LATE SERVICE OF APPLICATIONS, INACCURATE TIME ESTIMATES AND THE PRESUMPTIONS THE JUDGE SHOULD DRAW

In Capita PLC -v- Darch [2017] EWHC 1248 (Ch) Richard Spearman QC highlighted some of the procedural issues that can arise when applications are served late and with insufficient time estimates.   A failure to serve promptly did not, ultimately, assist the applicant.  The case also highlights the importance of accurate time estimates.

“I regret to say that I consider that the estimate of pre-reading time was wildly optimistic – the Skeleton Arguments alone, without appendixes, attachments or other working papers, ran to over 70 pages – and that the 1 day hearing estimate was entirely unrealistic.”

THE CASE

The claimant issued proceedings seeking interim injunctions against employees and former employees.

THE PROCEDURAL ISSUES
  1. The proceedings were begun by a Claim Form issued on 12 April 2017. Capita issued an application notice on the same day. Mr Chalmers and Mr Tailor alone seemed likely to agree to interim relief in a form acceptable to Capita. Capita therefore considered that the hearing of the application would be likely to take more than 2 hours, and were concerned that the application would not be the subject of an effective hearing in the applications list if they did no more than simply provide 3 days’ notice to the Defendants. Accordingly, also on the same day, they applied to Marcus Smith J orally and without notice to any of the Defendants for an Order that the hearing of the application be expedited “to come on on a floating basis commencing on Thursday 27th April 2017 with a 1 day time estimate”. An Order was made in those terms, pursuant to which the application was listed for hearing, for a single day, on 27 April 2017.
  2. It seems to me that, although it did not do so, in accordance with CPR 23.9(3), the Order ought to have contained “a statement of the right to make an application to set aside or vary the order under rule 23.10”. It also seems to me that Capita (whose witness statements in support of the application are all dated 12 April 2017) ought to have suggested directions for incorporation into the Order which provided for a timetable for the service of evidence and Skeleton Arguments with a view to ensuring that (a) the Defendants had the opportunity to participate in the hearing on equal terms, and (b) the time estimate was revised if necessary in light of the stance(s) adopted by the Defendants. Fairness and effective use of court time both point to that conclusion.
  3. In the event, Capita served the Order on 13 April 2017, but did not serve the application notice and supporting materials until 18 April 2017. The materials then served included a Particulars of Claim of 25 pages, a draft Order of 16 pages which contains 45 paragraphs, and a first witness statement of David Barnard which is 50 pages long and which has an exhibit containing 410 pages. A “Confidential Appendix” to the Particulars of Claim and a second “Confidential” witness statement of Mr Barnard were not served at that time, and a covering email from Capita’s solicitors said that these documents would not be served on each Defendant until undertakings had been provided by both the Defendant and the Defendant’s solicitors not to use the “Confidential” materials save for purposes of responding to the present proceedings and not to disseminate the same to any third party. In the case of Mr Darch, for example, on 18 April 2017 he provided the undertaking demanded, on the same day his solicitors confirmed that they would respect the confidentiality of the materials, on 21 April 2017 Capita’s solicitors accepted that confirmation in place of the solicitor’s undertaking that they had previously been demanding, and the “Confidential” materials were served after 4.30pm on 24 April 2017 in 8 separate password protected and encrypted emails, 7 of which were held up by the fire-walls of his solicitors and were only accessed at about 10.20pm that night after his solicitors had obtained external IT assistance. Mr Quinn points out, however, that Mr Darch’s undertaking was withdrawn on 19 April 2017 and only reinstated on 24 April 2017, and service followed very soon after that.
  4. Mr Devonshire complained that this approach was both unreasonable and unnecessary, not least because, as he contended, Capita’s claim to confidentiality was specious or suspect in a number of respects. Among other things, he pointed out that there are a number of procedures pursuant to which, in appropriate cases, the Court can be invited to make express Orders designed to ensure that confidentiality is not lost as a result of materials being deployed in support of an application. He also contended, for example, that there was no or no significant secrecy vis-à-vis the other Defendants about Capita’s allegations of breach of confidence as against Mr Chalmers and Mr Tailor and the confidential information that they had obtained and the use that they had made of it, because those matters were ventilated in open correspondence that is exhibited to Mr Barnard’s first witness statement; and that if Capita’s concerns about confidentiality extended to other information