PERSONAL INJURY NEWSLETTER JULY What a relief! Or is it?

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1 PERSONAL INJURY NEWSLETTER JULY 2014 What a relief! Or is it? Since November 2013 'Mitchell' is a word which has been on everyone's lips. This article outlines the findings of the Court of Appeal in the recent decision of Chartwell Estate Agents Limited v Fergies Properties SA and Hyam Lehrer [2014] EWCA Civ 506 and considers its practical implications for those dealing with applications for relief from sanctions. THE FACTS The Claimant is a company providing estate agent services and the First Defendant is a company who owned property in Knightsbridge. The action itself related to a claim brought by the Claimant for commission allegedly due from the sale of the First Defendant's property to the value of 450,000 including VAT. Proceedings were issued by the Claimant on 8 th May A defence was served on 20 th May 2013 and a Reply on 20 th June The matter then came before Master Leslie on 17 th October 2013 for a case management conference, whereby it

2 was directed that witness evidence be simultaneously exchanged by 4pm on 22 nd November Following Master Leslie's order, there were continued disputes between the Claimant and First Defendants' solicitors regarding disclosure. The Claimant's solicitors maintained its position that the First Defendant's solicitors had failed to satisfy its disclosure obligations, and without full disclosure they would not be in a position to finalise their witness evidence. On 20 th November 2013, two days prior to the deadline for service, the First Defendant's solicitors wrote to the Claimant's solicitors querying whether they wished to apply for an extension of time to serve their witness evidence. On 22 nd November 2013, neither party was ready to exchange their witness evidence however neither party applied to the court for an extension of time for service. The dispute regarding disclosure continued until 16 th January On that date the First Defendant wrote to the Claimant providing further disclosure, and made express reference to CPR and CPR 3.9 and the principles laid down in Mitchell v News Group Newspapers Limited [2013] EWCA Civ An application was made to the court by the Claimant's solicitors thereafter for an extension of time to serve the witness evidence to 10 th February 2014 and for relief from sanctions for failing to serve the witness statements on 22 nd November 2013.

3 THE FINDINGS At first instance, Globe J held that the failure to serve the witness evidence within the prescribed timeframe could not be categorised as trivial in the sense explained in Mitchell, and that the Claimant had failed to provide sufficiently good reasons for the default. Globe J took the view that there was no justifiable reason why the relevant application for an extension of time could not have been made prior to the specified date. Notwithstanding the above, Globe J held that relief from sanctions ought to be granted to both parties, having regard to all the circumstances of the case, in particular the fact that: both parties were in default; despite the complexity of the issues between the parties, there was no reason why the trial date, fixed in a window commencing on 29 th April 2014, could not be maintained; it would be disproportionate to deprive the Claimant of the opportunity to pursue its claim; whilst following Mitchell, proportionality and compliance with rules, orders and practice directions, were regarded as being of paramount importance in respect of CPR 3.9, it does not preclude other factors from being taken into consideration; refusing to grant relief in the circumstances would be too severe a consequence and would bring about an unjust result against the history of the case;

4 there would be no significant additional costs consequences if relief were granted and the costs budgets would be maintained. The Defendants appealed to the Court of Appeal, with leave granted from Levison LJ. Upon appeal, Davies LJ upheld the first instance decision of Globe J and in doing so, made the following observations: Globe J was entitled to decide the matter as he did and to find that the breach was not trivial, and that there was no good reason for the default; the rules had not been deliberately flouted by the parties, there had merely been a lack of understanding as to the application of the revised rules; Globe J was entitled to depart from the expectation that the two factors specified in CPR 3.9 will usually trump other circumstances, and to find that those two factors were outweighed by the wider circumstances in this case; the decision at first instance was sound in law and he had properly applied both CPR 3.9 and Mitchell; accordingly, there was no basis for interfering with the decision of Globe J. IMPLICATIONS This decision acts as a reminder that each case will very much turn upon its own individual facts. It reminds us that the court may be inclined to grant relief where a breach cannot be regarded as trivial and where there is no good reason for the

5 default, when the wider circumstances of the case warrant it. The decision also illustrates that courts will be unwilling to interfere with the case management decisions where the law has been correctly applied. Whilst at first blush this decision appears to mark a departure from the robust approach taken in Mitchell and in subsequent cases, the implications of Chartwell ought not to be overstated and the decision ought not to encourage complacency. Instead, Chartwell ought to be regarded as an exceptional case with a unique set of facts. Best practice would dictate that parties strive to meet the deadlines imposed by the courts, rules and practice directions and, if this is not possible, parties should apply, in advance of the prescribed deadline, for an extension of time, or as soon as is possible for relief from sanctions. Heather Aspinall accepts instructions in all aspects of civil and personal injury litigation. Please contact her clerks on or at - 68 Quay Street Manchester M3 3EJ Tel: Website:

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