The times they are a-changin’

The times they are a-changin’

Non-compliant litigators will get short shrift, say Ed Lewis & Jennie Gillies.

If one asked any lawyer practising in England and Wales whether parties to litigation were required to comply with the Civil Procedural Rules (CPR), the answer would be an emphatic “yes”; after all, the CPR derive from statutory instrument (the CPR 1998 SI 1998 No. 3132) and the various additional statutory instruments which have been enacted since.

Furthermore, the need for parties to comply with rules, practice directions and orders is not a new concept. It has always been at the core of the CPR (and those which they replaced) and such compliance is a fundamental part of the interests of the administration of justice as reiterated by Arden LJ in Stolzenberg v CIBC Mellon Trust Co Limited [2004] EWCA Civ 827, [2004] All ER (D) 363 (Jun): “Compliance with orders of the court is not a question of judicial amour propre. It goes to the essence of the rule of law that parties subject to the court’s jurisdiction…should comply with the court’s orders.”

By some parties, however, procedural requirements have been marked all too frequently by breach than by compliance. Indeed, this problem—and the resultant increases in costs caused by non-compliance—was brought into focus in Lord Justice Jackson’s final report on the costs of civil litigation where it was noted that “courts at all levels have become too tolerant of delays and non-compliance with orders. In so doing they have lost sight of the damage which the culture of delay and non-compliance is inflicting on the civil justice system. The balance therefore needs to be redressed” (para 6.5).

It is in this context that, along with the multifarious changes on costs arrangements introduced through the 60th and 61st updates to the CPR, a new mantra can now be found woven into the fabric of the CPR. Finding its origin in the amendments effected to the definition of the overriding objective, judges, representatives and parties are now reminded that dealing with a case justly and at proportionate cost includes “enforcing compliance with rules, practice directions and orders”.

In circumstances where, however, the parties have always been under an obligation to comply with rules, practice directions and orders, can the addition of these eight words in CPR 1.1(2)(f) really make that much difference?

Warning bells

The first warning that the courts would grasp the nettle and redress the balance was provided before 1 April 2013. In Fred Perry v Brands Plaza Trading [2012] EWCA Civ 224; [2012] All ER (D) 77 (Jun), a three-man Court of Appeal was asked in February 2012 to consider whether the appellant (which had been the defendant at first instance) was entitled to relief from sanctions owing to a judge’s original decision to strike out its defence.

The defendant had a history of substantial and serial non-compliance with court orders, including breach of an ‘unless order’ which triggered the decision to strike out the claim. Setting down a marker for the future, Lord Justice Lewison gave judgment dismissing the appeal against strike out and cited para 6.5 of the Jackson’s final report with approval.

Unsurprisingly, his fellow Court of Appeal judge, Jackson LJ, concurred. However, he went further, advising that future amendments were envisaged to CPR r 3.9 and warning practitioners: “Non-compliance with the CPR and orders of the court on the scale that has occurred in this case cannot possibly be tolerated. Any further grant of indulgence to the defendants in this case would be a denial of justice to the claimants and a denial of justice to other litigants whose cases await resolution by the court…There is a concern that relief against sanctions is being granted too readily at the present time. Such a culture of delay and non-compliance is injurious to the civil justice system and to litigants generally…It is currently anticipated that this revised rule will come into force on 1 April 2013. After that date litigants who substantially disregard court orders or the requirements of the CPR will receive significantly less indulgence than hitherto”.

Early indications suggest that since 1 April 2013 the sea change has been recognised by judges, particularly those sitting in the High Court which will naturally lead to other judges following suit.

Venulum v Space Architecture

On 22 May 2013, Edwards-Stuart J, sitting in the Technology and Construction Court, heard an application for permission to serve particulars of claim out of time in Venulum Property Investments Ltd v Space Architecture & Others[2013] EWHC 1242 (TCC); [2013] All ER (D) 276 (May).

Venulum, the claimant, was a property developer, which had purchased land with planning permission for a residential development in 2007. The scheme as reflected in those plans proved impossible to build, owing to structural errors in the design. Despite knowing that there was a problem with the design, Venulum delayed seeking legal advice until five years after any cause of action had accrued. Furthermore, it was a further eight months later, in November 2012, and shortly before expiry of limitation, that Venulum issued proceedings against 11 separate defendants including the vendor, project architects and estate agents, Millers, who had marketed the plot. Despite issuing a protective claim form, Venulum (through its solicitors) failed to serve particulars of claim within the prescribed four-month period thereafter, owing to a mis-reading of CPR 7.4(2) and 7.5(1) by its legal representatives.

Given this irregularity, Venulum was forced to apply to the court for permission to extend time for service. Most of the defendants consented to the application; but two defendants (Millers and their principal, Richard Miller, referred to collectively by the judge as “the Miller defendants”) resisted the application.

