CLAIMANT’S APPLICATION FOR RELIEF FROM SANCTIONS REFUSED: A PARTY MORE INTERESTED IN APPEALING A COURT ORDER THAN COMPLYING WITH ITS TERMS…

In  Day v Womble Bond Dickinson (UK) LLP [2021] EWHC 3236 (QB) Deputy Master Toogood refused a claimant’s application for relief from sanctions when there had been a four month delay in applying for permission to amend the Particulars of Claim.  The claimant’s earlier delays, coupled with the failure to particularise the losses sought, clearly played a major part in the decision that was made.  The claimant’s lack of promptness was also significant.

“However I also consider that the application for relief from sanction was not made promptly. Four months passed during which the Claimant and his advisers made no attempt to pursue the limited claim remaining against the Defendant. For three of those months, the Claimant and his legal team were seeking permission to appeal to the Supreme Court and it thus appears that the Claimant had more interest in challenging the Court of Appeal’s decision than in complying with its Order.”

THE CASE

The claimant was bringing an action against his former solicitors, alleging negligence in their defence of criminal proceedings (relating to the unauthorised cutting down of trees) that had been brought against him. The proceedings were issued shortly before the end of the limitation period.  The action has already been to the Court of Appeal where it was held that the claimant’s claim should be confined to the additional legal costs incurred because of the allegedly negligent choice of venue.

RELATED WEBINARS

Some of the issues raised in this case will be considered in a webinar next year “Avoiding Procedural Pitfalls in Personal Injury Litigation”. In particular how to ensure an effective application for relief from sanctions is made, not least by ensuring that the default is promptly remedied. The webinar is on the 22nd January 2022. Booking details are available here. 

THE ORDER MADE IN THE COURT OF APPEAL

The claimant was ordered to serve amended particulars of claim by the 9th April to see whether the defendant would agree. In the absence of agreement the claimant was to make an application for permission to amend by the 7th May 2020 to be heard by a High Court Master.

THE CLAIMANT’S DEFAULT

The claimant served draft amended Particulars on the defendant. The defendant did not consent to the proposals.

THE CLAIMANT’S APPLICATION

The claimant did not make an application by the 7th May 2020.  The defendant wrote on the 3rd September 2020 stating that the action was now at an end. The claimant made an application for an extension of time and relief from sanctions on the 4th September 2020.

