LATE SERVICE OF WITNESS STATEMENTS AND RELIEF FROM SANCTIONS IN THE HIGH COURT
In Devon & Cornwall Autistic Community Trust -v- Cornwall Council  EWHC 129 (QB) the claimant’s application for the adjournment of the trial date was refused. However the claimant was given permission to serve witness statements late. Mr Justice Green carried out a comprehensive review of the law and principles relating to effective case management and relief from sanctions.
The action was a dispute between a care home provider and the council as to whether the claimant had been properly paid for services provided to residents in care homes. The claim was put at just in excess of £700,000. The trial window was set for 16th February 2015. Witness statements were due to be exchanged in December 2014. The claimant did not exchange witness statements. The claimant applied to take the matter out of the list on the grounds that it was not ready for trial. The claimant had undergone two changes of legal representation. The first practice being intervened in, the second withdrawing from a conditional fee agreement.
- An application to vacate a trial date was a serious step.
- A full and adequate explanation is needed for default.
- It is not sufficient to blame previous legal advisers – in vague terms.
- The claimant was given permission to serve witness statements late. Subject to a rigorous timetable and paying the entire costs of the application.
- Relief from sanctions and the late service of witness statements (again).
- Serving witness statements late: an extremely dangerous practice.
- Another case struck out because witness statements served late
- The consequences of Chartwell: just don’t ever serve witness statements late
- Relief from sanctions granted after late service of witness statements
- Relief from sanctions after late service of witness statements: one out of three may not be enough
- Another case where relief from sanctions refused when witness statement served late.
- Witness statements cannot be relied upon at trial if served late and relief from sanctions not granted.
- Relief from sanctions and very late service of witness statements and documents
- One year late in serving witness statements – relief from sanctions granted – on terms.
THE DECISION: APPLYING THE DENTON CRITERIA
The judge considered the Denton criteria:
SERIOUS NATURE OF THE BREACH
It was conceded that the breach was serious.
REASONS FOR THE BREACH
The reasons were found to be “opaque”.
- The burden of proof lies with the party seeking relief from sanctions: Mitchell para  (cited below at para ). Here I must consider the reasons given for the failure. As matters stand, I find the reasons advanced to be opaque. I know that the Claimant may have experienced internal difficulties as a result of the engagement of senior personnel with the police, to which I have already alluded (see paragraph  above). However, there is no evidence before me to explain how or why these events actually caused the failure on the part of the Claimant to comply with the court orders. As for the reasons why Kitsons and Leading Counsel withdrew I have been provided with no direct evidence. It is suggested in the witness statement of Mr Salhan (see para  above) that it was the communication by the Defendant to the Claimant’s legal representatives of the police involvement that led to the lawyers terminating their retainer and instructions and that this termination was unjustified. However, this is, in my view, a deeply unsatisfactory manner in which to advance an explanation. On the face of it, I can see no reason why the mere communication of that information would cause the Claimant’s legal advisors to refuse to continue to act unless there were some other, additional, facts, of which I am unaware, that gave rise to serious professional embarrassment on the part of those legal advisors. In my judgment, the reasons which explain why matters have come to this pass cried out for proper and detailed explanation. In circumstances such as this, I would have expected a detailed witness statement from senior employees of the Claimant setting out, with full particulars, the precise events which have led to the present situation and, for reasons set out below, a waiver of privilege thereby permitting the legal advisors to explain themselves.
- I do not consider that any issue relating to privilege can amount to an obstacle to the provision of such a proper explanation. The position of the Claimant now is to blame the conduct of its prior legal advisors which, it is said, could lead to regulatory complaints and litigation. I do not accept that a claimant can hide behind privilege as a reason for not providing an explanation to the court which justifies such an assertion which is advanced by way of exculpatory justification. The situation which has arisen in this case is by no means unprecedented. For example, it is relatively common place in the Court of Appeal Criminal Division (“CACD”) for appellants who have been convicted to instruct new legal representatives for the appeal and then to blame their predicament upon the alleged misconduct and/or breach of duty of previous legal representatives. In such circumstances, the CACD will not, ordinarily, entertain such an appeal without the appellant having waived privilege and without the previous legal representatives having had an opportunity to explain their position to the Court: see e.g. R v Cook  EWCA Crim 734. In the present case, as I have observed, no adequate explanation has been provided by any employee of the Claimant and all that I have before me is a series of unsubstantiated assertions of a particularly serious nature about the conduct of previous legal advisors.
