NOT COMPLYING WITH DIRECTIONS OR REPLYING TO CORRESPONDENCE – AND THEN BLAMING THE OTHER SIDE: IT DOES YOU NO CREDIT

There are several matters of general interest in the judgment of Mrs Justice Pepperall in Essex County Council v UBB Waste (Essex) Ltd [2019] EWHC 819 (TCC) (02 April 2019).  Here we look at the dangers of simply failing to meet a timetable, failing to respond to correspondence and then blaming your opponent when the matter becomes pressing (a not uncommon event in the world of litigation). It pays to remember that any  correspondence you write can sometimes be read out in open court.

“… I am bound to observe that it was the letter of 14 January that, to borrow the expression, did no credit to its author. A simple apology for UBB’s delay in dealing with this issue would have been far more appropriate than this combative response.”

THE CASE

The action concerned the building of mechanical biological waste treatment plant. The claimant seeks an order that it was entitled to terminate a PFI contract with the defendant. The defendant ascribes failures to the claimant.

THE HEARING

The hearing was listed to hear the defendant’s application for permission to amend its defence and counterclaim.  The case is listed for a 10 day trial in May and June 2019.

EVENTS LEADING UP TO THE APPLICATION

The judge considered matters leading up to the application. It involved a history of the claimant chasing the defendant for responses and the defendant failing to respond.

    1. Notice of application was filed on 22 January 2019. It was heard on 19 and 22 February 2019, just ten weeks before trial.
    2. Essex issued this claim on 28 April 2017. UBB filed its original Defence and Counterclaim on 30 June 2017 and Essex served its Reply and Defence to Counterclaim on 29 September 2017. UBB amended its Defence and Counterclaim on 14 November 2017 and Essex amended its Reply and Defence to Counterclaim on 20 November 2017, but there the pleadings rested until last summer.
    3. In August 2018, both parties wished to amend their statements of case. There were good reasons for reviewing matters at that stage since a number of things had changed since the case was first pleaded. The parties had given disclosure. Further, there had been developments on the project itself because this litigation concerns an ongoing contract. In addition, there had been developments as a result of the adjudications between the parties. The parties therefore agreed a timetable for the orderly and sequential service of the proposed amendments:
14.1 Essex was to provide its proposed amendments to the Particulars of Claim by 24 August 2018.
14.2 UBB was to provide its draft re-amendments to the Amended Defence and Counterclaim by 7 September 2018.
14.3 Essex was to provide its draft re-amendments to the Amended Reply and Defence to Counterclaim by 21 September 2018.
Such timetable was tight, especially in view of the size of disclosure in this case. It was, however, agreed and had the advantage that, if adhered to, the pleadings would have been finalised before the parties were due to exchange witness and expert evidence.
    1. In accordance with the parties’ agreement, Essex served its draft Amended Particulars of Claim on 24 August 2018. UBB consented to these amendments by its solicitor’s letter of 11 October 2018. UBB failed, however, to provide its draft re-amendments by the agreed deadline. Slaughter and May (the council’s solicitors) chased the re-amendments on 24 September, 1 October and 8 October 2018 before UBB served a draft on 11 October 2018.
    2. On 31 October 2018, Slaughter and May responded to UBB’s draft. It provided a detailed schedule responding to each proposed re-amendment. It offered to agree some re-amendments upon terms while many others were contested. In a number of instances, Essex sought further information as to how UBB put its case.
    3. UBB failed to respond to Essex’s schedule until 14 January 2019. During this period, Slaughter and May chased a response on no less than three occasions:
17.1 By letter dated 15 November 2018, it pointed out that it was “crucial for the pleadings to be settled between the parties at the earliest opportunity.” Yet still UBB neither responded nor acknowledged Slaughter and May’s letter.
17.2 Slaughter and May wrote again on 29 November 2018. It pointed out that UBB’s proposed amendments ought to have been provided by 7 September 2018 and that the situation was “unacceptable.” It added:

“UBB’s delay in this respect is adversely affecting the parties’ ability to progress matters of factual and expert evidence further. Indeed, you have now written to us demanding responses by return on certain matters of expert evidence, whilst at the same time failing to clarify your client’s position on its Proposed Amendments and failing to respond to the Authority’s reasonable requests for further information as to what issues of expert evidence your client considers to be in dispute. As we have made clear in separate correspondence, it would not be efficient or appropriate for the parties’ respective experts to meet without any clarity on UBB’s pleaded position.

