Mitchell MP v News Group Newspapers Ltd (CA)

Reference: [2013] EWCA Civ 1537

Court: Court of Appeal (Civil Division)

Judge: Master of the Rolls, Richards and Elias LJJ

Date of judgment: 27 Nov 2013

Summary: Cost Budgeting - Rules, practice directions and Court Orders - Relief from sanctions - CPR 51D - CPR 3.14 - CPR 3.9

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Instructing Solicitors: Atkins Thomson for C; Simons, Muirhead and Burton for D

Facts

The Claimant Appellant (C) had brought a libel action against the Respondent Defendant (D) on its publication of a report that he had shouted “you’re f…ing plebs” at police officers at the entrance to Downing Street. D pleaded justification and a Reynolds public interest defence in its defence.

The defamation proceedings were governed by the CPR PD51D Defamation Proceedings Costs Management Scheme which provided for the preparation and lodging of costs budgets “not less than 7 days before the date” of the relevant hearing.

The court ordered a case management and costs budget hearing (CMC) on 10 June, notifying the parties five days beforehand. As a result of the late notification, the hearing was relisted for 18 June. C filed his budget during the afternoon of 17 June.

Having referred to a delay in receiving counsel’s figures in email correspondence with the Master the previous day, C submitted at the hearing that the reason for the delay was the pressure of litigation in another case. The Master observed that the C’s failure to produce a budget and engage with the process of cost budgeting was a breach of Practice Direction 51D and of the overriding objective.

In considering the appropriate sanction, the Master referred to the rules in CPR 3.14, which were not then in force. These provided for a mandatory sanction that a failure to file a budget within seven days prior to the date of the hearing meant that a party would be deemed to have filed a budget limited to the court fees. Having regard to the new rules by analogy, the Master imposed this sanction at the 18 June hearing, while ordering that C was entitled to apply for relief from sanctions.

The Master heard the C’s application for relief from sanction on 25 July. In her judgment she noted that, as part of dealing with cases “justly”, the court must now ensure that cases are dealt with at proportionate cost and so as to ensure compliance with rules, orders and practice directions. She identified C’s failures as being the failure to engage in discussion with D on budgets, and as being the failure to file a budget 7 days before the CMC.

In refusing to grant relief, she said that the explanations of C’s solicitors were not unusual and held that there was no evidence of particular prejudice to C arising from her order. She held that the emphasis as a result of the Jackson reforms must be upon a fair share of time for all and strict compliance with rules and orders. Time for C to produce the budget was not unfairly short, and there was a new emphasis on rule compliance.

The Master granted C permission to appeal of her own motion. Permission to appeal was extended to cover the original decision of 18 June as well as the refusal to grant relief from sanction.

Issue

(I)

On the 18 June decision

(1) Should CPR 3.14 have been applied by analogy when it was not in force?

(2) If CPR 3.14 should have been applied, should it have been interpreted as referring to a failure to file a budget within the time prescribed by CPR 3.13 rather than a failure to file a costs budget at all?

(3) Did the decision impose a sanction that was disproportionate and contrary to the overriding objective?

(II)

On the 25 July decision

(1) Following amendment to CPR 3.9, should the court adopt a more “robust” approach to granting relief to defaulting parties from the consequences of their defaults?

(2) In the present case, were criticisms of the Master’s reasoning valid?

(3) Did the decision to refuse relief fail to give effect to the overriding objective?

Held

Dismissing the appeal against both orders

(I)

On the 18 June decision

(1) The Master was entitled to be guided by CPR 3.14 since this represented the view of the CPR Committee as to what was a proportionate sanction for failure to file a costs budget in time.

(2) The Master was correct to construe CPR 3.14 as referring to a failure to file a budget within the time prescribed in CPR 3.13, that is to say seven days. It was important to comply with both the obligations in PD 51D.

(3) The decision was not disproportionate and contrary to the overriding objective. The hearing of 18 June proved to be abortive and C was not in a position to invoke the saving provision in CPR 3.14 (“unless the court otherwise orders”) since his solicitors had not produced evidence which might otherwise persuade the court to adopt that course.

(II)

On the 25 July decision

(1) The changed wording of CPR 3.9 signalled a change of emphasis. The need for litigation to be conducted efficiently and proportionately, and for compliance with rules, practice directions and court orders was now of paramount importance. While regard should be had to all the circumstances of the case, these should be given less weight than these two considerations.

The court gave guidance as to the adopting of the new approach in practice:

(a) where non compliance can be regarded as trivial, the court will usually grant relief provided the application is made promptly;

(b) If the non-compliance cannot be characterised as trivial, then the burden will be on the defaulting party to persuade the court to grant relief. Mere overlooking a deadline is unlikely to be a good reason. Good reasons are likely to arise from circumstances outside the control of the party in default.

(c) the new, more robust approach will mean that relief from sanctions will be granted more sparingly than previously.

(2) While there was some force in criticisms of the Master’s reasoning, they did not go to the heart of it. Her main finding was that the C’s solicitors had been in breach of PD 51D, and that, in the light of the new approach mandated by the Jackson reforms, the case for granting relief from sanctions was not established.

(3) the Master was right to recognise that the emphasis under CPR 3.9 had changed. Although her response could have been different in terms of the sanction imposed, a grant of partial relief from CPR 3.14 will not often be appropriate.

Comment

The Court of Appeal said that it hoped its decision would send out a clear message to ensure efficiency and compliance with rules, practice directions and court orders. The severity of the sanction imposed, which the Court acknowledged “seems harsh in the individual case”, for what may have seemed a relatively minor default, will ensure that it does so.

On a narrow reading, the decision underlines the significance of cost budgeting. However, its wider implications relate to relief from sanctions and the conduct of litigation generally. Although there is still the opportunity to argue that any non compliance is trivial, and should not therefore preclude relief being granted, or that there is a good reason for it, generally a more robust approach to granting relief will be taken. The interests of individual litigants will increasingly give way to the wider public interest in all litigants obtaining efficient and proportionate justice.