- In paragraph 13 of his skeleton argument Mr Pepperall QC sought to advance a more limited explanation (and thereby retract from the explanation given by Mr Salhan). He stated as follows:
“As a matter of fact, the Court is invited to accept that the reason that the Claimant failed to file evidence as directed was its former solicitors’ actions in terminating the retainer without notice and very shortly before the deadline without first ensuring that they had either complied with the court’s order or provided the Claimant with their working papers”.
- I am conscious of the difficulties which Mr Pepperall QC now confronts. His invitation to me seeks to avoid reliance upon the underlining reasons which led to the termination of the retainer by the Claimant’s previous solicitors and to focus solely upon the simple fact of the departure of the previous solicitors as good reason. No reference however is made in the skeleton to the fact that Leading Counsel also terminated his retainer. I do not accept that the mere fact that previous representation has ceased to act is or can be an adequate explanation in circumstances where the reasons for that occurrence require elucidation.
- My conclusion is reinforced by the fact that in Mitchell (para ) the Court of Appeal made clear that the burden of proof lay upon the applicant and that the proffering of an explanation based upon the failure of legal representatives may well not be a sufficient explanation:
“If the non-compliance cannot be characterised as trivial, then the burden is on the defaulting party to persuade the court to grant relief. The court will want to consider why the default occurred. If there is a good reason for it, the court will be likely to decide that relief should be granted. For example, if the reason why a document was not filed with the court was that the party or his solicitor suffered from a debilitating illness or was involved in an accident, then, depending on the circumstances, that may constitute a good reason. Later developments in the course of the litigation process are likely to be a good reason if they show that the period for compliance originally imposed was unreasonable, although the period seemed to be reasonable at the time and could not realistically have been the subject of an appeal. But mere overlooking a deadline, whether on account of overwork or otherwise, is unlikely to be a good reason. We understand that solicitors may be under pressure and have too much work. It may be that this is what occurred in the present case. But that will rarely be a good reason. Solicitors cannot take on too much work and expect to be able to persuade a court that this is a good reason for their failure to meet deadlines. They should either delegate the work to others in their firm or, if they are unable to do this, they should not take on the work at all. This may seem harsh especially at a time when some solicitors are facing serious financial pressures. But the need to comply with rules, practice directions and court orders is essential if litigation is to be conducted in an efficient manner. If departures are tolerated, then the relaxed approach to civil litigation which the Jackson reforms were intended to change will continue. We should add that applications for an extension of time made before time has expired will be looked upon more favourably than applications for relief from sanction made after the event”.
- In paragraph  of Mitchell, the Court stated that good reasons are likely to arise from circumstances outside the control of the party in default and in so saying the Court was indicating that the conduct of lawyers was a matter within a party’s control.
- In Denton (at paragraph ) the Court of Appeal added the following rider to the observations made in Mitchell:
“30. It would be inappropriate to produce an encyclopedia of good and bad reasons for failure to comply with rules, practice directions or court orders. Para 41 of the Mitchell case gives some examples, but they are no more than examples”.
- I do not read Mitchell as precluding in all cases reliance upon the conduct of present or past legal advisors. However, the suspicion I harbour, which I freely acknowledge may be wholly unjustified, is that in this case the reason for the breakdown in relations between the Claimant and its previous legal advisors and which has led to the latter’s departure had some connection to the problems which the Claimant’s senior employees were then facing in relation to investigations being conducted by the police and/or the Care Quality Commission (“CQC”). It is for this reason that, as I have already explained, this case cried out for a full, detailed and candid explanation of the relationship between the Claimant and the previous legal advisors. Although criticism is essentially directed at the conduct of Kitsons I cannot ignore the fact that Mr Philip Coppel QC also no longer appears for the Claimant. I can at least make the prima facie assumption that both Kitsons and Counsel were aware of their professional duties and will not have acted lightly. This is a further reason which compels me to the conclusion that the explanations presently proffered fall far short of being adequate.
- I have therefore come to the conclusion that no good reason has been advanced to explain away the serious failure.
ALL THE RELEVANT CIRCUMSTANCES
The judge considered the law relating to all the relevant circumstances in some detail. He then considered: (a) whether he should vacate the trial date; (b) whether permission should give to serve witness statements late.
- I start by considering whether I should vacate the trial date in order to give extra time for the drafting and service of witness statements. I consider that the issues of trial date and permission to serve statements are interlinked so I will assess them together, in the round.