THE DEPUTY MASTER’S REFUSAL OF THE CLAIMANT’S APPLICATION
The Applicable Principles
    1. Although there is no explicit sanction for failing to comply with the order dated 8 April 2020, the parties agree that the application is correctly framed as a relief from sanction application. The case had already been struck out in its entirety by HHJ Deborah Taylor, the application to extend time for making the application to amend is made out of time (see paragraph 3.9.15 of the White Book 2021), the case is unable to proceed unless the Particulars of Claim are amended and in any event the court may strike out a statement of case where there has been a failure to comply with a court order pursuant to CPR 3.4(2)(c).
    1. The Denton/Mitchell principles are well-known and are not in dispute between the parties. The court must decide:
i) Whether the failure to comply with the court order is serious and/or significant;
ii) Whether there is a good reason for the failure;
iii) Whether, on consideration of all the circumstances of the case, it is just to grant relief from sanction, bearing in mind the need for litigation to be conducted efficiently and at proportionate cost and the need to enforce compliance with rules, practice directions and orders.
    1. In addition to the cases of Mitchell v News Group Newspapers Ltd [2014] 1 WLR 795 CA and Denton v TH White Ltd and another [2014] 1 WLR 3926 CA, the parties also drew my attention to Stanley v Tower Hamlets [2020] EWHC 1622 QB and Boxwood Leisure Ltd v Gleeson Constructions Services Ltd [2021] EHC 947 (TCC). The parties also made additional submissions in writing when I drew their attention to the Court of Appeal decision of Diriye v Bojaj [2020] EWCA Civ 1400. I will consider these cases further below to the extent that they are relevant to the circumstances of this case.
Applying the principles
    1. The order of McCombe LJ required the Claimant, in the absence of the Defendant’s consent to the draft Amended Particulars of Claim, to issue an application to amend the Particulars of Claim by 4pm on 7 May 2020 to be heard by a Master of the Queen’s Bench Division. No such application was made but on 7 September 2020 this application for relief from sanction was sent to the Court of Appeal. The period of delay is therefore four months at the minimum, but if this application is granted the Claimant still has to issue the application to amend the Particulars of Claim.
    1. The first issue is whether the breach is serious and/or significant. Mr Lee, in his first and second witness statements, accepted that the breach was not trivial. However in Denton the Court of Appeal stated that the focus of the inquiry at the first stage should not be on whether the breach has been trivial but whether it has been serious or significant.
    1. Mr Stewart QC, on behalf of the Claimant, accepted that the breach was serious. He “quibbled” (his word) the significance on the grounds that the application would not have been heard before the autumn in any event due to the application to the Supreme Court and the summer vacation. He submitted that, even if the breach was both serious and significant, the effect (or lack thereof) of the breach on the progress of the litigation was relevant when the Court considered all the circumstance of the case. I will therefore return to this point below.
    1. The second issue I must consider is whether there was a good reason for the failure. In his first witness statement dated 7 September 2020, Mr Lee accepted that the failure to issue the application “was an oversight of mine” (paragraph 15), but in his second witness statement dated 27 October 2020 he stated that the reason for missing the date to make the application was not an oversight but a mistake (paragraph 10). I do not think that this semantic argument assists the court, but I accept that the failure to issue the application was not intentional. Was there good reason for the failure? Mr Lee blames the Covid-19 pandemic. He states that members of his department were furloughed or made redundant so that remaining members of staff had to deal with increased workloads. I note that in paragraph 41 of Mitchell, the Court of Appeal commented that pressure of work was rarely a good reason even where solicitors are facing serious financial pressures. Mr Stewart QC sought to distinguish these comments as managing a workload was not possible in the midst of a pandemic. I have some sympathy with this submission, but only up to a point. It was up to individual firms of solicitors whether to furlough their staff or make members of staff redundant. It was the responsibility of the firm to ensure that there were adequate remaining staff to perform the work that needed to be done. If the delay had been a matter of days or even a few weeks in the initial stages of the pandemic, I might have come to the view that the reorganisation and new ways of working required due to the pandemic constituted a reasonable excuse for missing a deadline. But I do not consider that the pandemic can excuse a four month delay. It is also of relevance that during this period the Claimant’s solicitors were able to pursue the application for permission to appeal to the Supreme Court, indicating that they were able to continue working effectively despite the pandemic.
    1. Mr Lee stated in his first witness statement that he contracted Covid-19 and was unwell in early April 2020. Whilst he has my sympathy, this cannot be a reasonable excuse for missing a deadline on 7 May 2020 and for the four subsequent months.
    1. In paragraph 20 of his first witness statement, Mr Lee stated that he would have been unable to make the application due to the closure of the Courts. This was plainly wrong and in his second witness statement, he accepted that the application could have been filed electronically, although he does not accept that it would have been heard during the four month period of delay.
