Relief from sanctions: 10 trends, tips and thoughts from the trenches
This feels like an appropriate time to reflect on my experiences arguing dozens of these relief from sanctions applications in a range of different courts. It has been a little over 4 years since the revision to CPR 3.9 which refined the test for relief from sanctions, and 3 years since the seminal clarification of the applicable principles in Denton v Utilise. Finally, it feels as though the changes have properly bedded in. Here are some of my observations, based on personal experience:
1. I can vividly remember the general panic after Master McCloud’s decision in Mitchell, which in turn led to a number of county courts making rather draconian decisions where a party was even a day late in complying with a deadline. The decision in Denton brought much needed clarity, and as lawyers have become familiar with the 3 stage test, the number of applications for relief from sanctions has diminished. There was a fear that the effect of Denton was to nullify the rule change altogether, but my sense overall is that there has been a positive impact upon conduct. Recently there seem to have been, in the reported cases, an increase in the proportion of applications which have been refused, but this is probably to be explained by the fact that as parties have generally stopped resisting applications where the breaches are trivial, the applications which come to court are those where the conduct is more serious and there is a better chance of the refusal of relief.
2. It is always dangerous to generalise, but I have a sense that the chances of being granted relief from sanctions are slightly higher in the Senior Courts than in the County Court. Perhaps this is because administrative resources appear, to an outsider, to be somewhat more strained in some of the County Courts, so that their judges necessarily have to adopt a less lenient view; perhaps because High Court cases will generally be worth more, the consequences of refusing relief will seem more draconian and therefore be less likely to be chosen by the court; or perhaps because smaller cases have to be run on a tighter budget, there is a greater chance of the situation where a case is not pursued proactively, with repeated failings, rather than the sort of one off mistake which occurs in large but well-run litigation.
3. The advantages of making an in-time application (as described by Nugee J in Guidezone Ltd  EWHC 1165 (Ch)), rather than a retrospective application for relief from sanctions need to be emphasised, as the test in Denton does not apply. Having said that, it should not be overlooked that the court then still has to apply the overriding objective and might still refuse an extension of time if, for example, there has been a history of delay by the applicant. I have seen applicants get into real problems where they make an application for an extension of time, but then by the time of the hearing have still not complied within the extended deadline sought.
4. Clearly in some cases there might be a genuine dispute about whether there was actually a breach, for example where there was an order for disclosure and some documents have been disclosed in time, but there is room for debate as to the extent to which additional documents should also have been disclosed. But when the breach is pretty clear, it is better to admit that and move on: I have seen several examples where applicant’s solicitors had reasonable cases on the other stages of the test, but have annoyed the court by refusing to concede that there has been a breach, very possibly resulting in a worse outcome than they might otherwise have achieved. A memorable low point in one of my own cases was when I tried to argue that my client’s solicitor had not given a misleading answer in the Directions Questionnaire about whether the client had complied with directions, because the question in the form was ambiguous. The District Judge interrupted me to say that he had been responsible for drafting the standard form of Questionnaire and didn’t see anything wrong with it! I was thankful that I had not strongly criticised the form, merely venturing that there might be an innocent reason why the form had been answered as it had.
5. At the first stage of the Denton test for relief from sanctions, there is now greater clarity on what will be regarded as a serious breach. For all but the most trivial errors, I find that it is counterproductive to argue that a breach is not serious, and the more credible approach is to accept that it is not trivial, but to suggest that it is not at the more serious end of the spectrum.
6. Where applicants often let themselves down, and create a bad impression, is in relation to the second stage. Realistically there is very little which will count as a good reason for the non-compliance, after the examples given in Denton – of incapacity or illness of the applicant or his/her solicitor – indicated that it essentially needed to be a factor outside of their control. I often see statements which sit on the fence, giving a slightly evasive or incomplete account of what went wrong, when the circumstances are never going to amount to a good reason and the reality is simply that a mistake was made. Unless you are going to be able to make out a genuinely good reason of the type referred to above, the more successful approach, in my experience, is to be candid and contrite. I do, however, think it is worth setting out detail which shows that the breach was inadvertent rather than deliberate, and that the client was not himself/herself at fault, as those factors can have an impact at stage 3.
7. Similarly, where the applicant is in breach, slinging mud back at the respondent as a way of deflecting criticism does not tend to go down well with the court. At best, this can be included as part of the circumstances at stage 3 if there is some conduct of the other party which is genuinely worthy of censure or which has had an impact on the timetable. Picking up on minor misdemeanours by the opposing party can backfire by highlighting how much more serious was the applicant’s own breach.
8. Delay in making the application for relief from sanctions can be fatal. It is mentioned in Denton as a factor to be weighed in the balance when the court considers all the circumstances at the third stage, and there may be scope for debate as to whether it can be a bar in itself. Some judges take the view that delay can increase the seriousness of the breach, because where it has led to further slippage in the timetable, the consequences of the breach can be said to be more serious. At the very least, delay can sub-consciously raise the question as to whether the applicant is serious about wanting to progress the proceedings. Where the application is made very promptly, on the other hand, this tends to indicate that the breach was an aberration and that the applicant takes it seriously. Given that only the court can grant relief from sanctions, and that an application therefore has to be made, there is no reason to delay while waiting to find out the opponent’s stance. If there is going to be delay while the application is being listed, consider whether there is anything you can be doing to try to move the timetable along in the meantime.
9. Having visited courts all over the land, it is very noticeable how hard pressed the court staff seem to be and how the system is creaking at the seams. Where there are busy lists, the effect of delays on other court users can be much more readily appreciated, and sometimes where it takes months for a hearing to be listed, the impact on the timetable can be greatly magnified. The legacy of the reforms ushered in by Jackson LJ has been to focus attention on the interests of court users beyond the parties themselves, and where relief from sanctions is refused because the court’s patience has been exhausted (which sometimes does not seem to take very much), this is often the factor which is said to be decisive.
10. Despite seeing many applications where relief was successfully obtained, I cannot recall a single instance where the respondent was ordered to pay the costs of the application. The court has invariably taken the view that it was the applicant’s fault which led to relief being required, and as it has relied on the court’s indulgence, it must accept liability for costs. My arguments – that that should only count up to a point, and that once the respondent has seen the evidence in support of the application and has taken the decision to positively oppose the application, it should bear a costs risk from that point onwards if that opposition is unsuccessful – have fallen on deaf ears…so far! Similarly, I have yet to be involved in an application where the court has penalised the respondent for acting opportunistically. This may be because respondents are taking the Court of Appeal’s warning about opportunism very seriously, and being astute to avoid responding unreasonably to minor breaches. My suspicion is that the courts regard the costs orders suggested in Denton to penalise opportunism as being rather draconian, and perhaps have some unspoken sympathy for the notion that trying to make the most of procedural opportunities to get an advantage over your opponent is what good litigators live for.
4 New Square
19 September 2017
Disclaimer: this article is for information only and is not to be relied on as legal advice. The circumstances of each case differ and legal advice specific to the individual case should be sought.