Landmark Court of Appeal decision in Mitchell – v – News Group Newspapers Limited

The recent decision of the Court of Appeal in Mitchell v News Group Newspapers Limited [2013] EWCA Civ 1537 has provided guidance, in light of the Jackson Reforms, on the circumstances in which relief from sanctions relating to non-compliance with rules, practice directions or court orders will be granted. At the same time, it has provided a stark warning to those who find themselves in breach of unless orders and procedural rules, in particular those who file their costs budgets late.

The Court of Appeal’s decision confirms the more robust approach that will now be taken by the courts in response to Sir Rupert Jackson’s conclusion that the courts have become “too tolerant of delays and non-compliance with orders”. The decision further endorses the Jackson recommendations that emphasis should be placed on (i) the need for litigation to be conducted efficiently and at proportionate cost and (ii) the need to enforce compliance with the rules. The Court of Appeal stated that, whilst the new approach should not be extreme, such that relief is only granted in exceptional circumstances, it should be granted “more sparingly than previously”.

The matter arose as a result of the Claimant’s failure to file his costs budget at least seven days prior to the relevant hearing. Master McCloud sanctioned the Claimant by providing that he was to be treated as having filed a costs budget comprising only the applicable court fees, rather than his actual costs budget (filed late) of £506,425.

The Claimant applied under CPR 3.9 for relief from this sanction.  However, Master McCloud refused to grant relief saying that there were “really no adequate excuses for this breach”. The Claimant then appealed against both the original sanction as well as the refusal to grant relief.

The Court of Appeal held that, in the circumstances, the Master had been entitled to make the order of sanction. In addition, it stated that relief should only be granted in circumstances where:

1.    The non-compliance was trivial (for example, where there is a failure of form rather than substance or where a deadline has been only narrowly missed); or
2.    There is a good reason for the non-compliance (good reasons are likely to arise from circumstances which are outside the party’s control. Overlooking a deadline due to too much work or an administrative error will likely not be considered sufficient reasons).

In giving its judgment, the Court of Appeal emphasised that regard needs to be had for the “needs and interests of all court users” and not just each individual case. Non-compliance affects the efficiency of litigation, which has a knock-on effect on costs and on court resources.

The robust approach taken in Mitchell to applications for relief from sanctions has subsequently been upheld and endorsed by the Court of Appeal in Durrant v Avon & Somerset Constabulary [2013] EWCA Civ 1624, in which the Court allowed the claimant's appeal against an earlier decision to grant relief from sanctions for the defendant's failure to file witness evidence on time.

It is clear from these decisions that the courts now consider it essential that parties and their advocates ensure that they comply with all rules, directions and deadlines unless there is a genuinely good reason for not doing so. Additionally, if a party anticipates missing a deadline, an application to the court for an extension of time should be made promptly and before the deadline has expired.

For further information please contact: Edward Vaughan or Kenny Friday.