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PI and Civil Litigation

Law - practice - procedure

03 DEC 2013

Relief from Sanctions – Court of Appeal Uphold Robust Approach to Case Management

Relief from Sanctions – Court of Appeal Uphold Robust Approach to Case Management

In Andrew Mitchell (M.P) v News Group Newspapers Ltd [2013] EWCA 1537, a high profile defamation case which arose out of the ‘plebgate affair', the Claimant's solicitors filed their costs budget 6 days late and as a result the costs budgeting hearing could not proceed as intended. Master McCloud decided that the appropriate sanction for this breach was to treat the Claimant's solicitors as having filed a budget for the court fees only. As such the Claimant lost his ability to recover over £500,000 of costs, and the Defendant secured a windfall. The decision was supported by the Court of Appeal on the basis that robust case management decisions were needed in order to bring about a culture change in litigation and ensure compliance with court orders and a proportionate allocation of court resources to individual cases.


The claim was subject to the defamation costs management pilot scheme (CPR PD51D), the terms of which were similar to the costs budgeting provisions now in place and applicable to civil litigation generally.

Of particular note are the following requirements:

  • during the preparation of costs budgets the parties should discuss the assumptions and timetable upon which their respective costs budgets are based
  • the parties must exchange and lodge costs budgets in the form precedent HA not less than 7 days before the date of the hearing for which the costs budgets are required

Whilst the pilot scheme did not set out the sanction which flowed from a breach of the practice direction, the similarly worded CPR 3.14 provides that ‘unless the court otherwise orders, any party which fails to file a budget despite being required to do so will be treated as having filed a budget comprising only the applicable court fees.'

The parties were given 11 days notice of the case management and costs budgeting hearing, and as such had two working days notice of the need to file a completed budget. The Claimant failed to comply with the practice direction and filed a budget of £506,425 on the day before the hearing. The explanation given by the Claimant for the failure was (variably) delays on the part of Counsel and the ‘pressure of litigation elsewhere in the firm on another case'.

At the hearing the Defendant maintained that they had had insufficient time to consider the Claimant's costs budget. Argument then ensued as to what sanction should flow from the breach. Master McCloud decided, by analogy to CPR 3.14, that the appropriate sanction was to treat the budget as comprising only the applicable court fees. She then listed the matter for a relief from sanction hearing (apparently having to vacate a half day appointment for the case management of a piece of industrial disease litigation in order to do so).

During the relief from sanction hearing the Master was required to consider the new CPR 3.9 which provides:

‘on application for relief from any sanction imposed for a failure to comply with any rule practice direction or court order the court will consider all the circumstances of the case so as to enable it to deal justly with the application including the need (a) for litigation to be conducted efficiently and at proportionate cost and (b) to enforce compliance with rules, practice direction and court orders'

Having considered CPR 3.9 and the new overriding objective the Master refused to grant relief.

The Court of Appeal Decision

The Court of Appeal concluded that the Master was entitled impose the sanction she did.

  • Whilst this case fell within the defamation pilot scheme, the Master was entitled to be guided by the new CPR 3.14 since this represented the considered view of the Civil Procedure Rule Committee as to what constituted a proportionate sanction where a party failed to file a costs budget in time.
  • It was not accepted that CPR 3.14 applied only where there was non-service of a costs budget rather than late service of a costs budget - it was felt that the mischief the rule was aimed at, was the late filing of costs budgets.
  • The changes to the overriding objective and CPR 3.9 were intended to signify a change of balance. Whilst the new section 3.9 continued to require a consideration of ‘all the circumstances', more weight should be given to the two factors specifically mentioned in rule 3.9 which relate to enforcing compliance with court orders and conducting cases efficiently.
  • Neither the Woolf or Jackson reforms were intended to render the overriding objective or rule 3.9 subject to an overarching objective to secure justice in an individual case. Otherwise a tougher approach to compliance would be difficult to apply.
  • The more robust approach was intended serve the public interest by doing justice in the majority of cases which required other litigants to be able to obtain justice efficiently and proportionately. As such parties could not expect an indulgence if they failed to comply with a procedural obligation.

The Court of Appeal also offered more generic guidance as to how the courts should now approach relief from sanction applications. The first matter to consider was whether the breach was trivial. If it was trivial (eg the narrow missing of a deadline or a failure to comply with form rather than substance) relief should usually be granted. Otherwise it was for the defaulting party to persuade the court to grant relief, and in order to do so a good reason for the failure would usually need to be demonstrated. Good reasons were usually factors outside the parties' control (such as illness). Pressure of work and oversight were not good reasons.

Thus, the sanction set out in CPR 3.14 would usually apply unless (i) the breach was trivial or (ii) there was a good reason for the breach. Unless (i) or (ii) was satisfied the need to conduct litigation efficiently and at proportionate cost, and the need to enforce compliance with rules, practice directions and court orders would usually trump the other circumstances which the court is obliged to consider in accordance with CPR 3.9.

The Court implicitly criticised the approach in Ian Wyche v Careforce Group Plc 2013 EWHC 3282 (non compliance with an unless order) and Raayan Al Iraq Co Ltd v Trans Victory Marine Ltd Inc [2013] EWHC 2696 (an extension where C was 2 days late in serving the particulars of claim.)

It was acknowledged that whilst it would have been open to the Master to grant partial relief from sanction (eg to have allowed 50% of costs) this was not mandatory and if partial relief were encouraged it would give rise to uncertainty and satellite litigation.


This represents a robust case management decision and emphasises the importance of complying with rules, practice directions and court orders. It is clear that the risk of injustice to an individual claimant does not ‘trump' the need to have a system which promotes compliance and thus minimises the use of court resources.

It is of note, however, that in the Mitchell case the Claimant's solicitors did not apply for an extension of time when they ran into difficulties and did not place evidence before the court as to how Mr Mitchell would be prejudiced by the sanction. It is not clear whether these factors would have altered the Master's decision.

It remains to be seen whether sanctions which by their nature result in prejudice to one party and a windfall to the other, will alleviate the pressures on the court system, or generate unexpected spin off costs, eg by virtue of there being a reduced incentive for the Defendant to settle, a potential difficulty in the affected party continuing to secure representation, an increase in professional negligence claims or an increase in solicitor indemnity premiums which are then passed back into the cost of litigation. Furthermore, the prospect of securing a windfall may act as a disincentive for parties to agree to waive procedural breaches and litigators may become excessively anxious about procedural compliance and trouble the court with matters which could legitimately be dealt with by consent.

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