Legal Watch - Personal Injury - Issue 26

Legal Watch: Personal Injury 9th July 2014 Issue: 026

Jackson/Mitchell Judgment has been handed down in the much anticipated appeals relating to early Jackson/Mitchell case management decisions. The outcome is a new set of guidelines as to how

In This Issue:

CPR should be applied by the courts.

• Jackson/Mitchell

In Denton and others v TH White Ltd and another (and related

• Civil Procedure/Service Of A Claim Form

appeals) (2014) EWCA Civ 906 there were three conjoined appeals in which one or other party had sought relief from sanctions arising pursuant to CPR 3.9, the court was required to determine the correct approach to the rule and to the guidance given in Mitchell.

The respective judges had purported to apply the Mitchell guidance, but in each case, the parties had been treated inconsistently.

Allowing all three appeals but with Jackson LJ dissenting in part in the reasoning, the Court of Appeal held that Mitchell had been misunderstood and was being misapplied by some courts. It was clear that it needed to be clarified and amplified in certain respects.

‘...Mitchell had been misunderstood and was being misapplied by some courts’ The principal criticisms were summarised as follows. First, the “triviality” test amounted to an “exceptionality” test which was rejected by Sir Rupert Jackson in his report and was not reflected in the rule. It was unjustifiably narrow. Secondly, the description of factors (a) and (b) in CPR 3.9(1) as “paramount considerations” gave too much weight to these factors and was inconsistent with CPR 3.9 when read in accordance with CPR 1.1. They should be given no more weight than all other relevant

factors. It was said that the Mitchell approach downplayed the obligation to consider “all the circumstances of the case, so as to enable [the court] to deal justly with the application”.

Thirdly, it had led to the imposition of disproportionate penalties on parties for breaches which had little practical effect on the course of litigation. The result was that one party got a windfall, while the other party was left to sue its

Stage 2 The second stage cannot be derived from the express wording of rule CPR 3.9(1), but it is nonetheless important particularly where the breach is serious or significant. The court should consider why the failure or default occurred: this is what the court said in Mitchell at paragraph 41.

own solicitors. This was unsatisfactory and added to the

It would be inappropriate to produce an encyclopaedia of

cost of litigation through increases in insurance premiums.

good and bad reasons for a failure to comply with rules,

Fourthly, the consequences of this unduly strict approach

practice directions or court orders. Paragraph 41 of Mitchell

had been to encourage (i) uncooperative behaviour by

gives some examples, but they are no more than that.

litigants; (ii) excessive and unreasonable satellite litigation; and (iii) inconsistent approaches by the courts.

Stage 3

A judge should address an application for relief from

The important misunderstanding that has occurred is

sanctions in three stages. The first stage is to identify and

that, if (i) there is a non-trivial (now serious or significant)

assess the seriousness and significance of the “failure to

breach and (ii) there is no good reason for the breach, the

comply with any rule, practice direction or court order”

application for relief from sanctions will automatically fail.

which engages CPR 3.9(1). If the breach is neither serious

That is not so and is not what the court said in Mitchell: the

nor significant, the court is unlikely to need to spend much

court will consider “all the circumstances of the case, so as

time on the second and third stages. The second stage is

to enable it to deal justly with the application”.

to consider why the default occurred. The third stage is to evaluate “all the circumstances of the case, so as to enable [the court] to deal justly with the application including [factors (a) and (b)]”.

Stage 1

Thus, the court must, in considering all the circumstances of the case so as to enable it to deal with the application justly, give particular weight to these first two important factors.

In doing so, it will take account of the seriousness and significance of the breach (which has been assessed at the first stage) and any explanation (which has been considered

In these circumstances, the court felt it would be preferable

at the second stage). The more serious or significant the

if in future the focus of the enquiry at the first stage should

breach the less likely it is that relief will be granted unless

not be on whether the breach has been trivial. Rather,

there is a good reason for it. Where there is a good reason

it should be on whether the breach has been serious or

for a serious or significant breach, relief is likely to be

significant. The court should concentrate on an assessment

granted. Where the breach is not serious or significant, relief

of the seriousness and significance of the very breach in

is also likely to be granted. But it is always necessary to

respect of which relief from sanctions is sought.

have regard to all the circumstances of the case. The factors

If a judge concludes that a breach is not serious or significant, then relief from sanctions will usually be granted and it will usually be unnecessary to spend much time on the second or third stages. If, however, the court decides that the breach is serious or significant, then the second and third stages assume greater importance.

that are relevant will vary from case to case. As has been pointed out in some of the authorities that have followed Mitchell, the promptness of the application will be a relevant circumstance to be weighed in the balance along with all the circumstances. Likewise, other past or current breaches of the rules, practice directions and court orders by the parties may also be taken into account as a relevant circumstance.