Edwards-Stuart J refused to grant Venulum permission to serve out of time. This was a significant decision; it put an end to Venulum’s claim against the Millers defendants because the action was time-barred.

First, the judge agreed with the Millers defendants’ submission that the application was not concerned with whether Venulum should be granted relief from sanctions but was rather concerned with whether the court should exercise its discretion to extend time for compliance in accordance with CPR 3.1(2)(a). Given the timing of the application (made before 1 April 2013) the amendments to CPR 3.9 were not effective and the Miller defendants therefore submitted that the emphasis had shifted as a result of the amendments to the CPR, so that the court is now required to take a much stronger and less tolerant approach to failures to comply with matters such as time limits.

Second, of central importance to the judge’s reasoning was that, subsequent to amendments implemented in April 2013, the court was expressly required, when attempting to deal with a case justly, to consider the need to enforce compliance with rules, practice directions and orders (in accordance with the overriding objective and CPR 1.1(2)(f)). He was influenced by three factors:

  • Venulum’s delay in progressing the claim;
  • the vague terms in which the claim was advanced; and
  • the claim’s poor prospects of success by contrast with the theoretically stronger claims against the other defendants.

The judge noted: “It is not satisfactory or in the interests of justice to have claims brought in the closing weeks or months of a long limitation period. Delay is bad for justice…the court should adopt a stricter approach where a claimant has, seemingly through its own choosing, left the start of proceedings until the last minute.”

Despite the error in service having been made by Venulum’s solicitors, in light of its own delay it was tarred by that error—particularly because of its failure to explain its own delay.

New attitude?

So does this case herald a tough, new no-nonsense attitude? The answer seems likely to be an emphatic “yes”. Henderson J, in Atrium Training Services Ltd v Connor Williams Ltd [2013] EWHC 1562 (Ch), [2013] All ER (D) 105 (Jun), commenting on Venulum, noted that it “does provide an illustration of the increasingly strict approach of the court to cases of non-compliance with time limits”.

The amendment to the overriding objective, in particular, is likely to be far-reaching and ubiquitous. Addressing the district judge’s annual seminar on 22 March 2013, the Master of the Rolls (Lord Dyson MR) referred to a “Mark II overriding objective” revised “to emphasise: (i) the centrality of dealing with cases at proportionate cost and (ii) the fact that the overriding objective requires the court to place greater weight than it might have done previously on enforcing compliance”.

At pains to stress that the amendments are intended to be wholly consistent with the overriding objective as originally framed in the Woolf reforms, Lord Dyson MR cited existing guidance by Lord Phillips MR in Flaxman-Binns v Lincolnshire County Court (Practice Note) [2004] EWCA Civ 424; [2004] All ER (D) 88 (Apr), that judges might well be faced with the question “Whether the overriding objective of dealing with this case justly calls for us to bring these proceedings to an end?”. The amendments to the overriding objective now make it clear that judges should feel confident if they deem it necessary to do so.

“The CPR…serve[s] to provide a just framework. That framework is intended to ensure that all litigants have fair access to the courts and a fair opportunity to proceed to judgment…

“Flexibility and discretion within that framework are always necessary…Such flexibility must however be applied so as to achieve two things. These are (i) to ensure that parties do not expend more than proportionate costs in conducting their own litigation and (ii) to ensure that parties do not expend more of the court’s time and resources than is proportionate given the need to ensure that all other court-users can have fair access to the courts within a reasonable time.

“This may mean that in some cases parties will have to be denied the opportunity to adduce certain evidence if they have failed to exchange in accordance with case management directions…. In others, it may mean that a claim that could otherwise continue to trial might have to come to a premature end due, for instance, to a failure to comply with an ‘unless order’”[paras 11–13 Address to district judges’ annual seminar].

Conclusion

We are operating in the context of a much altered litigation landscape and a renewed focus on efficient and proportionate litigation is paramount. Practitioners cannot afford to enter litigation unprepared. It is also now clear that the courts will keep a close eye on compliance with rules, practice directions and orders and the overriding objective (sometimes thought previously to be a nebulous concept) suddenly has real teeth. All litigators beware, in the words of Bob Dylan, the times they are a-changin’…

Ed Lewis is head of construction risk at Weightmans LLP & Jennie Gillies is a barrister at  4 Pump Court . This article was first published in the New Law Journal on 12 July 2013.

Subscription Form

Related Articles:
Latest Articles:

Already a subscriber? Login
RELX (UK) Limited, trading as LexisNexis, and our LexisNexis Legal & Professional group companies will contact you to confirm your email address. You can manage your communication preferences via our Preference Centre. You can learn more about how we handle your personal data and your rights by reviewing our  Privacy Policy.

Access this article and thousands of others like it free by subscribing to our blog.

Read full article

Already a subscriber? Login