Relief under Denton and criticism of the defendants’ opportunistic conduct

Back tracking from the position in Mitchell gathers pace as the trivial test is removed with something more substantive.  This was the case in Long v Value Properties and Ocean Trade [2014] EWHC 2981 (Ch) where Barling J allowed an appeal against the imposition of sanctions.  In doing so, he held that as well as granting relief from sanctions under the test to be applied in Denton, he would also have granted such relief under the guidelines in Mitchell.

In this case the claimant had commenced detailed assessment proceedings but had not provided the other information required under CPR PD 47, para 32.7 at the time of commencement.  The difficulty for practitioners, as identified in the appeal, is that no time limit is set out in the practice direction as to when such additional  information should be provided. In this case, where the claimant had entered into CFAs with both their solicitors and counsel, the other information required was a statement of reasons for the percentage increase or a copy of the risk assessment prepared.  Rather than simply asking for the information, the defendants submitted their points of dispute and, at the same time, alleged non-compliance by the claimant with CPR PD 47, para 32.7 due to the fact the additional information had not been provided. In this blog, I consider two of the issues in this case which are of interest to practitioners. Other issues on were also considered by Barling J as to the construction of CPR provisions dealing with sanctions to be imposed.

To grant, or not to grant, relief

If serving the further information after the date of commencement of the detailed assessment proceedings constituted a breach of the rules, should such a breach be considered to be ‘trivial’ such that relief from sanctions should be granted under CPR 3.9.  This was the issues before the court when first determine as the principles in Mitchell applied, Denton having yet to be decided.

Now, for the purpose of the appeal, Barling J looked not only at the position under Mitchell but also that under Denton, and, in doing so, ended up with the same result.

Since the Court of Appeal decision in Denton, a court is required to apply a three stage test to determine whether to exercise its discretion to provide relief from sanctions. The first stage is to determine whether the breach was 'serious' or 'significant'.*

Gone therefore is the benchmark of 'triviality'.  If the breach was neither serious nor significant, relief should be granted.

In this case, the issue was whether a delay of three weeks in the provision of information, when taking into account the tight timetable for detailed assessment, was serious or significant. Barling J took the view that the breach could not be considered in isolation but rather that it had to be considered in the context of the surrounding circumstances:

  • the claimant had commenced the detailed assessment early rather than at the end of the three month period imposed by the CPR
  • on becoming made aware of the breach, the claimant's solicitors swiftly remedied the issue
  • the relief from sanctions was brought promptly following a failure to get agreement from the defendants to extend time for service of the Further Information
  • the defendants had added to the length of the default time by seeking, and obtaining, extensions of time to serve their points of dispute
  • the defendants were aware, due to service of the Form N 251, that the claimant had been funded by CFAs and so could have limited the default by requesting the Further Information prior to preparing its response. Had they done so it was clear the claimant's solicitors would have provided it and the need for amendment of the points of disputes would have been avoided
  • there was no significant prejudice to the defendants, to the efficient conduct of the proceedings at a proportionate costs or the efficient conduct of the proceedings

Having regard to these points, Barling J regarded the breach as insignificant and therefore trivial applying the guidance under Mitchell, the authority in place at the time of the first instance decision. He also concluded that the breach was neither serious nor significant applying the test in Denton, as was applicable to the appeal before him. While the SCCO judge's instinct was to consider the breach to be trivial, Barling J identified that he had erred by finding this was not the case because he had failed to give significant weight to the circumstances surrounding the breach or the lack of significant prejudice to any of the parties.

Barling J also considered that the SCCO judge had erred by concluding that as the breach was not trivial and there was no good reason for it, relief from sanctions was not available; an error identified by the majority in the Court of Appeal decision in Denton. What he should have done was to consider whether not giving relief was appropriate taking into account 'all the circumstances of the case, so as to enable [the court] to deal justly with the application'.

Opportunistic and non co-operative conduct

Barling J also addressed the issue of opportunistic and non co-operative conduct by the defendants at para [70] where he said 'It is evident that in so far as there has been unnecessary cost, delay and use of the court's finite resources in hearing the application for relief from sanctions and this appeal, this is the result of what in my view was the unreasonable, opportunistic and non-cooperative approach of the defendants to the claimant's unfortunate oversight.'

Barling J considered that this a clear example of defendants seeking to take advantage of minor breaches under the CPR.  This type of conduct proliferated following the Court of Appeal decision in Mitchell and was expressly ‘condemned’ by the Court of Appeal in Denton.  There, the Court of Appeal emphasised its distaste at the opportunism which had grown up. It considered that such opportunism should be more readily penalised by the courts moving forward.

The key for practitioners, faced with a breach of the CPR by the other side, is to have regard to the overriding objective under the CPR which includes co-operation between the parties to progress the matter. Had the defendants approached the matter sensibly, Barling J considered that the matter could have been completely resolved very quickly instead of it being subject to a court hearing and further appeal which both resulted in significantly delaying the resolution of the detailed assessment proceedings. Practitioners must remember that they have a duty to the court when considering what steps to advise their clients to take and refusing to agree extensions of time or unreasonably opposing relief from sanctions applications should result in heavy costs sanctions being imposed.

*Subscribers to LexisPSL DR can obtain detailed information on this test, see Practice Note: Relief from sanctions - the courts' approach.

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