The appeal court went on to say that it wished to make

taken into account under CPR 44.11 when costs are dealt

it plain that it is wholly inappropriate for litigants or their

with at the end of the case. If the offending party ultimately

lawyers to take advantage of mistakes made by opposing

wins, the court may make a substantial reduction in its

parties in the hope that relief from sanctions will be denied

costs recovery on grounds of conduct under rule 44.11. If

and that they will obtain a windfall strike out or other

the offending party ultimately loses, then its conduct may

litigation advantage. In a case where (a) the failure can be

be a good reason to order it to pay indemnity costs. Such

seen to be neither serious nor significant, (b) where a good

an order would free the winning party from the operation of

reason is demonstrated, or (c) where it is otherwise obvious

CPR 3.18 in relation to its costs budget.

that relief from sanctions is appropriate, parties should agree that relief from sanctions be granted without the need for further costs to be expended in satellite litigation. The parties should in any event be ready to agree limited but reasonable extensions of time up to 28 days as envisaged by the new CPR 3.8(4).

It should be very much the exceptional case where a

The judges commented on the submissions that have been addressed to the consequences of scarce public resources.

This, they said, is now sadly a fact of life, as much in litigation and in the courts as elsewhere. No judicial pronouncement can improve the position. It does, however, make it all the more important that court time is not wasted and hearings, once fixed, are not adjourned.

contested application for relief from sanctions is necessary.

This is for two reasons: first because compliance should become the norm, rather than the exception as it was in the past, and secondly, because the parties should work together to make sure that, in all but the most serious cases, satellite litigation is avoided even where a breach has occurred.

Comment On the face of it this clarification is helpful and relieves some of the pressure on practitioners. Everyone is now aware of the importance of avoiding a default which results in a sanction. If a default is unavoidable the new ‘buffer’ provision in CPR 3.8 may be used to agree an extension of

The court will be more ready in the future to penalise

up to 28 days, provided that there is no impact on a hearing

opportunism. The duty of care owed by a legal representative

date – a point relating to court resources. If more than 28

to his client takes account of the fact that litigants are

days is required and/or a hearing may be put at risk, an

required to help the court to further the overriding objective.

application must be made before the default arises but that

Representatives should bear this important obligation to

is not one for relief under CPR 3.9. It falls to be considered

the court in mind when considering whether to advise their

by reference to the overriding objective.

clients to adopt an uncooperative attitude in unreasonably refusing to agree extensions of time and in unreasonably opposing applications for relief from sanctions. It is as unacceptable for a party to try to take advantage of a minor inadvertent error, as it is for rules, orders and practice directions to be breached in the first place. Heavy costs sanctions should, therefore, be imposed on parties who behave unreasonably in refusing to agree extensions of time or unreasonably oppose applications for relief from sanctions. An order to pay the costs of the application under CPR 3.9 may not always be sufficient. The court can, in an appropriate case, also record in its order that the opposition to the relief application was unreasonable conduct to be

If, despite all of this, a party does find itself in default it must consider its position under the new three stage test.

The inference is that missing a time limit by a short period and applying for relief promptly will probably be looked on favourably, particularly as the opposing party is positively discouraged from raising any objection, at risk of bearing severe costs consequences. With a more serious or significant breach, for which there is likely to be little good reason, the prospects of successfully applying for relief from sanctions will be lower. However, two problems remain.

First, how long will it take before we know how stages 1 and 2 are going to be interpreted? This situation is bound to

be aggravated by the fact that the non-defaulting party will almost certainly feel safer ‘sitting on its hands’, rather than taking any active steps and risking criticism. Secondly, how will courts interpret stage 3 which appears to reintroduce the concept of standing back and looking at the issue of justice between the parties? Can we expect consistency of approach here when the recent experience has been of widespread inconsistency? And to what extent will the issue of court resources impact on judges’ decisions and attract disproportionate weighting?

Some of the real fear of Jackson/Mitchell has been removed but there remains uncertainty as to how far into default a party may fall and yet still be saved by invoking the stage 3 test.

Civil Procedure/Service Of A Claim Form Power v Meloy Whittle Robinson Solicitors (2014) EWCA Civ

decided that there was no good reason to authorise service

989 is the most recent in a line of cases that has looked at

by another method under CPR 6.15 because (i) there had

the effective service of a claim form by the operation of CPR

never been any difficulty about effecting service and the

6.15(2).

defendant had not been evasive; (ii) where parties agreed

On an application under this rule, the court may order that steps already taken to bring the claim form to the attention of the defendant by an alternative method or at an alternative place is good service.

