Tough new world?

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In recent years there has been a growing culture of toleration of delay and non-compliance with Court Orders in litigation.  No more!  1 April 2013 saw the introduction of a new stricter regime which cracked the whip at those disregarding deadlines or failing to comply with Court directions.

If there has been a breach of a direction or a deadline has been missed, a party to litigation must make an application to the Court for “relief from sanctions”, or else risk all or parts of their claim or defence being struck out.

The Court previously considered a wide number of factors when determining whether a defaulting party should be granted relief from sanctions.  However, the Court now has a new overriding objective – to deal with cases justly and at proportionate cost, and to enforce compliance with rules, practice directions and orders.

Prior to the implementation of the reforms, Lord Dyson warned that parties can “no longer expect indulgence if they fail to comply with their procedural obligations”, hailing the commencement of a tougher no-tolerance approach where presumably people would Know Where They Stand.

So how tough is tough?  Well, that depends.  In Rayyan Al Iraq Co Ltd v Trans Victory Marine Inc, the Claimant’s solicitors served Particulars of Claim two days late.  Their request to the Defendant’s solicitors for an extension of time fell on deaf ears and the Claimant made an application to the Court for relief from sanctions.  The High Court took into account the fact that the slight delay had not affected the administration of justice, and found that the mistake was “regrettable but not egregious”.  The change in regime did not mean that relief should be refused where that would be a disproportionate response and would give the Defendants an unjustified windfall.  Far from taking a stern stance with the Claimant’s solicitors, the judge reportedly described the Defendant’s solicitors’ conduct as “regrettable” in refusing to agree the extension of time once the deadline had been missed.

In contrast, in Venulum Property Investments Ltd v Space Architecture & Others a far stronger message was delivered.  In this case the Claimant applied for permission to extend time for service of the claim, their solicitors having incorrectly calculated the last date for service.  The Court refused, with Mr Justice Ewards-Stuart concluding:  “The claimant has taken quite long enough to bring these proceedings and enough is now enough.”  The claim was statute barred.

Similarly, in the highly publicised case of Mitchell (“Plebgate”) v NGN, the failure by Mr Mitchell’s solicitors to file a costs budget in breach of Court requirements resulted in his recoverable costs being restricted to Court fees only.  Costs for such a case could well reach £500,000.  The Appeal is awaited.

So much for Knowing Where We Stand.  The answer?  Keep a tight diary in place and fail to comply at your peril.