THE MITCHELL CRITERIA FOR RELIEF FROM SANCTIONS: A DETAILED EXAMINATION
There has been much comment about the effect of the Court of Appeal decision in Mitchell on litigation and litigators. Here we look, in considerable detail, at the guidance given in relation to relief from sanctions and associated case law.
THERE ARE TWO DIFFERENT CRITERIA
One significant element of the judgment is that there are, in fact, two separate criteria which give rise to different tests. The Court starts with considering the nature of the breach itself.
(1) Where there breach can be regarded as “trivial” then the court will normally grant relief. Provided the application for relief was made promptly.
(2) If the breach cannot be categorised as trivial then there is a much more difficult burden on the party applying for relief.
This is considered at paragraph 40 of the Mitchell judgment.
“If this [the breach] can properly be regarded as trivial, the court will usually grant relief provided that an application is made promptly. The principle “de minimis non curat lex” (the law is not concerned with trivial things) applies here as it applies in most areas of the law. Thus, the court will usually grant relief if there has been no more than an insignificant failure to comply with an order: for example, where there has been a failure of form rather than substance; or where the party has narrowly missed the deadline imposed by the order, but has otherwise fully complied with its terms. We acknowledge that even the question of whether a default is insignificant may give rise to dispute and therefore to contested applications. But that possibility cannot be entirely excluded from any regime which does not impose rigid rules from which no departure, however minor, is permitted.”
EXAMINING THIS IN DETAIL
The breaches here are described in two ways “trivial” or “no more than an insignificant failure to comply with an order”. A number of examples are given:
- A failure of form rather than substance.
- Where a party has narrowly missed a deadline but otherwise fully complied with its terms.
PRACTICAL IMPACT UPON APPLICATIONS FOR RELIEF FROM SANCTIONS
The Court anticipated that the question of whether a default is “insignificant” or “trivial” is likely to be a fertile battle ground for applications. However that is inevitable.
THE SECOND GROUND: BREACHES THAT ARE NOT INSIGNIFICANT
Here an applicant for relief faces a more formidable task.
1. The burden is on the defaulting party to persuade the court to grant relief.
2. The court will want to consider why the default occurred.
3. If there is a “good reason” then the court will be likely to decide that relief should be granted.
This is likely to be the next fertile ground of argument. The Court gave examples:
1. If a document is not filed at court because the party or their solicitor suffered from a debilitating illness or was involved in an accident. Depending on the circumstances this may constitute a good reason.
2. 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 appeared reasonable at the time and could not realistically have been the subject of an appeal.
OVERWORK IS NOT A GOOD REASON
The Court was extremely clear on the point that “overwork” by the solicitor is unlikely to be a good
“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.”
APPLICATIONS IN ADVANCE OF DEFAULT WILL BE LOOKED AT MORE FAVOURABLY
The Court made it clear that “… applications for an extension of time made before time has expired
will be looked at more favourably than applications for relief from sanctions made after the
ADOPTING THE APPROACH TAKEN IN RELATION TO SERVICE OF THE CLAIM FORM
The Court expressly stated that, in considering good reasons a similar approach should be taken to
that adopted in applications for extensions of time to serve the claim form. In Hashtroodi –v-
Hancock  EWCA Civ 652.
“this court said that (i) the discretion to extend time should be exercised in accordance with the overriding objective and (ii) the reason for the failure to serve the claim form in time is highly material. At para 19, the court said:
“If there is a very good reason for the failure to serve the claim form within the specified period, then an extension of time will usually be granted….The weaker the reason, the more likely the court will be to refuse to grant the extension.”
This approach should also be adopted in relation to CPR 3.9.”
GOOD REASONS ARE USUALLY THOSE OUTSIDE THE CONTROL OF THE PARTY IN DEFAULT
“In short, good reasons are likely to arise from circumstances outside the control of the party in default.”
THERE IS LITTLE POINT ARGUING THAT THE ORIGINAL ORDER SHOULD NOT HAVE BEEN MADE
An argument that the original order should not have been imposed is usually misguided. If a party wants to argue that it was not appropriate to make the order then this should be done by way of appeal or, exceptionally by asking the court to vary or revoke it under CPR 3.1(7). This in itself is a discretion exercised sparingly.
- The starting point is that the sanction has been properly imposed and complies with the overriding objective.
- If the application for relief is combined with an application to vary or revoke the order then the latter application should be considered first and the criteria in Tibbles –v- SIG Plc  EWCA Civ 518 applied.
- If there is no application to vary or revoke then a party cannot complain that the order should not have been made, whether on the grounds that it did not comply with the overriding objective or for any other reason.”