The respondent/defendant had successfully settled a compensation claim made by the appellant/claimant for vibration white finger (VWF). However, the claimant later alleged that the defendant had negligently failed to investigate and pursue a services claim on his behalf.

A case management order issued in 2011 laid down the procedures to be followed by prospective claimants alleging negligence against solicitors concerning VWF. In

to serve solicitor to solicitor, it was wrong to go behind that agreement; (iii) it was wrong to allow a claimant to sidestep any rigours by reliance upon CPR 6.15.

Allowing the claimant’s appeal, the Court of Appeal held that in the light of the guidance in Abela (2013), the judge’s first and third reasons for declining to grant the relief sought under CPR 6.15 were insupportable. The relevant focus was upon why the claim form could not have been served in the ordinary way during the period of its validity for service and whether the steps already taken to bring the claim form to the defendant’s attention constituted good service. The matter should be considered afresh.

August 2012, one month before the expiry of the limitation

The claimant’s new solicitors could be criticised for failing

period, the claimant’s new solicitors sent draft claim forms

to respond to the defendant’s solicitors’ query concerning

to the Salford Business Centre, in accordance with a new

the formality of service, and steps could have been taken in

administrative procedure, and requested that the issued

an attempt to ascertain what had become of the claim form.

claim form be returned to them for service on defendant’s

They did not know that the proceedings had been issued

solicitors in accordance with CPR6.7. The claim form was

on 14 September 2012, as the defendant’s solicitors did,

issued on 14 September 2012. The court, however, sent it

but they did know that they had neither received the issued

directly to the defendant, who received it on 18 September

claim form from the court nor served it themselves. To them,

2012. Hard copies were then sent by the defendant to its

therefore, it would have been obvious that the proceedings

solicitors. The court also failed to send the claimant’s new

had not been formally served, unaware as they were that

solicitors a notice stating the date upon which the claim form

the proceedings had in fact been served by the court on

was deemed served pursuant to CPR 6.14. The defendant’s

the defendant direct. To the defendant’s solicitors it was

solicitors wrote to the claimant’s new solicitors stating that

equally obvious that the proceedings had not been formally

it was unclear whether the proceedings had been formally

served as they had not been served as required by CPR

served, but indicated that the claim was being dealt with

6. However, the correspondence proceeded upon the clear

as if it was a live claim. The claimant’s solicitors did not

understanding that the claimant was actively pursuing his

respond until after the limitation period had expired. The

claim. Nothing short of an explicit enquiry concerning the

claimant successfully applied for an extension of time for

validity of service upon the defendant direct in the light of

service of the claim form pursuant to CPR 7.6 and served

CPR 6.7 would have sufficed to put the claimant’s solicitor on

the claim form on the defendant’s solicitors. However,

notice as to the errors made by the court. That the claimant

the proceedings were later struck out, the judge having

intended to pursue the claim was apparent not just from his

issue and service or attempted service of a claim form, but also from the time and money expended in compliance with the case management order. The defendant already knew the nature of the case; the only thing added by the claim form was the circumstance that its issue and service or attempted service demonstrated that the claimant intended to convert his “potential claim” into an “existing claim”. His solicitors only became aware of the court’s error at the end of March or early April 2013. Thereafter, they acted in a manner which “might just possibly be said to be promptly”.

The defendant knew everything they needed to know about the claim and knew that the claimant intended to pursue the action and that he had at the very least attempted to serve proceedings upon them, through the medium of the court. The correspondence and discussions between the solicitors, objectively viewed, could only have given the impression that the claim was acknowledged to be live, which in the context was consistent with service having been effected within the period of validity of the claim form.

There was an overwhelmingly good reason to order under 6.15(2) that the steps already taken to bring the claim form to the defendant’s attention constituted good service.

A second case with a similar outcome is Norcross v Georgallides [Lawtel 7/07/2014].

The claimant had served the claim form at an address that he believed was the defendant’s address for service, but it was not the correct address. The defendant became aware of the proceedings and applied to set aside service. He then died and there was a short delay before his personal representatives were substituted as defendants. By the time that the defendant’s application to set aside was heard, the

‘…the steps taken to bring the claim form to the defendant’s attention… were deemed to be good service’ Allowing the application, the deputy High Court judge ordered that the steps taken to bring the claim form to the defendant’s attention, in particular the service that had already taken place, were deemed to be good service. The claim form and particulars of claim had come to the attention of the defendant and his advisors well before the expiry of the claim form; that was apparent from the application to set aside service and the correspondence. The defendant was not prejudiced. Looking at the overall justice of the case, there was no point in requiring the claimant to re-start the proceedings and incur additional costs.

