APPLYING FOR RELIEF FROM SANCTIONS: TWO CLASSIC MISTAKES AND A REMINDER OF 10 KEY POINTS

The judgment in Diriye v Bojaj & Anor [2020] EWCA Civ 1400 shows, at least, two classic mistakes that people make when applying for relief from sanctions: not making the application promptly and not remedying the default properly (in fact not at all according to the Court of Appeal).   It is worthwhile looking at those mistakes and then re-visiting 10 key points in relation to these applications.

“The need to act promptly if a party is or might be in breach of a Court Order is axiomatic”

DELAY IN MAKING THE APPLICATION

The claimant delayed in making the application.   In a letter on the 17th April 2018 the claimant’s solicitors conceded that an application for relief from sanctions was needed but did not make that application until the 31st May 2018.  Delay at this stage is never helpful to an application.  This led to the court observing:

“The first matter relevant to stage 3 was the delay in the making of the application for relief from sanctions (as per Oak Cash & Carry). Here there was a total delay of two months in the making of this application (6 April to 5 June 2018). That is despite the fact that the appellant’s solicitors knew, and acknowledged on 17 April, that such an application was required. The need to act promptly if a party is or might be in breach of a Court Order is axiomatic: 23 PDA 2.7 requires action when that party knows the application is “necessary and desirable”. In my view, in the present case, that was before and certainly not later than 17 April. In a case with a trial date fixed for November, to allow weeks and months to go by before even making the application for relief from sanctions was unsupportable. The delay in making the application therefore militates strongly against granting relief from sanctions.”

FAILURE TO COMPLY EVEN AFTER THE BREACH

The Court of Appeal held that the claimant had failed to comply with the peremptory order to give disclosure of documents relevant to the claimant’s impecuniosity.

“48. I consider that, on analysis, the Reply, even when served, did not comply in substance with the Unless Order^[1]. That Order required the Reply to set out “all the facts” relied on in support of the assertion of impecuniosity. The appellant was a minicab driver, and that was the source of his income. So, the Reply needed to set out what his income was and what his expenditure was, and how those figures meant that he could not afford to hire a replacement vehicle. Yet all the Reply said on this topic was at paragraph 5, which stated simply that “As he earned cash as a minicab driver, he expended the same on bills and daily living allowances for his family”. Nothing else of relevance was provided. No figures for income were pleaded at all.

1. 1. For completeness, I should say that this position was not improved by the appellant’s subsequent witness statement for the trial, served well before the hearing before the DJ in August 2018, where on the same subject, the appellant just said:

“I had no money to repair or buy another car and all my accounts were close(d) to their overdraft limits and my credit cards had reached the maximum credit card limit. I have a bad credit rating as I have outstanding credit card bills so I could not get a loan.”

 A REMINDER OF TEN KEY POINTS IN RELATION TO APPLICATIONS FOR RELIEF FROM SANCTIONS

1. IF YOU ARE MAKING AN APPLICATION FOR RELIEF MAKE IT AT ONCE

The speed with which an application is made is a factor that the court can take into account when considering the discretion.

1. Speed here is probably best measured in hours, days at the most. If it is measured in weeks then the writing is probably already on the wall.

“I also have in mind, although this is a point of more minor weight, that there was a delay which I regard as excessive in making this application to seek relief from sanctions. It was a week after Flaux J’s order and almost two weeks after the deadline had expired.” Popplewell J Sinclair -V- Dorsey & Whitney (Europe) LLP [2015] EWHC 3888 (Comm)

2. MAKE THE APPLICATION PROPERLY AND GIVE IT A REALISTIC TIME ESTIMATE

This is a matter of judgment. However if the application is going to be contested then the application is rarely going to be shorter than an hour.  If the time estimate is 10 minutes and two advocates turn up then, in extreme cases, the application itself may be struck out. Certainly there will be an adjournment at someone’s expense (usually the applicants).  However:

1. A respondent owes a duty to the court. If it is clear that the time estimate is inadequate then it is wise to point this out to the applicant, and the court, at the earliest opportunity.
2. If (as sometimes happens) the application is consented to then, again, the parties should let the court know at the earliest opportunity.

3. THE EVIDENCE IN SUPPORT SHOULD BE AN EXPLANATION AND NOT AN EXPOSITION

Many, many, many witness statements in support of  (and in opposition to)   an application for relief take the opportunity to provide the court with huge chunks of the Court of Appeal judgment in Denton. Sometimes chunks from Mitchell and earlier as well for good measure.

1. Most judges are now familiar with the Denton principles.  Arguing points of law in a witness statement add to the time and expense.

2. The fact that someone can operate the cut and paste feature to produce lengthy “statements” is rarely synonymous with legal erudition.

3. Keep the statement as short as possible. Explain the relevant background to the matter; explain (and be totally honest) about why the breach occurred. Explain what has been done to remedy the situation.

4. EVERY SINGLE THING SHOULD BE PERFECT, JUST PERFECT

An application is not helping their cause if witness statements are inadequate, pages missing, exhibits unmarked and bundles not lodged, or lodged in time. These may appear to be minor matters (they are not). An applicant seeking relief from sanctions needs all the help they can get.

5. PUT THE BREACH RIGHT BEFORE THE HEARING

Any default is going to be compounded if it is not put right before the hearing. The fact that a party remains in default at the date of the hearing is likely to be a major, if not determinative, factor.

” Further, even now, some eight weeks after the extended deadline, the claimants are still not offering security which is satisfactory. “

(Mr Justice Popplewell in Sinclair -v- Dorsey & Whitney [2015] EWHC 3888 (Comm).)

6. OFFER A PLAN OF ACTION WILL WHICH IS POSITIVE, ECONOMIC, AND PROGRESSES THE CASE

It is often forgotten that the amended CPR 3.9 and the Denton criteria arise in the context of a situation where judges are under a legal duty to manage cases in accordance with the overriding objective (CPR 1.2 & 1.4) and the parties are required to help the court to further the overriding objective (1.3).  It can help a party in default if it has suggestions (including draft directions) which put will put the case back on an appropriate course.

7. BUNDLES, SKELETONS AND SUBMISSIONS SHOULD BE LODGED AT COURT WELL AHEAD OF THE DATE OF THE HEARING

Which involves (coincidentally) instructing your advocate well ahead of the date.

8. IF AT ALL POSSIBLE THE PERSON RESPONSIBLE FOR THE DEFAULT SHOULD ATTEND THE HEARING (EVEN IF THEY ARE NOT DOING THE ADVOCACY).

I am not recommending this as a form of shaming or public contrition. It is a matter of utility. It is surprising how often matters come up at a hearing for relief from sanctions which require clarification.   Having the relevant person present, together with the file, can speed up time, and ease the application greatly.  There are matters that can be omitted from the fullest of instructions.  This helps both in relation to past conduct and also the proposed directions/future management of the case.

9. DO WHATEVER THE COURT ORDERS AT ONCE: DON’T WAIT

If relief from sanctions is granted then get on with the case with speed and diligence. Whatever happens do not allow any further breaches to occur.  I have been to several hearings where there was a second application for relief from sanctions. Things do not, generally, turn out well for applicants.

10.WHATEVER HAPPENS LEARN FROM THE EXPERIENCE (AS AN INDIVIDUAL AND AS A FIRM)

It is tempting (and understandable) to put a stressful (and often expensive) experience behind you. However those incidents (or that inactivity) that lead to the need for relief from sanctions are often warning signs that issues need to be addressed. Even if relief is not granted in that particular case the experience can, and should, be used to ensure that it does not happen again.