‘Serious or significant’ v ‘trivial’
After seven months of madness, the Court of Appeal has now handed down a judgment “clarifying and amplifying” its decision in November 2013(Mitchell v News Group Newspapers Ltd), which the court said has been “misunderstood and….misapplied”.
In Mitchell, the Court of Appeal decided that breach of a court timetable or rule, unless it was either a trivial breach or there was a good reason for it, was inexcusable and relief from sanctions imposed as a result of the breach would very rarely be given. These principles were then applied in a number of subsequent cases without regard to the proportionality between the consequences of the breach and the nature of the sanction. The judgment was intended to encourage compliance with court timetables and speed up litigation, but their Lordships had failed to appreciate that this would have completely the opposite effect. The usual cooperation between opposing parties disappeared as the most insignificant breach of a timetable or the CPR might result in a windfall for the innocent party. As a consequence, the courts were inundated with a deluge of contested applications where defaulting parties were seeking relief from sanctions.
In this case the Court of Appeal dealt with three appeals, each of which concerned case management decisions and relief from sanction dealt with under the so-called Mitchell approach noted in the report above – i.e. the common view that after that case, the Court would not grant relief from sanction for any “non-trivial” breach unless there was a “good reason” to do so (and pressure of work and deadlines in other cases would not normally amount to a “good reason”).
The result had been extremely defensive decision-making by solicitors, many of whom seemed to decide that this new approach (a) meant they should never agree to requests for extensions of time, in the hope of a windfall if the other side did not comply with the existing deadline and (b) it was safest to apply for additional time early and often if there was the slightest risk that a deadline might not be met, because of the disastrous effects of missing it. The result was that extensions of time were not being agreed and the Courts were flooded with applications for extensions of time which would otherwise have been agreed which were clogging up the Courts, delaying cases and increasing costs – the very opposite of what the Court of Appeal in Mitchell had been trying to prevent.
In Denton the Court of Appeal emphasised the guidance given in Mitchell was substantially sound, but then re-stated that guidance in modified terms (or at the very least, terms with a different emphasis). The test was whether a breach was “serious or significant” rather than “trivial”, and additional emphasis was placed on the need for the judge to consider all the circumstances of the case, the third stage of the Mitchell guidance, has been given far more prominence.
For anyone dealing with litigation on a day-to-day basis this is obviously welcome, and perhaps unsurprising; in the way it was being applied Mitchell was leading to absurd and manifestly unfair results, fully demonstrating the importance of the law of unintended consequences. It remains to be seen how the modified Denton guidance will be applied, but it is plain that it leaves judges (and thus parties) with more “wiggle room.” That is not to say that it is a return to the previous era where extensions will be granted almost as of right, subject only to costs where a trial or hearing date can be maintained; and it will be interesting to see how much of the defensive decision-making seen after Mitchell this does away with. It will likely remain the case that experts and lawyers alike will have to treat deadlines with more respect than perhaps they did in the past (when they tended to be targets to be attempted rather than anything else). The appeal of “overtrading”, i.e. taking on too much work in the belief that an extension can be obtained if one is required, is still likely to be significantly diminished even after the revised, moderated guidance in Denton.