Relief from Sanctions: What is trivial?

Relief from Sanctions: What is trivial?

One important aspect of the Jackson reforms has been the judiciaries increased emphasis on compliance with civil procedure rules, orders, proportionality and the robust perceived approach when considering applications for relief from sanctions under CPR 3.9.

General cost budgeting experiences

Our experience has taught us that the judiciary are, above all else, prioritising proportionality and are scrutinising cost budgets, even when they are mutually agreed between both parties. Judges have actually been more likely to stress test a mutually agreed budget to ensure proportionality.

The judiciary are also making good use of contingency mechanisms in deferring a decision on expert evidence until a later case management conference. And are also becoming more proactively involved, for example one recent case had progressed to Trial, but before it began, the Judge called both Counsel into Chambers to investigate whether a settlement could be achieved and stressed the need for proportionality.

Although it seems our own individual experiences may appear to be more stringent, the judicial guidance is demonstrating a relaxed approach were reasonableness rather than robustness prevails. Not only is this reassuring but it also welcomes some consistency.

Recent case law

For example, within Burt v Linford Christie (Birmingham District Registry) 10 February 2014 and Porbanderwalla v Daybridge Ltd (Birmingham County Court) 30 January 2014 the court had issued a pre-allocation notice stating that the parties must complete the Directions Questionnaire and file directions. There was no express reference to file and exchange cost budgets. It was held that in absence of a requirement to file and exchange cost budgets the requirement was not triggered and the parties were not in breach.

The above has provided further guidance following Mitchell v News Group Newspapers Limited [2013] EWCA Civ 1537 by suggesting that a genuine ambiguity of the rules ought to be resolved in favour of the defaulter, but equally stressed that if a deadline is clear, getting it wrong and leaving matters to the last minute are unlikely to attract court sympathy.

Reasonableness was also demonstrated within Lotus Cars Ltd v Mecanica Solutions Inc [2014] EWHC 76 (QB) were a composite costs budget was filed in time, but two claims were subsequently settled, and a single budget for the surviving case was filed after the deadline. It was held that since the two of the matters had settled, the claimant could not be criticised for filing a revised budget in relation to the sole surviving action. This was therefore trivial in accordance with Mitchell.

This reasonable approach is again reiterated within The Bank of Ireland and another v Philip Pank Partnership [2014] EWHC 284 (TCC) were it was considered whether service of a costs budget without adding a full statement of truth amounted to a failure to file and exchange the budget. Stuart-Smith J held that failure to incorporate a full statement of truth wording specified in PD22.2.2A will not constitute failure to file and exchange costs budgets as required by CPR 3.13.

These recent cases demonstrate that the court may grant relief if a breach is trivial and where there has been failure of form rather than substance. This approach is further confirmed in Lakatamia Shipping Co Ltd v. Nobu Su and others [2014] EWHC 275 (Comm) where a Defendant missed a deadline to file disclosure by 46 minutes, mistakenly believing the deadline to be 5pm rather than 4.30pm. Despite still failing to adhere to the 5pm deadline the Court granted relief, confirming the breach to be “no more than an insignificant failure to comply”. Hamblen J held that “compelling circumstances” were required to prevent relief being granted for a trivial breach.

As a result it would seem that we should welcome this consistent and reasonable approach. However it should not be taken for granted as it is unlikely the Courts will grant relief for trivial breaches readily. Equally we must pick and choose our battles if there is a trivial breach to consider proportionality.

Judith Rountree is a solicitor at Gardner Leader LLP, specialising in dispute resolution.

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