which was not already known to the other Defendants, that did not prevent Capita from identifying in general terms the nature of the information allegedly taken or misused, by whom it is alleged to have been taken or misused, and the nature of the alleged taking or misuse. Counsel for other Defendants made submissions to broadly similar effect, including that the “Confidential Appendix” to the Particulars of Claim had not been served on some of them, and that no application bundle was prepared (or, if prepared, provided to them) until 25 April 2017. It was also submitted that, because the details of Capita’s case were opaque or were provided late, it was not possible for the Defendants to assess whether and to what extent their interests conflicted, so that they had to obtain separate legal representation.
  5. Mr Quinn did not accept that these and other criticisms made of Capita and its legal representatives were valid. He also contended that Capita had complied with the only obligation that was material, by giving the Defendants 3 days’ notice of the application. (In fact, on the basis of the above timings, Capita did not comply with that obligation – in accordance with CPR 2.8, CPR 23.7(1)(b) and 23.7(3) the application notice was required to be served “at least 3 [clear] days before the court is to deal with the application” and to be accompanied by a copy of any witness statement in support, and service after 4.30pm on 24 April 2017 was not 3 clear days before 27 April 2017.)
  6. Against this background, the Defendants’ primary stance at the beginning of the hearing before me was, broadly, that the application should be adjourned to be heard in the week commencing 8 May 2017 with an estimate of 2 days, on the basis that Capita’s protection during the intervening period should be limited to such undertakings as each Defendant was willing to offer. Their secondary or additional stance was that as much progress should be made at the hearing listed to commence on 27 April 2017 with determining the issues raised by Capita’s application on the basis of the materials currently available. Those materials include a witness statement of Mr Short, and both contemporary and party and party correspondence, but no other witness statements filed by them. They contended that Capita has no entitlement to the relief sought, and that this would emerge in the course of progressing matters in that way.
  7. In the event, the Court was able to make available more than 1 day, and the hearing proceeded as suggested by the Defendants’ alternative position and (in addition to pre-reading time, which was estimated by a number of the parties at around 2 hours, although the estimate of Archus was a more realistic 4-5 hours) lasted 2½ days. I regret to say that I consider that the estimate of pre-reading time was wildly optimistic – the Skeleton Arguments alone, without appendixes, attachments or other working papers, ran to over 70 pages – and that the 1 day hearing estimate was entirely unrealistic. Due to the detail and complexity of the submissions made by the 8 Counsel who appeared before me, I was unable to give an ex tempore judgment as I had at one time hoped to do. Following the conclusion of the hearing an Order was agreed as mentioned above.
  8. In these circumstances, the Defendants have chosen to contest the merits of the application without serving any witness evidence save that contained in the statement of Mr Short. On the one hand, Mr Quinn is entitled to point to their failure to respond to specific aspects of Capita’s evidence by witness evidence of their own, and to argue that, to the extent that they have not responded in this way, adverse inferences should be drawn. On the other hand, the Defendants suggest that their decision not to serve evidence in response is explicable on the basis that this would be futile because all that it would do is to give rise to issues of fact which the Court could not be expected to determine on an interim application of this kind. In addition, the Defendants (most of whom are individuals) are entitled to argue that, having been brought to Court on 27 April 2017 by the way in which Capita has chosen to prosecute this application, it is understandable that they should want to use the available Court time constructively and to avoid leaving every issue hanging over them until the week commencing 8 May 2017. In my view, to the extent that Capita makes concrete allegations which the Defendants might be expected to be in a position to answer and in respect of which they have served no opposing evidence, the Court should proceed on the basis that, for present purposes, those allegations are assumed to be correct; but, where assertions are made or questions are raised by Capita which are at the more speculative and uncertain end of the spectrum, Capita cannot complain if the manner in which this application has been prosecuted causes the Court to attach less significance than it might otherwise have thought appropriate to the Defendants’ decision to serve no evidence in response.

THE RESULT

Capita’s application was dismissed (except to the extend the defendants had already offered protection)