SURVIVING MITCHELL 10: AGREEMENTS TO EXTEND TIME YET AGAIN: NEW STANDARD DIRECTIONS

The problems surrounding agreements to extend time remain a constant headache for litigators ever since the decision in Lloyd stated that it was not open to the parties to agree to extend time by consent.  Here we look at the new Standard Directions in relation to extending time  by consent which appear to be of general application. I also highlight some of the potential risk areas and problems when agreeing to extend time.

COURT ORDERS PERMITTING THE PARTIES TO EXTEND TIME

Late last week it was reported that the courts would consider incorporating into orders a direction allowing the parties to extend time. Initially this was confined to clinical negligence cases. However the standard directions now have a potential “all-embracing” form of words which can cover all cases.

THE WORDING

The wording can be found in the Justice menu of model paragraphs (under the heading “restriction of extending timetable”.

“This paragraph can be used at the end of an Order where it is felt necessary to emphasise the restrictions on extending the timetable and limiting it where appropriate.

NB      This will not be necessary in many cases but it may be useful to have in the armoury.  It forms part of the TCC standard directions.

….

1)        The above dates and time limits may be extended by agreement between the parties.  Nevertheless,

a)   The dates relating to trial and pre-trial review cannot be varied without the permission of the court.

b)   The remaining dates and time limits may not be extended by more than xx days without the permission of the court.”

POINTS TO BE CAREFUL ABOUT

 The wording of the draft directions refers to “agreement” between the parties. It is not clear whether the agreement had to be a formal agreement in writing or not.

It would be prudent to assume that the agreement has to be in writing.  I have dealt with this before.

THE NEED FOR A WRITTEN AGREEMENT

 Look at the specific wording of CPR 2.11.

CPR 2.11

 “2.11

Unless these Rules or a practice direction provide otherwise or the court orders otherwise, the time specified by a rule or by the court for a person to do any act may be varied by the written agreement of the parties.

(Rules 3.8 (sanctions have effect unless defaulting party obtains relief), 28.4 (variation of case management timetable – fast track) and 29.5 (variation of case management timetable – multi-track), provide for time limits that cannot be varied by agreement between the parties)”

THOMAS –v- THE HOME OFFICE

I have written before about the decision in Thomas –v- The Home Office  [2006] EWCA Civ 1355.

• The claimant agreed an extension of time for service of the claim form.
• The action was struck out by the District Judge on the basis that the parties could not extend time for service.
• The Court of Appeal held that the parties could extend time.
• However that agreement had to be in writing. This agreement was not.

Lord Justice Neuberger considered what was required by rule 2.11.

 “What is required by rule 2.11?

1. It is accepted on behalf of the claimant that the requirement of r. 2.11 that there be “a written agreement between the parties” means that there must be some written document. However, there was a sharp division between the parties as to what type of document or documents would satisfy that requirement.
2. Before deciding that point, it is, however, necessary to consider an anterior point made on behalf of the claimant, namely that once there has been one variation which is a “written agreement”, any subsequent variation will be valid even if made orally. This argument, as reformulated by Lloyd LJ in argument, is that r. 2.11 is concerned with stipulating that a variation to the time limit in r. 7.5 must be in writing, but that any subsequent variation, being a variation to the time limit agreed in the written variation, is not a variation of the time limit “specified by a rule”.
3. Ingenious though that argument is, it must be rejected, in my view. First, as a matter of principle, it seems to me little short of ridiculous to conclude that r. 2.11 requires the first variation to be in a “written agreement”, but permits any further variation to be oral, or even to arise implicitly in some way. Secondly, ignoring r. 7.6 for the moment, it seems to me that where a claim form is served outside the time limit specified in r. 7.5, the court could only hold that the claim form had been validly served if satisfied that there had been a variation (or series of variations) of the time limit, and such variation or variations would all have to satisfy r. 2.11. Thirdly, as pointed out by Jacob LJ, the logic of the claimant’s argument in this connection is that, once there has been one written variation, there could be no further variations, because there would, on this argument, be no express right to vary the initial variation, and the natural effect of the rules I have been discussing is that the only variations (whether by the court or by the parties) to the time limits contained in r. 7.5 are those permitted expressly in the CPR.
4. That brings me, then, to the question of what constitutes a “written agreement of the parties”. Clearly, it would encompass a single document signed by both parties. However, contrary to Mr Serr’s submissions, I see no grounds, either in principle or as a matter of language, for limiting it to a single document. I can see no reason why an exchange of letters between the two solicitors concerned, in which the extension of time is agreed, would not constitute a “written agreement”.
5. An oral agreement which is then confirmed in writing by both sides appears to me also to be within the concept of a “written agreement”. The oral agreement itself would not, of course, be capable of being a written agreement. However, it seems to me that where, following the oral agreement, the two solicitors exchange letters confirming what they have agreed, the exchange of letters amounts to an agreement in writing that they have agreed (albeit orally) an extension of time: to my mind, it would, at best, be no more than a quibble to contend that an agreement in writing that the parties have agreed something orally does not constitute a “written agreement of the parties”. If the oral agreement, because of the very fact that it was oral, could not validly effect a variation, then it seems to me that there is no reason why it cannot be said that the time limit has been “varied by the written agreement of the parties” even though that written agreement was an agreement between the parties that they had orally agreed the variation.
6. I think things get more difficult where the parties, having orally agreed a variation, each subsequently refer to what has been agreed in correspondence passing between them. An example, albeit of a slightly unusual nature, may be found in the facts of the present case. The claimant’s solicitors effectively confirmed the extension to the 1 April in their letter of 24 February 2005 (and if the defendant’s had replied in a letter confirming this extension, then there would, for the reasons I have just given, have been a written agreement in my view). However, what happened is that, almost four weeks later, the defendant’s solicitor wrote to the claimant’s solicitors in connection with a different matter, namely the expert evidence, and enclosed a letter to the expert in which the solicitor stated that an extension to 1 April 2005 had been agreed.
7. With some hesitation, I have reached the conclusion that this was simply insufficient to amount to a “written agreement” as contemplated by r. 2.11. First, it seems to me to involve an impermissible stretching of the expression to cover the contents of a letter, whose purpose had nothing whatsoever to do with agreeing, but was merely communicating to a third party what had been orally agreed. Secondly, it appears to me undesirable that the question of whether or not there has been a valid agreement should turn on what a solicitor happens to write in subsequent correspondence which was not intended to bear on the question of agreement at all. To my mind, the concept of a “written agreement between the parties”, particularly in the context of the CPR, involves a document or exchange of documents which is intended to constitute the agreement or to confirm or record the agreement. Because one cannot envisage every possibility which might eventuate, I would not want this to be seen as being entirely prescriptive.
8. Having said that, it seems to me clear that an oral agreement between two solicitors, subsequently recorded in a letter sent by one solicitor to the other but not replied to by the other, cannot possibly be said to constitute a “written agreement of the parties”. Similarly, an oral agreement between two solicitors, evidenced by an internal confirmatory note by one solicitor, or even by each of the solicitors, cannot constitute a written agreement, unless, of course, the internal notes are exchanged (or, for instance, one solicitor sends its internal note to the other, and the other in some way confirms in writing its relevant contents).”

SO REMEMBER…

1.             There are some matters that you cannot agree to extend even when there is a court order which may give a general power                   to extend.

2.            It would be prudent to agree any extension in writing. This means the parties sign one document or there is an exchange                   of correspondence.

3.            Unless there is an order permitting you to agree to extend time the only safe assumption is that you cannot.