“WELL INTENTIONED INCOMPETENCE” WILL NOT ATTRACT RELIEF FROM SANCTIONS
The Court was clear that “… we consider that well-intentioned incompetence, for which there is no good reason, should not usually attract relief from a sanction unless the default is trivial.”
THE OLD CPR 3.9 CRITERIA CAN BE CONSIDERED BUT ARE INCIDENTAL TO THE CRITERIA SPECIFICALLY SET OUT IN CPR 3.9
The Court considered a case in which a judge allowed reinstatement by reference to the old CPR 3.9 criteria:
“The other decision to which we wish to refer is that of Andrew Smith J in Raayan Al Iraq Co Ltd v Trans Victory Marine Inc  EWHC 2696 (Comm). The claimant applied for an extension of two days for the service of its particulars of claim. In substance, the application was for relief from sanctions under CPR 3.9. The judge acknowledged that the list of circumstances that was itemised in the earlier version of the rule had gone. Nevertheless, he proceeded “somewhat reluctantly” to apply the old checklist of factors. We accept that, depending on the facts of the case, it will be appropriate to consider some or even all of these factors as part of “all the circumstances of the case”. But, as we have already said, the most important factors are the need for litigation to be conducted efficiently and at proportionate cost and to enforce compliance with rules, practice directions and orders”.
THE WORDS OF 3.9 ARE PARAMOUNT
Here it is necessary to consider an earlier part of the judgment, at paragraph 37, where the court considered the requirement to consider “all the circumstances of the case”.
“We recognise that CPR 3.9 requires the court to consider “all the circumstances of the case, so as to enable it to deal justly with the application”. The reference to dealing with the application “justly” is a reference back to the definition of the “overriding objective”. This definition includes ensuring that the parties are on an equal footing and that a case is dealt with expeditiously and fairly as well as enforcing compliance with rules, practice directions and orders. The reference to “all the circumstances of the case” in CPR 3.9 might suggest that a broad approach should be adopted. We accept that regard should be had to all the circumstances of the case. That is what the rule says. But (subject to the guidance that we give below) the other circumstances should be given less weight than the two considerations which are specifically mentioned.”
THE WORDING OF CPR 3.9
It helps to return to the specific wording of CPR 3.9 itself:-
“On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need—
(a) for litigation to be conducted efficiently and at proportionate cost; and
(b) to enforce compliance with rules, practice directions and orders.”
1. The first issue is whether a breach falls within the first or second criteria.
2. If the breach is “trivial” or “no more than insignificant” and the application for relief is granted promptly then relief should be considered.
3. If the breach is more than this then the court considers the reasons.
4. The weaker the reason the less likely relief is to be granted.
5. A “good reason” usually involves circumstances outside the control of a litigant or their lawyers.
6. “Overwork” by the lawyer is unlikely to be a good reason.
THE MAJOR ADVANTAGES OF ADVANCE APPLICATIONS TO EXTEND TIME
The Court reiterated the point that applications in advance of breach will be looked at “more favourably”. However even this carried dangers. If the court does not look favourably on an application made prospectively then the applicant is in default. Whether the fact that an application was being made is a “good reason” was not considered in the judgment.
However in In Atrium Training Services  EWHC 1562 (Ch) Mr Justice Henderson stated that the principles in In Robert –v- Momentum Services Limited  EWCA Civ 299 still applied after the changes in 3.9. In Robert the Court of Appeal held that where an application for an extension of time is made before the expiry of the stipulated period this was not a case as one of relief from sanctions. The court’s discretion should be exercised by having regard to the overriding objective. The court considers only the prejudice caused by the failure to take the relevant step and does not, normally, consider pre-existing delay or prejudice – except in exceptional circumstances.
Although the Robert case was not, expressly, referred to in the judgment the Court of Appeal do endorse the principle that applications made in advance of a breach are different to applications made under CPR 3.9 and different criteria apply. However caution has to be any litigator’s watchword.
The Mitchell decision is summarised at http://civillitigationbrief.wordpress.com/2013/11/27/mitchell-key-points-of-judgment/ together with links to many of the leading commentators of the subject.
The decision reiterates all the points made at http://civillitigationbrief.wordpress.com/2013/08/23/litigation-after-jackson-a-10-point-survival-guide/
FINDING THE CASES
- The Mitchell case is at The case is reported at http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2013/1537.html&query=mitchell+and+news+and+group+and+newspapers&method=boolean
- The Atrium case is at http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWHC/Ch/2013/1562.html&query=atrium&method=boolean
- The Roberts case is at http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2003/299.html&query=roberts+and+momentum+and+services&method=boolean
- The Hashtroodi case at http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2004/652.html&query=hashtroodi&method=boolean