Sanction: A Relief?

Penalties for procedural errors in litigation can impact a litigating party’s position significantly, and it is for this reason that parties may wish to apply for relief from sanctions.

The Jackson reforms introduced rule 3.9 of the Civil Procedure Rules to enforce compliance with rules, practice directions and court orders.

This rule states that on an application for relief from sanctions, the court will:

• consider all of the circumstances of the case so as to enable it to deal justly with the application;
• consider the need to conduct litigation efficiently and at proportionate cost; and
• enforce compliance with rules, practice directions and court orders.

The previous leading case

The case of Mitchell v News Group Newspapers Ltd [2003] EWCA Civ 1537 was previously the leading authority on the interpretation of the new rule 3.9.  In that case, the application for relief concerned the late filing of a costs budget.  The sanction imposed was that the budget set for future costs was set at the court fees only.  The Court of Appeal set guidelines that relief would only be granted in limited circumstances for trivial breaches where applications for relief are made promptly and where there are good reasons for the default.

Following the case of Mitchell, there has been a notable increase in satellite litigation to consider whether breaches are trivial and if relief from sanction should be granted.

The Court of Appeal heard three relief against sanction appeals and invited intervention from the Law Society and the Bar Council in the cases of Denton v White and other appeals [2014] EWCA Civ 906.  The Mitchell guidelines were criticised as having resulted in disproportionate penalties imposed on some parties unfairly benefiting other parties, where breaches do not have much practical effect on the litigation.

New three stage test

The Court of Appeal has helpfully clarified the relief against sanction guidelines, introducing a three stage test offering greater flexibility and discretion:

Stage 1:  Identify and assess the seriousness of the non-compliance. Is the breach serious or significant.

Stage 2: If it is, why did the default occur.

Stage 3:  Consider all the circumstances of the case in order to deal with the application “justly” including;

(a) the need for litigation to be concluded efficiently and at proportionate cost; and

(b) the need to enforce compliance with rules, directions and practice directions.

The Court of Appeal also stated that parties should co-operate and refrain from attempting to benefit from the mistakes of their opponent.  However, this may mean that parties will be reluctant to take issue with breaches, resulting in greater non-compliance.

For more information, help or advice on this issue please contact Imran Malik on 0191 211 7880.