Following a winter of discontent the decision of the Court of Appeal in the matter of Denton brought a sunnier outlook, if not glorious summer, for under fire Solicitors with green shoots of common sense springing up almost every where.
Denton is dealt with elsewhere in detail and I therefore consider a small selection of “post” Denton decisions that provide encouragement that the strict application of Mitchell is, if not forgotten for ever, no longer the requirement for a draconian approach in applications for relief to be adopted.
Kenneth and Paul Hart –v- Susan and Brian Burridge  EWCA Civ 992 – Court of Appeal- LJ Richards, LJ Black and LJ Voss – 22/07/2014
An appeal had been brought against the decision of a judge who, when dealing with claims brought by various beneficiaries under a deceased’s will, held that Mrs Burridge had been guilty of presumed undue influence over her mother (the deceased) relating to the sale of properties and found the Defendants liable with the husband having been found to have “shared equally” in the benefits which resulted from the undue influence.
All Claimants applied to set aside the grant of permission to appeal on the grounds that the Appellants’ Notices were filed 6 weeks late.
The Court of Appeal identified 7 grounds of appeal and was required to give consideration to the issue “Should the grant of permission to appeal be set aside?”
The Claimants’ application to set aside had been heard by Lewison LJ who declined to set aside the permission to appeal and had adjourned the question of the extension time to the full appeal. The Claimants’ had argued that an extension of time ought not to have been granted because of the dicta of Brooke LJ at paragraph 21 in Sayers v. Clarke which required the court to have regard to the criteria for the grant of relief from sanctions under CPR Part 3.9 when considering such an extension.
In his judgment LJ Richards referred to Denton stating that “it can no longer be right to say that the court should have regard to the lengthy list of factors in the old CPR Part 3.9(1) when considering whether to grant permission to extend time for the filing of the Appellants’ Notice. The Lord Justice did, however, consider that it would be “inappropriate to comment in the absence of full argument, on whether that the new approach to applications for relief from sanctions set out in Denton is properly to be regard as relevant to an application for an extension of time in these circumstances”. The Lord Justice acknowledged that the court in Denton “sought to discourage satellite litigation of all kinds and to encourage parties to agree to reasonable requests for extensions under the new CPR Part 3.8(4)”.
It was found that there were no grounds to set aside the extension of time granted.
Leeds City Council –v- HMRC –  UKUT 0350 (TCC) – Upper Tribunal Tax and Chancery Chamber – Judge Colin Bishopp – 29/07/14
Following the finding that the HMRC had been correct in rejecting Leeds City Council’s claim for repayment of various amounts of VAT, HMRC applied for a costs direction out of time by six calendar or four working days, the application was not, as required, accompanied by a schedule of costs.
Recognising its delay HMRC added an application for extension of time and a direction that the requirement to provide a schedule of costs be dispensed with.
The Council objected citing Mitchell and Durrant amongst other cases when focusing on the lateness of the application.
The Judge, when mentioning the cases cited commented “More important than all of them, however, is the recent judgment of the Court of Appeal in Denton” he then went on to recite a large section of the decision made in Denton.
Referring to the short delay, explained by HMRC as an oversight, the Judge stated that pre-Mitchell he would have allowed an extension of time adding “I am satisfied, following Denton, that the opposition to short extensions when a mistake has been made and there being no real prejudice beyond the loss of a windfall gain is not within the spirit of the overriding objective of r2 of the Upper Tribunal rules, and should be the exception rather than the norm”. The Judge went on to acknowledge that time limits are there “to be complied with” but that “mistakes do occur”
Tim Yeo MP –v- Times Newspapers limited –  EWHC 2853 (QB) – QBD – Mr Justice Warby – 20/08/14
Within defamation proceedings a number of issues came before the court including the Claimant’s application for relief from sanctions in respect of a failure to serve notice of funding (N251).
The (very) lengthy judgment relates to the main issues before the judge with the last two pages reserved for the relief application.
The application was supported by a statement wherein the solicitor submitted that the opponent had been notified of the funding position and insurance policy by a letter dated 13 December 2013 however due to an oversight the N251 was neither filed nor served as his assistant solicitor had misread the CPR and mistakenly thought that the letter represented compliance.
Whilst the application was not opposed the Claimant accepted that it was still necessary to demonstrate that this was an appropriate case for relief from sanctions.
Consideration was given to Denton and to the stages to be identified before the judge accepted the Claimant’s submission that the breach was not “a serious or practically significant one” there had been an “error” which was not a “deliberate decision” and was one where the error was promptly rectified once noticed sand that relief was appropriate.
The judge was “fortified” in his conclusion by Forstater v Python (Monty) Pictures
Ultimate Products Ltd and another –v- Nigel Woolley and another –  EWHC 2706 (ch) – Ch D – Christopher Plymont QC – 31/07/2014
Proceedings had been issued by The Claimants (W) for passing off and trade mark infringement.
W had entered into a CFA with solicitors who in turn entered into a CFA with Counsel. Notice of Funding was provided however the CFAs were superseded in the run up to trial with new CFAs entered into. The later agreements included provision for a higher success fee; no notice of the new CFAs was provided by N251. The trade mark proceedings were stayed however the passing off issues proceeded to trial with judgment entered in W’s favour.
The Defendant argued that W was not entitled to recover any success fees as a result of the failure to provide the N251 form in respect of the later CFAs.
W was granted full relief from sanction on application which allowed them to recover, in principle, any additional liabilities in respect of the later CFAs.
The Defendant appealed however it was held that there had been no error in the granting of relief by the master as the failure to notify the Defendants as to the new agreements which contained higher success fees was neither “serious nor significant” the breach did not “imperil future hearing dates or otherwise disrupt the conduct of the litigation or of litigation generally”; it was noted that the Defendants did not contend that it made any difference to their conduct of the case and that the Defendants were aware that the Claimants were acting under CFAs and that success fees would be payable if the Claimants’ succeeded; even had notice been given there was no requirement to advise as to the level of success fee to be sought.
Again consideration was given to Denton described as being the correct approach to applications for relief against sanctions under CPR 3.9 has “authoritatively stated by the Court of Appeal”.
With summer now coming to an end the profession perhaps looks forward to a more temperate climate as we head towards autumn and winter in so far as relief from sanctions applications are concerned. However dark storm clouds gather in the shape of the yet to be considered “new approach” to proportionality and, of more concern, in light of the comments of Lord Neuberger when considering the proposition advanced that the pre-Jackson regime of recoverable success fees and the ATE insurance may breach the European Convention on Human Rights in Coventry v Lawrence No 2  UKSC 46.
Wrap up warm all, there’s a storm brewing on the horizon.
Gary Knight, Partner and Costs Lawyer