• At Kemp Little, we are known for our ability to serve the very particular needs of a large but diverse technology client base. Our hands-on industry know-how makes us a good fit with many of the world's biggest technology and digital media businesses, yet means we are equally relevant to companies with a technology bias, in sectors such as professional services, financial services, retail, travel and healthcare.
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The Court of Appeal clarifies Mitchell guidance on relief from sanctions - a welcomed departure from the hardline approach to procedure

In Mitchell v News Group Newspapers, the first decision handed down following the implementation of the Jackson reforms in April 2013, the Court of Appeal took a robust stance on whether to grant relief from sanctions against procedural breaches. It set a precedent for courts to be strict in enforcing compliance with rules and directions.

In Mitchell, the Claimant was refused relief from sanctions when his solicitors failed to try to agree the Claimant’s costs budget with the other side and did not file the budget on time - filing it the day before, rather than seven days before, the Case Management Conference.  As a result, the Court ordered that the Claimant’s costs recovery, if successful, would be restricted only to court fees, rather than the likely hundreds of thousands of pounds that might actually be incurred.  This controversial decision implied that relief would not be granted, save for exceptional circumstances.  

Following Mitchell, which was upheld by the Court of Appeal, judges across the country have grappled with various different applications for relief from sanctions, trying to find a way to continue the robust approach advocated in Mitchell, without acting disproportionately or, worse still, preventing access to justice.  The result was a plethora of conflicting decisions, leading to uncertainty as to when relief would be granted. 

Thankfully, in the recent conjoined cases of Denton v TH White Ltd, Decadent Vapours Ltd v Bevan, Utilise TDS Ltd v Davies [2014] EWCA Civ 906 which can be accessed here, the Court of Appeal has offered helpful guidance.  The Court confirmed that robust case management remains crucial, however it has set out a three-tier test to clarify the approach that judges should take when considering applications for relief from sanctions.  The test is as follows:

  1. Is the breach serious or significant? - the Court of Appeal has moved away from focussing on the triviality of the breach in question, in favour of considering the other extreme, i.e. whether the breach was “serious or significant”. If it is not serious or significant, relief should usually be granted.
  2. If yes to (1), did the breach occur for a good reason? If so then, relief should be granted. An example of a ‘good reason’ would be a party or their solicitor suffering a debilitating illness. On the other hand, missing a deadline due to the pressures of work would not constitute a good reason.
  3. Regardless of the answers to (1) and (2), what are the surrounding circumstances? – there may still be grounds for granting or refusing relief (as the case may be) in all the circumstances.  The surrounding circumstances for consideration include: the promptness of making the application, any other previous or contemporaneous breaches, and conduct of the party generally.  

The clarified test is seemingly a retreat from Mitchell. This is not to suggest, though, that relief from sanctions will now be granted lightly.  The Court of Appeal was clear that court deadlines must still be observed. Parties to litigation can nonetheless take some comfort from the fact that, as a result of this recent decision, opportunistic challenges which seek to exploit inconsequential defaults in procedure or short delays to deadlines, are unlikely to succeed. Hopefully, the decision will therefore encourage more cooperation between opposing parties, rather than a deluge of satellite litigation. 

For further information, please contact Jeremy Harris or Emily Nuttall