In the absence of any response from your client, the Authority has no choice but to proceed on the basis that UBB has abandoned all of its Proposed Amendments which have not already been conditionally agreed by the Authority.

In respect of those of UBB’s Proposed Amendments which the Authority has indicated it was prepared to agree to subject to UBB providing the customary confirmations, please now provide such confirmations by return, or alternatively confirm whether your client has now abandoned these proposed amendments. As a number of these amendments have significant implications in relation to the issues of expert evidence in dispute between the parties in these Proceedings, it is imperative for UBB to clarify its position promptly in light of the timetable for the experts’ meetings.”

Again, this letter went unanswered.
17.3 By letter dated 8 January 2019, Slaughter and May set out the history of the re-amendments and wrote:

“Accordingly, given the lapse of time and the stage now reached in the Proceedings the Authority will only agree to any amendments to UBB’s Amended Defence which are wholly consequential upon the agreed and filed amendments to the Particulars of Claim, provided that such amendments are submitted within seven days of the date of this letter.”

    1. When finally responding to the schedule of detailed comments upon the re-amendments on 14 January 2019, Norton Rose Fulbright asserted:
“The Schedule contains numerous queries about almost every amendment made by UBB. It is another example of the Authority’s wholly unreasonable approach to this litigation which appears to be designed to maximise the amount of legal costs incurred by all parties. The Authority’s approach does it no credit at all.
UBB’s case as set out in the proposed amendments is adequately pleaded. UBB would therefore be entitled to refuse to respond to the Schedule. However, in order to avoid yet another pointless interlocutory battle, UBB has responded in the attached schedule.”
  1. I have rightly not been told what earlier conduct in the course of this heavily fought litigation might have moved the author of that letter to regard the argument over these re-amendments to be “another example”, but I wholly reject the suggestion that Essex’s approach to this issue was “wholly unreasonable” or that it was conduct designed simply to maximise legal costs. Indeed, I am bound to observe that it was the letter of 14 January that, to borrow the expression, did no credit to its author. A simple apology for UBB’s delay in dealing with this issue would have been far more appropriate than this combative response.
  2. Mr Ramsden, UBB’s solicitor, explains that the delay was simply caused by the weight of work on this case. Nevertheless, Roger Stewart QC, who appears for UBB with George McDonald, realistically accepted that UBB should have been able to respond to the council’s schedule by mid-November and that it had therefore unreasonably delayed some 2 months in dealing with this issue. I agree. There was also earlier default in failing to propose the re-amendments in accordance with the agreed timetable. The net effect is that the application to re-amend was not made until 22 January 2019 and could not be heard until 19 February, just three days before the pre-trial review and ten weeks before trial. With proper attention to this issue, UBB’s application to re-amend should, in my judgment, have been made last autumn and heard before Christmas.
  3. In the interim, witness statements were exchanged on 16 November 2018 with responsive statements exchanged on 14 December. The parties’ expert witnesses have also filed their joint statements and, on 8 February 2019, their reports. There is, however, further work to be done. Disclosure, while always a continuing obligation, is rather more open-ended in this case given that the parties remain in a contractual relationship. I am told that further updating disclosure will therefore be given before trial. Furthermore, Marcus Taverner QC, who appears for Essex with Daniel Churcher, explained that the waste experts will have to update their reports. At the moment they have dealt with data as to the composition of waste processed by the facility in 2016 and in the first two quarters of 2017. Essex’s expert is now to be asked to analyse the data from the second two quarters of 2017 and the whole of 2018.
  4. Mr Taverner does not suggest that the trial date is at risk. He stresses, however, that that is in large measure because Essex is extremely anxious to keep the trial date and that accordingly it will devote the necessary resources to deal with the re-amendments.
  5. The mere fact that the trial date is not in jeopardy is not decisive. While Mr Stewart observes that Essex has instructed a large and highly experienced legal team, it has deployed the resources that it considers necessary in order properly to prepare and present its case at trial. A case of this size requires significant and intensive preparation in the weeks before trial and Essex is entitled to expect to be able to devote its efforts to that end, rather than find itself diverted from its own case preparation in dancing to UBB’s tune in meeting late amendments.
  6. It is, however, significant that there is no suggestion that these re-amendments put the trial date at risk or require further disclosure. In addition, for the most part, these re-amendments do not require any further evidence to be filed. It is also important to keep in mind that, while the draft has passed through a number of iterations, the text of the re-amendments was substantially provided to the council on 11 October 2018.