either side, so this effectively meant eight days before – and he warned that this is something that lawyers should watch out for. Although there was no finding of any breach by the defendants, Mallalieu said it was clear that if there had been, the court would have granted relief, because the defendants had been fully engaged in the budgeting process and the deadline was only narrowly missed. So this seems to indicate something that would be regarded as trivial.

There was one other very important point that emerged from the webinar discussion. The temptation may be to capitalise on the harsh new climate by holding your opponents to the letter of the rules, and refusing their requests for more time to provide certain information. But the courts are unlikely to be very tolerant of that approach. Mallalieu said he expects some ‘big decisions’ on cases involving unreasonable refusal to agree to extensions of time. The flip side of this tough new regime is that lawyers are expected to be reasonable with one another. If this issue comes before Lord Justice Dyson or Lord Justice Richards, they will come down hard.