RELIEF FROM SANCTIONS – WATCH IT!

PI_John_Morris_Collins By John M Collins 

After the turbulence of the past year, provoked primarily by the Mitchell case [2014] 1WLR 795, we all surely know about relief from sanctions – but do we?

One starts with rule 3.8, which is very wide.

“(1) Where a party has failed to comply with the rule, practice direction or court order, any sanction for failure to comply imposed by the rule, practice direction or court order, has effect unless the party in default applies for and obtains relief from the sanction.

(2) Where the sanction is payment of costs, the party in default may only obtain relief by appealing against the order for costs.

(3) Where a rule, practice direction or court order –

(a)      requires a party to do something within a specified time, and

(b)     specifies the consequence of failure to comply,

the time for doing the act in question may not be extended by agreement between the parties”.

Of course, if there is mutual trust between the firms on either side, in practice they can come to an agreement about a small extension of time on the basis that the side who could enforce the sanction undertakes firmly not to do so.  Otherwise, you must apply.

The application is under Rule 3.9 for relief:

“(1) On an application for relief from any sanction imposed for failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case so as to enable it to deal justly with the application, including the need – (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders.  (my underlining)

(2) An application for relief must be supported by evidence”.

This may seem elementary, but it is astonishing how often blithe applications are made for extensions of time or permission to do an act out of time, without appreciating that this is in reality an application under 3.9.

This point was made recently in an important judgment of Leggatt J in Summit Navigation Ltd-v-Generali Romania Asigurare Reasigurare SA [2014] 1WLR 3472.  There, the Claimants that agreed to an order that they provide security for costs by 5th December 2013, failing which, the action would be stayed.  The security was made available on 6th December.  The Claimant sought an order that the claim was no longer stayed or, in the alternative, that the stay be lifted.  The first argument was whether a stay was a sanction covered by 3.9.  Leggatt J ruled that it was.  He said (at 27) “The term ‘sanction’ seems to me apt to include any consequence adverse to the party to whom it applies”.  He went on to emphasise that 3.8 and 3.9 are “a coherent scheme”.  3.8(3) and 3.8(1) deal “with the same situation, in the one case before and in the other case after, the time specified for doing the act has expired”.  He rejected the argument for the Claimants that the stay lifted automatically once security was provided.

Sometimes, it is somewhat uncertain as to whether there has been a clear sanction.  So when in doubt, use 3.9.  But that means that a full witness statement must be made, setting out all the circumstances of the failure to comply precisely with the court order or practice direction or rule and addressing clearly the two issues emphasised by 3.9.  It is never enough simply to put a short note on the application form.  The rule not only makes a requirement, but it provides an opportunity.  It is, for instance, important to show, if you can, that to grant the relief would not interfere with the dates scheduled for further steps or with the trial date and would not disadvantage the other side.  It is no good leaving it to a possible skeleton argument filed just before the hearing to try to make one’s points.  It should be there in the witness statement.

This does of course create a problem, since an application of this kind frequently has to be made when the time limit has hours to expire.  In my opinion, the proper course then is to put in a short witness statement and say that, having regard to the urgency of the matter, this is a brief statement but, with the court’s permission, it will be expanded in a fuller statement within the next few days, and then carry out the necessary work to provide a fuller statement.

JOHN M. COLLINS

Zenith Chambers

10 Park Square

Leeds

LS1 2LH

22nd October 2014

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