There will be few, if any, members of the legal profession unaware of the recent decision given by the Court of Appeal in the matter of Andrew Mitchell MP v News Group Newspapers Limited  EWCA Civ 1526.
The decision has been reviewed, discussed, commented upon and by one well known commentator of all things legal described as “a grim day for justice”. For those just back from an extended trip to some far flung place where access to the internet is impossible or Dunmow in Essex, a recap:
Mr Mitchell MP, he of the infamous “Plebgate” saga instructed solicitors to take proceedings against the “Sun” newspaper following its report of the alleged incident involving the police.
The case was governed by the pilot costs management scheme for defamation cases (CPR PD51D) which included a provision for the parties to discuss the issue of costs and provide budgets.
The Defendant in advance of the first CMC as required, though a day late, filed a budget, the Claimant served a budget only shortly before the CMC after some prompting by Master McCloud.
The Defendant’s solicitor at the CMC submitted to the Master that there had been insufficient time to consider the Claimant’s budget, the Master found there had been no “adequate excuse” for the breach and referred to the Claimant’s solicitor’s “absolute failure” to engage in discussion of budget assumptions and to the fact that they made “no attempt to apply for extra time” and ordered that the Claimant be treated as having filed a budget for applicable court fees only.
The Claimant’s solicitors applied immediately to the Master for relief from sanction referring to the fact that they were a small firm, that two of their trainee solicitors were absent on maternity leave and that the firm was heavily engaged on other heavy litigation and as a result the solicitor’s were “stretched very thin in terms of resources”
The Master refused leave finding that the reasons advanced were not unusual and carried even less weight post-Jackson than they had before.
The appeals against the decisions to limit the budget and refusal to grant relief were fast tracked to the Court of Appeal.
The COA decided the question at the heart of the appeal was how strictly should the courts enforce compliance with rules, practice directions and court orders?
The answer was very strictly indeed.
True to previous cases which suggested Judges in the Courts below could expect to be supported by the Higher Court, both appeals were dismissed.
The Claimant’s budget was £506,425.00 and aside for an allowance for the Court fees the Claimant can not recover costs against the Defendant whose own Budget was £589,558.00.
Mr Mitchell will not be out of pocket as he will no doubt claim against his solicitors who will in turn look to their insurers however whoever runs the case from this point forward must surely be at a significant disadvantage; the Defendant knows it will never be liable for costs and can afford the defend the case to trial and no doubt those insuring Mr Mitchell’s solicitors will be more interested in “lets make a deal” given damages in defamation claims are usually modest and the question must be will the insurers have the stomach for a battle to achieve an apology from the Sun?
The Master at first instance admitted that the sanction was “something of a windfall” for the Defendant but “that is the way with sanctions”.
Just what was the Claimant’s crime in this matter? The budget was served 6 days late. Rather than order the Claimant to be responsible for the costs of and thrown away by the wasted CMC (one assumes agreement could have been reached with regard to directions for the running of the case so not a complete waste) the harshest possible sanction was imposed for failure to comply with a direction of the court.
Interestingly the Court of Appeal gives important guidance as to how the “new” approach to relief applications should apply in the future (see paragraphs 40 – 43) including “It will usually be appropriate to start by considering the nature of non-compliance with the relevant rule, practice direction or court order. If this can properly be regarded as trivial, the court will usually grant relief provided that an application is made promptly”; “a failure of form rather than substance; or where the party has narrowly missed the deadline imposed by the order, but has otherwise fully complied with its terms.”
The Claimant’s solicitors’ may consider themselves hard done by given that they missed the deadline by a matter of days and applied for relief promptly!
The Court of Appeal did offer some crumb of comfort by suggesting that an application for extension of time made before time has expired “will be looked upon more favourably than applications for relief from sanction after the event” though this appears to contradict the new hard line approach with which the Court of Appeal found favour!
The Court of Appeal also criticised judges for not following the “new” approach referring to Walker J’s decision in Wyche v Careforce Group PlC  EWHC 3282 wherein Defendant had failed to comply in all respects with an “unless” order however the Judge found the failures to be “unintentional and minor failings”
Also receiving a judicial slap on the wrist was Andrew Smith J who in the matter Raayan Al Iraq Co Ltd v Trans Victory Marine Inc  EWHC 2696 (Comm) when faced with an application for relief to file Particulars of Claim two days late granted relief stating that the “overriding objective demands that relief be granted and I grant it”.
A matter of days (01/11/13) after Mitchell, Mr Justice Norris in the matter of Mark Forstater and Python (Monty) Pictures  EWHC 3759 (Ch) gave consideration to an application for relief from sanction arising from failure to provide Notice of Funding (N251).
At paragraph 42 Norris J states there was “no good explanation for the failure to give notice…” “It was a simple oversight”
Relief from sanction was however granted (see paragraph 47).
Norris J went on to add (paragraph 63) “After I circulated this judgment in draft the Court of Appeal handed down its judgment in Mitchell v News Group. I have considered its terms but do not wish to revise my judgment which I consider proceeds upon correct principles”.
Given the identity of the Defendant in this case it is impossible to resist adding a final comment that perhaps justice is not dead it’s simply “resting”!
Gary Knight, Partner and Costs Lawyer