The Court of Appeal’s ruling today [4 July] in three linked appeals relating to its its earlier judgment in Mitchell will make civil litigation less adversarial and more co-operative, the Law Society has predicted.
The Mitchell ruling on case management rules had been subject to a string of criticisms. These included that the ‘triviality’ test amounted to an ‘exceptionality’ test, which had been rejected by Jackson LJ, and that it was unjustifiably narrow, Chancery Lane said.
In Denton & Ors v TH White Ltd & Anor  EWCA Civ 906 (04 July 2014) the Master of the Rolls and Lord Justice Vos insisted in a joint judgment that the guidance given in Mitchell remained “substantially sound”. But “in view of the way in which it has been interpreted”, they restated the approach that should be applied in more detail.
The MR and Lord Justice Vos said judges addressing an application for relief from sanctions should go through three stages.
“The first stage is to identify and assess the seriousness and significance of the ‘failure to comply with any rule, practice direction or court order’ which engages rule 3.9(1) [of the CPR]. If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages,” they said.
“The second stage is 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….’.”
The MR and Lord Justice Vos said they were concerned that some judges were adopting an unreasonable approach to rule 3.9(1). “[The] decisions reached by the courts below in each of the three cases under appeal to this court illustrate this well.”
They added: “Two of them evidence an unduly draconian approach and the third evidences an unduly relaxed approach to compliance which the Jackson reforms were intended to discourage.”
Welcoming the latest ruling, the Law Society – which intervened in the Denton case – said the Mitchell ruling had had a “significantly detrimental” effect on the conduct of civil litigation as the judgment's strict application of case management rules had led to “a raft of satellite litigation” that had "clogged up the courts".
“It has also led to inconsistent lower court decisions and a much more adversarial, non-cooperative litigation culture with increased costs,” Chancery Lane added.
The Court of Appeal anticipated that a contested application for relief from sanctions should now be exceptional and it had warned the profession that “opportunism” would be penalised, the Law Society said.
Law Society chief executive Desmond Hudson said: “The court’s previous decision in Mitchell and the way it was being applied by the lower courts had resulted in disproportionate penalties and a breakdown in co-operation between parties to litigation, clogging up the system and introducing huge uncertainty into the whole process of civil litigation.
“This in turn had led to a significant amount of unnecessary satellite litigation, a waste of costs and court resources and the risk of big increases in professional indemnity insurance costs for our members.”
Hudson said the Law Society would continue to closely monitor the litigation process to ensure that the problems since Mitchell now fell away. “If the problem of interpretation of the rules is to be eradicated then we also need the courts to be more consistent in the application of the rules.”