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We have written previously about the Court of Appeal’s hugely important costs budgeting decision in Mitchell. Here, David Greene, senior partner at Edwin Coe LLP, analyses the significance and impact of this decision.
'Pour encourager les autres' seems to be flavour of the day for the Bench. This phrase was recently used by Briggs LJ in PGF II SA v OMFS Co I Ltd when rigorously penalising a party that had not responded to an invitation to mediate. Perhaps street talk might phrase it as 'tough love'. The Master of the Rolls might have adopted either phrase in his judgment in Mitchell v News International, but even though he did not do so, the message was loud and clear: comply with the timetable set by the court or face potentially harsh consequences. Whilst undoubtedly it sends a shiver down the back of practitioners, what are we to make of it? The prioritising of procedure over justice or the proper application of the judicial process to ensure wider justice to the community in the use of publicly funded resources?
The facts of Mitchell are well known—the Plebgate affair. Whether or not Mr Mitchell called the police 'plebs' is now mired deep in allegation and counter-allegation, but that subject was far from the subject matter in front of the Court of Appeal. For the court, the spotlight of allegation was shone not on Mr Mitchell or the police, but on Mr Mitchell’s solicitors. They were accused of failing in their duty to the court to comply with specific directions for the filing of budgets under the defamation costs pilot scheme. The result was that the court at first instance applied by analogy the new CPR 3.14 and determined that Mr Mitchell and his solicitors could recover in the event of success just the court fees and no other costs and disbursements. The majority of practitioners undoubtedly said 'Ouch!' whilst quietly breathing 'There but for the Grace of God go I'.
Mitchell appealed and leapfrogged to the Court of Appeal. We all sat back to see where the court would go, as the court had various choices. Many expected the same approach as the Court of Appeal had in Henry, ie a slapped wrist, CPR 3.14 does not apply but if it did you would be in serious trouble, so 'watch it' in the future. Others looked to Singapore for the likely outcome, where some time ago, the courts started imposing time limits very strictly, resulting in much blood on the carpet but, say the judiciary, a major change in litigation attitude.
There was much judicial politics wrapped up in the appeal. Many judges at the lower level were saying that if the Court of Appeal allowed the appeal, all their hard work in pumping the message of compliance with time directions would be undone. The Jackson Reports into civil justice initially suggested a draconian approach to the imposition of time discipline along Singaporean lines but the final report backed off a little and, to many practitioners, took a more sensitive and sensible line. Despite that, Jackson still saw the court taking a much more directive approach. Again, would the Court of Appeal take a similar line?
From a practising lawyer’s point of view, there was much in the logistical operation of the litigation process wrapped up in the appeal and consequent decision. If the Court of Appeal was to take a hard line as had the court at first instance, the effect on practise would be significant. It was noticeable that one of the excuses given by the firm of solicitors involved was that they were a small firm with little support and that meeting such time limits was difficult. That undoubtedly is the case in many firms. Many litigation practices juggle between cases. They work on the basis that a degree of cooperation between the parties will see the case through to resolution but that neither party is going to stick by harsh interpretation of time limits as a litigation tactic. From a practitioner’s point of view, the litigation process is ultimately served, albeit by the parties acting in concert to manage that process. If the Court of Appeal were to take a strict interpretation of time limitations, that method of managing the process would have to change dramatically. It may be seen that firms would have to devote the resources to meeting the precise time limits for future management. This might be seen to be giving substantial tactical power in the process to a larger firm with more substantial resources.
For these reasons, on both the judicial and practitioner side, the Mitchell decision was awaited with interest and trepidation. The decision itself is now well rehearsed. The Court of Appeal did indeed take a harsh line against the solicitors in confirming the first instance decision. For the judiciary this was an hurrah. For practitioners, it was largely unwelcome and presents practical difficulties and questions.
Undoubtedly, it will give rise to substantial satellite litigation. Initially, that might be applications for extensions and then relief against sanctions under CPR 3.9. In due course, however, it may also lead to a glut of professional negligence claims against solicitors for missing deadlines.
The Court of Appeal gave some guidance as to the manner in which relief against sanctions under CPR 3.9 should be managed by the court. But that also gave practitioners some unwelcome news. Effectively, the court said that there should be no relief against sanctions without some very good excuse. The lack of capacity in a solicitor’s firm to be able to cope was not such an excuse. Perhaps chronic illness might suffice. As a matter of practice, it could make the tendency for smaller practices to juggle cases so that they can cope with a full book of litigation a difficult exercise in the future.
It may be justice but not justice as we have known it.
This article was first published on Lexis®PSL Dispute Resolution on 5 December 2013. Click here for a free 24 trial of Lexis®PSL.
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