Life After Mitchell

In 2010, the Government published Lord Jackson’s Review of Civil Litigation Costs; 548 pages of proposals to limit expenditure in litigation. The backbone of the reforms were a new “overriding objective” promoting proportionality and proportionate expense in bringing proceedings. The general consensus among lawyers was that this was a positive change, but concern was simmering.

On 18 June 2013, Mitchell v News Group Newspapers went before Master McCloud at the Royal Courts of Justice. In brief, the parties were expected to file costs budgets prior to a Case Management Conference, setting out what their prospective costs were from that point until trial. The rules stated that the late filing of a budget would restrict the offending party’s costs to court fees only, and that is exactly what the Master did.

Mr Mitchell’s solicitors applied for relief from the sanction imposed. However, the Master found that “the new overriding objective and the identical wording in rule 3.9 highlight the emphasis to be placed, now, on rule compliance and one has to give effect to that” and refused to grant relief.

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The Court of Appeal endorsed that decision and gave some guidance:

a) If a breach was trivial, or a breach of form rather than substance, then the court may grant relief;

b) If a breach was not trivial, then the defaulting party should identify a ‘good reason’ why relief should be granted.

The court suggested “if the reason why a document was not filed with the court was that the party or his solicitor suffered from a debilitating illness or was involved in an accident, then, depending on the circumstances, that may constitute a good reason”.

There followed a string of judicial decisions that made some question whether the law was really worth it anymore – the positive danger that a minor error could sink your firm was a real fear. Solicitors were pouncing on the smallest of misdemeanours by their opponents, causing an increase in satellite litigation with increased applications for relief and appeals.

Then came an appeal (Denton [2014]) in which the Court of Appeal acknowledged the practitioner and academic criticism of Mitchell. The court determined that an application for relief should be addressed in three stages:

a) To identify and assess the seriousness and significance of the breach. If the breach is neither serious nor significant, the court will likely grant relief;

b) To consider why the default occurred;

c) To evaluate all the circumstances of the case, so as to enable the court to deal justly with the application including proportionality and the need to enforce compliance with orders and rules.

So, while there is still a concern that the severe residual spirit of Mitchell will continue to influence judicial decisions and that draconian decisions will result, with Denton, we see light at the end of the tunnel.