    1. Mr Stewart QC relied on the judgment of Julian Knowles J in Stanley v London Borough of Tower Hamlets [2020] EWHC 1622, who found that the defendant in that case had a good reason for failing to respond to the service of a claim:
“That reason is the unprecedented national health emergency which was unfolding at precisely the time Mr McConville posted his documents to the Council. From 23 March 2020 onwards the country was grinding to a halt and every employer and business in the UK – and indeed across the world – was suddenly having to develop new ways of working and to find ways of coping with employees not being able to travel into work. There were myriad problems and challenges to be faced, including, for example, establishing technological links and putting in place new systems of working. Parents had to worry about children no longer being able to go to school and all the associated child care issues related to that. Emergency plans were having to be implemented and rapid adjustments made across all sectors of the economy.”
    1. However there are important distinctions between these cases. In Stanley, the documents were served on 25 March 2020 by post to an office which had been closed two days earlier in accordance with the national lockdown. No attempt had been made by the Claimant’s solicitors to ascertain whether the office was open or how proceedings could best be served. The judgment does not give the date of the Defendant’s application, but the hearing took place less than three months after the proceedings had been served and the indications are that the application to set aside default judgment had been made within a few weeks at most of judgment being entered.
    1. Further, in Stanley the Defendant’s solicitor proactively wrote to the Claimant’s solicitors stating that she was instructed to accept service and thus discovered that judgment had been entered. In this case, no application was made until after the Defendant’s solicitors’ letter of 3 September 2020 which noted that the case was at an end. It is odd that this letter was not mentioned in Mr Lee’s first witness statement, but in his second witness statement he acknowledged that the letter resulted in the mistake being recognised (paragraph 20). This was a month after the Supreme Court had rejected the application for permission to appeal and the Claimant had taken no steps at all to progress the case further in that time.
    1. There is no doubt that, as Knowles J stated, the pandemic caused myriad problems and challenges to be faced. However I do not consider that it provides a good reason for failing to issue an electronic application for a four month period between 7 May 2020 and 7 September 2020 when the Claimant’s solicitors had sufficient resources to pursue an application to the Supreme Court in the same case. I note that O’Farrell J in Boxwood Leisure Ltd v Gleeson Construction Services did not find that the pandemic excused a diary error or mistake which was partly caused by remote working. It remained the claimant’s solicitors’ responsibility to ensure that deadlines were met.
    1. I therefore turn to the third stage of the Denton test and consider whether, even though there has been a serious breach of an order for which there is no good reason, relief from sanction should be granted in order to deal with the case justly.
    1. I must exercise my discretion in accordance with the overriding objective of enabling the court to deal with cases justly and at proportionate cost, including the need for litigation to be conducted efficiently and enforcing compliance with rules, practice directions and orders (CPR Rules 1.1 and 3.9).
    1. When considering all the circumstance of the case, I take into account the fact that the Claimant does not have a history of failing to comply with rules, practice directions or court orders. I have also considered carefully that the effect of refusing relief from sanction in this instance would be to preclude the Claimant from bringing the limited part of his original claim in respect of which the Court of Appeal allowed his appeal from the decision of HHJ Deborah Taylor striking out his claim.
    1. However I also consider that the application for relief from sanction was not made promptly. Four months passed during which the Claimant and his advisers made no attempt to pursue the limited claim remaining against the Defendant. For three of those months, the Claimant and his legal team were seeking permission to appeal to the Supreme Court and it thus appears that the Claimant had more interest in challenging the Court of Appeal’s decision than in complying with its Order. A further month passed after the decision of the Supreme Court refusing permission to appeal during which the Claimant took no steps in relation to the action. As I have already noted, this application was only issued after the Defendant’s solicitors wrote to the Claimant’s solicitors on 3 September 2020.
    1. I consider that the delay of four months is particularly significant when set in the context of this claim. Proceedings were not issued until the very end of the limitation period, six years after the allegedly negligent advice. Both at first instance and before the Court of Appeal, the Claimant attempted to pursue a claim to undermine his conviction and its consequences which Coulson LJ described as “inappropriate, wasteful of resources, and likely to bring the law into disrepute” (paragraph 78 of the judgment of the Court of Appeal). It was therefore nearly eight years after the alleged negligence that the Claimant was required to serve Amended Particulars of Claim limiting the ambit of the claim to reflect the Court of Appeal’s judgment. It is unsurprising that there was a tight timetable for serving those Amended Particulars.