The third case under this heading is American Leisure Group Ltd v Garrard and others (2014) EWHC 2101 (Ch).

The first defendant sought a declaration that the purported service by the claimant of its claim form and the accompanying particulars of claim was not valid. In the event that the application succeeded, the claimant crossapplied either for an extension of time for service of the claim form under CPR 7.6(3) or for an order under CPR 6.15(2) that steps already taken were sufficient to have brought the claim form to defendant’s attention.

validity of the claim form had expired. Service was set aside

The claim form had been issued on 7 August 2013. However,

on the basis that the claimant had failed to take reasonable

no attempt was made to serve it on any of the seven

steps to locate the defendant’s correct residential address.

defendants within the next four months. The claim form gave

However, the judge had observed that the service issues

two addresses for the first defendant: one in Switzerland

were not necessarily insurmountable. The claimant applied

and the other in London. The claimant’s evidence was that it

under CPR 6.15 for an order for deemed service.

understood that the Swiss address was the first defendant’s residential address and that the London address was his office address. In fact, he had been residing in London for over two years: he had resided at the Swiss address for about two years but had moved back to London in 2011. On

or about 9 January 2014, the first defendant received from

It had not complied with 7.6(3)(b), which required it to show

the court a copy of an order giving permission for service

that it had taken all reasonable steps to comply with CPR

out of the jurisdiction of the claim form on three defendants

7.5 but had been unable to do so. The fact that the claimant

with addresses abroad. He instructed solicitors, who wrote

included both the Swiss address and the London address

to the claimant’s solicitors, informing them of his residential

in the claim form indicated that it had doubt or concern as

address in London and stating that they had instructions to

to where the first defendant should be served. The most

accept service. The claimant’s solicitors sent the claim form

elementary enquiries would have revealed that he resided

to them. They then objected to its late service, asserting

in London, not Switzerland. Further, no attempt had been

that no steps to serve it had been taken within the four-

made to serve the claim form on him by mid-January 2014.

month period allowed by CPR 7.5(1).

If the claimant had taken reasonably prompt steps to effect

Allowing the defendant’s application but disallowing the claimant’s cross application, the High Court judge held that the claimant had argued that the case was governed by CPR 7.5(2), as the claim form was “to be served out of the

service on the first defendant even in Switzerland following the issue of the claim form, it was likely that it would have become apparent that he no longer resided there and that he in fact resided in London.

jurisdiction” and therefore service could validly be effected

The claimant had also relied on CPR 6.15 but it was not in

within six months after the date of its issue; the claim form,

point. It was concerned with permitting service by a method

it asserted, was properly to be regarded as one to be served

or at a place not otherwise permitted by CPR 6. This case

out of the jurisdiction because one of the addresses given

was not concerned with either the method by which or the

for the first defendant was in Switzerland. That submission

place at which service was effected. The issue was the time

could not be sustained. CPR 7.5(2) was not concerned

at which service was effected, which was governed by CPR

with, and did not permit, service of a claim form within the

7.5., with the power to extend time being conferred by CPR

jurisdiction. It was clear that CPR 7.5(1) was concerned

7.6. CPR 6.15 was not a means by which time could be

with the service of a claim form within the jurisdiction, while

extended, and would certainly not be a means by which

7.5(2) was concerned with its service out of the jurisdiction.

time could be extended where it had been or would be

The claim form was not served within the time limit imposed

refused under CPR 7.6.

by CPR 7.5.

‘The most elementary enquiries would have revealed that (the defendant) resided in London, not Switzerland’ As the claimant’s application for an extension of time had been made outside the period specified by CPR 7.5 for service of the claim form, an order to extend the time for compliance with that provision could be made only if the claimant satisfied the requirements of CPR 7.6(3)(b) and (c).

A declaration would be made that the purported service of the claim form and accompanying particulars of claim on the first defendant in January 2014 was not valid.

Comment These cases illustrate a growing trend on the part of claimants to circumvent problems with service by falling back on CPR 6.15. Even where a claimant has failed to effect valid service of a claim form in accordance with CPR it is apparent the courts are likely to find that there has been service by an alternative method, wherever it is established that the defendant has knowledge of the proceedings by other means.

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