- First, the breaches of court orders in this case are not only serious in and of themselves but they are the combination of approximately two years of inadequate conduct of the case by the Claimant as evidenced by the fact that even as late as November 2014, and in addition to the failure to serve witness statements, key particulars of the claim had still not been provided despite numerous forays into the Master’s corridor.
- Secondly, as matters stand, and notwithstanding the valiant efforts of Mr Pepperall QC for the Claimant, I am far from satisfied that the full story has been placed before the Court and therefore that I am in possession of all the surrounding circumstances. I do not consider that I can do justice to the Defendant if I simply accept the account of the relevant circumstances said to favour the Claimant without being able properly to evaluate those explanations. This means that there is nothing to balance against my prior conclusion that the breaches are particularly serious. And this means that there has to be some fairly strong and compelling counterweight to warrant the grant of relief.
- Thirdly, it is submitted that a vacation of the trial is a moderate step and involves a delay of only four months which is reasonable. I do not accept this. I must consider the two factors (a) and (b) set out in CPR 3.9 and referred to explicitly in Mitchell at paragraph . These are not paramount but they carry particular import. It is true that in many, if not most, cases a failure to observe a rule can be remedied by an extension of time permitting the defaulter to “have another go” or “get its act together”. However the Court’s timetable is congested and all adjournments have consequences. A climate in which it could be said that a serious, ill-explained, breach should be overcome through an extension of time in which to comply or an adjournment as a matter of routine runs counter to the very change of ethos that the Court of Appeal in Mitchell and Denton was so anxious to bring about. This is why, although a court should not be reluctant to afford extra time in proper cases, it cannot be an automatically acceptable default position. In any event, in the absence of a proper explanation to account for the present failure, and, in view of the evidence given by the Claimant, that it is likely to be in litigation with its previous solicitors who retain a lien over papers, I can have absolutely no confidence that adjourning this case will have the desired effect. In any event, if I vacate the trial there is also no guarantee that it can be listed for June (the Claimant’s suggestion). More likely it would be adjourned for a much longer period.
- Fourthly, in Mitchell, the Court of Appeal made clear that the failure of solicitors would not, ordinarily, be accepted as an adequate reason for granting relief from sanctions. In the present case, as I have observed, the Claimant seeks to lay the blame at the door of its previous advisors. Mr Pepperall QC accepts that the default on the part of legal advisors is, at least prima facie, not a point that he can pray in aid. But he submits that the case is exceptional and that a refusal to grant relief would leave the Claimant with a remedy only against the previous lawyers which relegates the claim to one of loss of a chance. He cited Welsh (see para [34(vii)] above) and submitted that a denial of relief was tantamount to a rejection of the claim and the Claimant would then be left with such claim as it had against its past lawyers for loss of a chance. I do not accept the analysis. The underlying premise that the lawyers are at fault (even prima facie) is unproven. I am not, in any event, satisfied that refusing an adjournment will mean that the Claimant is in fact limited to any remedy that it may have, in negligence or breach of contract or otherwise, against its previous lawyers. The nub of the issue is what I should do about witness statements under the current timetable.
- Fifthly, in my judgment there is, in all these circumstances, no justification for vacating the trial date. The decision that I have taken not to vacate the trial, however, creates a conundrum. If I force the Claimant to proceed, at double quick time, to trial but without the ability to adduce witness evidence this will dramatically curtail the ability of the Claimant to advance a serious case. It will render the trial process highly artificial and in all likelihood futile. On the other hand, the logic of my analysis leading to a refusal to adjourn the trial might be said to lead, inevitably, to the conclusion that the Claimant should also be prevented from adducing evidence. I am conscious that an underlying theme behind the clarification of the Court of Appeal in Denton was the need to enable justice to occur and that this involves an assessment of proportionality. It seems to me therefore that the proper and proportionate balance to be struck in this case is to require the Claimant to proceed to trial but not artificially to tie its hands by preventing it from calling witness evidence in a case which will, on my analysis of the pleadings, require witnesses to be cross-examined. I will therefore permit witness statements to be served within a tight timetable backed by an unless order prohibiting the Claimant from relying upon witness evidence at trial in default of due service.
- The trial will not be vacated. The Claimant will be allowed to serve witness statements subject to an unless order. The Claimant is to pay the entirety of the Defendant’s costs of this application. Other directions have already been given to facilitate the passage of the case to imminent trial. These have been made upon the basis of my conclusion that, although very demanding, compliance with an exacting timetable is possible and the parties can be ready for trial in February 2015.