Judgment Could Have Significant Impact On Future Litigation Cases

A judgment handed down in The Court of Appeal last month has provided further guidance to post-Jackson applications for relief from sanctions (RFS) in litigation cases.

The RFS issue has become a hot topic since last year’s high profile ‘plebgate’ case involving former Conservative party Chief Whip, Andrew Mitchell, and News Group Newspapers.

During the hearing in 2013, Mr Mitchell’s legal team failed to file a costs budget on time which resulted in him being treated by the Judge as having filed a costs budget comprising only the relevant court fees.

Mitchell was subsequently refused relief from sanctions under CPR 3.9 and although at the time he was granted permission to appeal, this was rejected by Court of Appeal.

The strict approach to procedural compliance has caused controversy and a great deal of satellite litigation. The Court of Appeal therefore specially listed three cases to analyse the issue. These were Denton v White & others; Decadent Vapours Limited v Bevan & others and Utilise TDS Limited v Cranstoun Davies & others.

In doing so, it established that the Mitchell decision has led to some confusion in the lower courts and found that there is no rule that relief must be refused for a non-trivial breach lacking a good reason.

As a result, the Judgment highlighted the need for clarification on the interpretation and application of Rule 3.9. and introduces a three-stage test to be applied by courts when determining RFS applications.

This first stage calls for an identification and assessment of the seriousness and significance of the ‘failure to comply with any rule, practice direction or court order’. This replaces the triviality criteria used in the Mitchell case.

Secondly, the reason for the breach much be considered and thirdly, it calls for an evaluation of all the circumstances of the case.

It also recommends ‘heavy costs’ penalties for respondents who unreasonably object to an application for relief.

Mark Elder, Commercial Litigation Partner at Irwin Mitchell in Birmingham said: