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The importance of complying with Court orders, rules or practice directions

Posted by: Gherson Litigation

In this briefing note, we will examine the importance of complying with Court directions within proceedings and what do if you miss a deadline.

It does not deal with any issues under the Limitation Act 1980, which will be the subject of a future note.

Orders of the Court

After the parties have pleaded their respective cases, they will seek to agree directions for the stages up to and including a trial. If the parties cannot agree on the directions, it will be left to the Court to determine them at a short hearing known as a Costs and Case Management Conference (“CCMC”).

The directions are effectively a timetable for the parties to undertake the stages of litigation. For example, they can include deadlines for:

  1. Complying with disclosure obligations;
  2. Serving witness statements; or
  3. Serving expert evidence. The directions will also set out the length of any trial and a trial window, i.e., a period of a few weeks in which the trial may later be listed.

As such, if a party misses a deadline to comply with a direction it may have a knock-on effect for the forthcoming directions and potentially may jeopardise the trial date. Given that Court’s diaries are usually extremely full, the Court is particularly reluctant to move a trial or hearing date as it may also affect the dates for other parties in different proceedings. Therefore, it is extremely important for a party to ensure that they comply with a Court direction.

Consequences of not complying with a Court direction

If a party has failed to comply with a rule, practice direction or court order, any sanction for failure to comply imposed by the rule, practice direction or court order has effect until the party applies for and obtain relief from the sanction (see, CPR 3.8(1)).

Sanctions that a party may face if they do not comply with a direction on time could include a costs penalty or be barred on relying on something in the proceedings, such as a witness statement. Further, in some cases, a party’s case may be struck out. However, that is only usually after the other party has successfully applied for a specific order called an “unless order”. This means that unless Party A does something by a certain date, it may be barred from bringing or defending an action.

Nevertheless, even if you do miss a direction, all is not lost.

What to do if you miss a Court deadline

If a party has missed a Court deadline, it should consider making an application for relief from sanctions as soon as possible. The application, if successful, would mean that a party would not suffer the sanction for missing the deadline. In the example, above, if a party was late filing a witness statement, it would mean they could still rely on that statement.

What criteria does the Court look at when granting relief from sanctions?

When considering whether or not to grant relief from sanctions, the Court will consider a 3-stage test that was first set out in Denton v White; Decadent Vapours Limited v Bevan; Utilise TDS Limited v Cranstoun Davies [2014] EWCA Civ 906. In summary, the test is as follows:

  1. Is the breach serious?
  2. Is there a reasonable explanation for the breach?
  3. Are there any other “circumstances” the Court should consider?

Briefly, taking these in turn:

Is the breach serious?

Of course, some breaches are more serious than others. It will usually depend on the length of time a party has taken to remedy the breach and what significance the delay will cause. Take these two examples:

  • A. Party A serves a witness statement 15 minutes late due to an IT issue. The next direction for expert evidence is four weeks away.
  • B. Party B serves its expert evidence 17 days late since its expert was taken ill. The experts were due to meet during 14 days after exchange of expert evidence and produce a joint report within a further 7 days. The trial is listed 2 weeks thereafter.

In both of the above examples, both parties have breached a Court order and would therefore need to make an application for relief from sanctions. However, in Example A, the other party has suffered little, or no, prejudice and it hasn’t affected the next direction. Contrast this with Example B; the other party has been prejudiced as it has not been able to comply with the direction that the experts should meet. Further, given the trial is only a matter of weeks away, Part B’s breach could jeopardise the trial date if the Court were to grant relief. Therefore, it can be said, that the breach in Example A was not serious, whereas the breach in Example B was serious.

Is there a reasonable explanation for the breach?

The importance of complying with Court orders, rules or practice directionsHaving established whether or not the breach is serious, the Court must then determine whether or not there is a reasonable explanation for the breach. Taking Examples A and B, above, the Court is likely to consider the reasons for both breaches to be reasonable (i.e., an IT issue or the illness of a party’s expert). However, not all explanations will be accepted by the Court. For example, if a party missed the deadline due to simply running out of time or since they are on holiday, the Court is unlikely to consider such an excuse to be “reasonable”. Further, and surprisingly, if the deadline is not met due to a mistake by a party’s solicitor, the Court is also not likely to accept this as a reasonable excuse (the rationale being that the party may have a claim in negligence against its solicitor so may not suffer much prejudice).

All the circumstances of the case

Having determined whether or not the breach was serious and whether there was a reasonable explanation or not, the Court will then examine “all the circumstances of the case”. This is effectively a catch all for any other arguments that can be raised by either party. These may include the following:

  1. The consequences of the sanction on either party;
  2. Whether the offending party has breached other court orders of practice directions;
  3. Whether or not the application was brought promptly – this is particularly important given that a breach has a knock-on effect to the other directions and, potentially any hearing or trial date;
  4. The value of the case.

Surprisingly, the Court will only consider the prospective merits of the case in limited circumstances, i.e., when the offending party has a particularly strong case or the innocent party a weak case, and vice-versa. However, the Court will not conduct a mini-trial and it is open for the parties to make the relevant application, for example for summary judgment or strike out.

Procedure

The offending party should consider making an application supported by evidence. This evidence should consider any points the party wishes to rely on in the 3-stage test, above. It should be noted that only the Court can grant relief from sanctions and therefore the parties can not simply enter into a consent order to grant the relief. However, if the innocent party agrees to the granting of the relief, then the Court will likely grant, it so long as it does not jeopardise a hearing or trial date.

Further, any innocent party should also bear in mind that there may be adverse costs consequences for unreasonably opposing a relief from a sanctions application. Let’s take Example A, above. If the application was made promptly and Party B opposed it, it is likely the Court would grant relief and make an adverse costs order against Party B.

A party considering making an application should also consider whether there are any other specific parts of the CPR to make such an application. For example, if a party does not serve its defence in time and is on the receiving end of a Judgment in Default, the appropriate application would be an application to set aside the Judgment in Default under [CPR 13.3] rather than an application for relief from sanctions. The criteria for such an application are different than that for relief from sanctions.

Practical Points

If you are a party who has breached or Court Order, rule or practice direction, then you should consider making an application for relief from sanctions as soon as possible. It is advisable to obtain legal advice first as there will be adverse costs consequences.

You may also want to offer to pay the innocent party’s legal costs of your breach as the Court may insist that this is a condition of granting relief.

If you consider you are potentially going to miss a Court deadline, it is advisable to make an application for an extension of time before the deadline for compliance has occurred. The test for such as an application is the same as that for relief from sanctions. However, the Court will usually be more sympathetic for an application for an extension of time than a relief from sanctions application.

Further, if you are an innocent party on the receiving end of a relief from sanctions application, it is advisable to obtain legal advice since any opportunistic opposing of an application for a minor breach is likely to result in an adverse costs order against you.

Gherson’s litigation team has considerable experience dealing with advising and dealing with applications for relief from sanctions both for the offending party and the innocent party. If you have a potential claim or facing a potential dispute matter, please do not hesitate to contact us for advice, send us an e-mail, or alternatively, follow us on TwitterFacebook, or LinkedIn to stay-up-to-date.

 

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

©Gherson 2022

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