    1. As noted above, Mr Stewart QC submitted that the delay had no effect on the progress of the litigation as the application to amend would not have been heard while the Claimant’s application for permission to appeal to the Supreme Court was outstanding, nor would it have been listed during the vacation. It is not possible to know for certain when an application issued on or before 9 May 2020 would have been listed before a Master in the Queen’s Bench Division, although the Masters were hearing applications remotely during this period. I find it hard to believe that such an application would not have been heard significantly earlier than November 2021 when this application has eventually been listed. Although I have considered the criticisms made by the Defendant’s solicitors of the Claimant’s solicitors’ conduct in pursuing the listing of the application, it does appear that the Claimant’s solicitors were making reasonable, if not heroic, efforts to obtain a date for the hearing. Time was taken transferring the application from the Court of Appeal to the QB Masters and there was further delay caused by the need for the application to be CE filed which had not been made clear to the Claimant’s solicitors. However if an application had been made in compliance with the original order, it would have been made directly to the QB Masters and the majority of this delay would not have occurred.
    1. In any event, the effect of the delay on the litigation is not a decisive factor. As Coulson LJ stated in Diriye v Bojaj and another [2020] EWCA Civ 1400:
“If a breach was required adversely to affect the court timetable before it could be called serious or significant, that would be uncomfortably and unacceptably close to the pre-CPR regime, where the defaulting party could get away with repeated breaches of court orders simply because the other side could not show that they had suffered specific prejudice as a result. That is not now the law”.
    1. In this passage the Court of Appeal was considering Stage 1 of Denton, but I consider that this also has relevance when considering all the circumstances of the case. Mr Stewart QC conceded that the breach was serious and although the effect on the court timetable is one of the factors that may be considered by the court in relation to Stage 3, it is only one of many relevant factors.
    1. In Diriye, Coulson LJ also noted that:
“Parties to civil litigation need to make clear the important elements of their respective cases at an early stage. Gone are the days of ambush and keeping important points up your sleeve. The aim of much civil litigation is to bring about a cost-effective settlement. If a claimant delays in providing critical information, particularly where he has been ordered to provide it by way of an Unless Order, that delay adversely affects the other side’s ability to take a view about the strength or weaknesses of the claim they face. The effect on the litigation in question should not be measured simply by whether or not the trial date can still be met; in properly run litigation, the aim must be to avoid having a trial date altogether”.
    1. The Defendant submits that the Amended Particulars of Claim do not particularise the loss which the Claimant seeks to recover. This criticism was first raised by the Defendant’s solicitors in their letter of 17 April 2020 and repeated in their letter of 23 April 2020. Mr Stewart QC submits that it was never in the contemplation of the parties that the Claimant should provide “clarity on precisely what sums it is that your client claims”, as requested by the Defendant’s solicitors, within the short time permitted to amend the Particulars of Claim. However the Defendant’s solicitors also noted that the Defendant needed to know the case it has to answer in its Amended Defence. The Amended Particulars of Claim make no attempt to plead the basis on which the additional costs sought are to be calculated. The pleading does not set out the Claimant’s case on causation, other than to state that the Claimant would have elected trial in the Magistrates Court “regardless of his plea”. Clearly the costs incurred would have been dependent in part on whether the Claimant would have pleaded guilty or not guilty and therefore it is difficult to see how the Defendant can respond if the Claimant does not set out a positive case as to his plea. The Amended Particulars of Claim also ignore Coulson LJ’s observations in paragraphs 66 and 67 of the Court of Appeal’s judgment that it was likely that the Magistrates would have sent the case to the Crown Court in any event as there is no averment that the case would have remained within the Magistrates Court.
    1. The Claimant’s solicitors’ letter of 22 April 2020 does not assist matters. It indicates that the increased costs of the Defence are the entirety of the costs incurred in defending the case in the Magistrates and Crown Court and the appeals to the Court of Appeal and ECJ (over £700,000). This appears to demonstrate a fundamental misunderstanding of the Court of Appeal’s judgment. The letter promised “an updated schedule in this regard in due course”. No schedule has been disclosed and there has been no attempt to explain the basis on which the additional costs should be calculated. The Defendant remains in the dark about the case it has to meet, which precludes any attempt to resolve the matter despite nine and a half years having elapsed since the alleged negligence.
    1. The decision whether to grant relief from sanction is a difficult one in this case. There are factors weighing in both sides of the scales. Considering all the circumstances of the case, I am not persuaded that I should exercise my discretion to grant the Claimant relief from sanction. The Claimant’s case is therefore dismissed.