Burton v Cranfield Delta Whiskey Group – Relief from sanctions

The recent decision of Costs Judge Master Rowley, in Burton v Cranfield Delta Whiskey Group, granting relief from sanctions, is an unusual one.

The breach occurred pre-1 April 2013. Litigation Futures reported that the reasoning behind the decision was that Master Rowley said that the message sent by the Court of Appeal in Mitchell was it:

“seems to me to be aimed at current and future practice, rather than being a stick to beat parties with for errors for which relief, rightly or wrongly, would routinely have been granted had an application been made at the time”.

It was accepted that the breach was due to human error, not normally a sufficient excuse under Mitchell for relief, but the Master held:

“However, it seems to me that the reasoning in Mitchell is very much aimed at human errors occurring after April 2013, rather than 15 months or so before.”

Taken from first principles there appear to be two reasons for distinguishing between breaches that occur pre and post April.

Firstly, where the consequences of the breach (in terms of prejudice to the other side, delay to litigation, etc) are more serious where the breach has occurred after April.

Secondly, on the basis that parties had proper notice of the likely consequences of a breach after April but did not before. The argument here is that it would be unfair to penalise parties for pre-April breaches in circumstances where pre-April there was a more relaxed approach to breaches and parties would have expected relief to be granted. As such, parties would, not unreasonably, have been less assiduous in ensuring 100% compliance pre-April and it would therefore be inappropriate to penalise them, in effect, retrospectively. However, since April parties have been on notice as to the likely consequences of breaches. As such, they cannot complain if the sanction bites without relief for a post-April breach.

There seems nothing in the change in approach since April that means the consequences of a breach have become more serious where they occur post-April. I can therefore only conclude that just the second potential factor might be relevant, and it certainly seems to be this which Master Rowley focused on.

But there are two problems with this. First, it would have been perfectly possible when the new relief from sanctions test was introduced for the transitional provisions to be drafted such that the relevant test to apply was governed by the date of the breach. That could have been done, but it was not. The transitional provision determines that the relevant date is the date of the application:

“The amendments made by … these Rules do not apply to applications made before 1 April 2013 for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order.”

Given that is the relevant transitional provision, I struggle to see how a different trigger date can be applied by the courts. Of course, parties knew the new rules were coming into force before 1 April 2013 and had the opportunity to get their houses in order before that date. If a breach was indentified, and in most cases it would be possible to identify a breach by undertaking a proper review of the file (although possibly not on the facts of this case), an application could have been made before 1 April 2013 and the party thereby benefited from the old test.

Secondly, it must be remembered that in the Mitchell case the sanction that was imposed was not one contained in the pilot scheme that the case was proceeding under. The judge imposed a sanction not provided for by the rules. The sanction was not one that the defaulting party was on notice of or, I would suggest, one that would have been anticipated. That was the surprising element of the Court of Appeal’s decision. Nevertheless, the Court of Appeal was not impressed by the “lack of notice” argument.

In light of the transitional provision and the Mitchell judgment it is difficult to see why the date of the breach should impact on whether relief is granted.

25 thoughts on “Burton v Cranfield Delta Whiskey Group – Relief from sanctions

  1. Master Rowley was, quite simply, wrong. If there was no Appeal from his decision, that would be wrong also.

  2. I agree with Simon in that technically the new test would apply, but it doesn’t take a lawyer to realise that it would be unfair.

    If the breach occurred when the old test was in force, under which relief would have been granted, why should the new test be applied simply because of the date on the application?

    If relief had been refused the applicant would, in effect, have been penalised for failing to review and pick up each every minor breach on every active case prior to the new rules coming in. This has been a tubulant period for lawyers, with an awful lot to be considered and prepared for. We are human, and under such conditions even the best of us may fail to attain perfection.

    Whilst the rules are what they are, personally I’m glad to see a member of the judiciary allowing common sense to prevail over what seems to be a poorly drafted transitional provision.

  3. @anonymous 4:34


    These rules and what they meant and when they would be implemented were advertised WELL in advance. I worked with 2 different costs companies delivering seminars and training for months and months before April 2013, all making it really clear the new 3.9 sanctions would apply as at the date of APPLICATION , not date of default.

    It is pathetic of people like you, and anyone connected with the SCCO, to get it so totally wrong

    It’s not about Simon being ‘technically’ right – it’s the rules that exist and were known for a long time before to be coming in

    Your post reveals the biggest truth in all of this – too many fools advising or dealing with rules and regulations you have no clue about. Mitchell demonstrated the same point.

  4. Maybe the learned Master (whose judgment I haven’t seen) was considering “all the circumstances of the case” and one of those “circumstances” was that C delayed making the application when it would have been nailed on for relief in order to ensure the assessment litigation was being “conducted efficiently and at proportionate cost”?

    Surely if the most appropriate way of ensuring efficient and proportionate conduct of litigation was to delay making the application until there was another hearing anyway, then that is a relevant consideration?

  5. there wasnt delay – the issue only became apparrent sometime after the breach occured when costs were being negotiated. The claimant’s had prepared N251 but it seems it wasnt served.

  6. The most over used phrase this week is – you haven’t filed replies you are out of time!

    Yawn, they are optional and if you won’t let me lodge replies then the bill of costs is maintained in full and I have no concessions!

    Does the paying party really think they have hit oil with this argument?

  7. @ costs clerk

    optional, but with a time limit stated clearly

    Replies are to be limited to points of principle, not making concessions, therefor yours wouldn’t stand up anyway.

  8. @ Anonymous 11:24pm

    Wow, you really don’t like people expressing their own opinion on a subject do you?

    I acknowledged that as per the rules Master Rowley was incorrect, however PERSONALLY I am pleased with the decision. Can you please point out what exactly I got wrong? I’m not entirely sure you were able to read my post through the red mist clouding your vision.

    My post reveals nothing other than one practitioner’s feelings towards a particular decision. It is no more representative of the profession as a whole than your post is(thankfully).

  9. @costs clerk, I would be very wary of that approach on a provsiional assesment

    Oh, I am claimant too

    Why not just seek an extension?

  10. @ anonymous 11:24

    “….the biggest truth in all of this…”.

    Really??? Get a grip! Was anonymous ‘4:34′ the second gunman on the grassy knoll?

    If so , I very much hope he attends your next Anger Management Seminar.

    ‘back…and to the left’.

  11. @ Anonymous 10.13 am: The idea that concessions are impermissible in replies to points of dispute is contrary to both common sense and the rules

  12. Summit Navigation Ltd v Generali Romania Asigurare Reasigurare will be rolled out to defendants on monday morning and rightly so!

    Too many defendant cost practitioners wanting a ‘free ride’ on trivial breaches I am delighted with the turnaround!

  13. I suppose this is going off subject a little now but we are preparing full replies to protect the receiving party’s position.

    My view, which appears to be shared by many, is that receiving parties should be given the opportunity to set out their responses to objections in advance of a hearing, many of which can be misconceived.

    To date, I’ve had no problem recovering the costs of full replies, either through negotiation or summary assessment but our replies generally do help to narrow the issues and do not contain blanket denials.

  14. A reply served by the receiving party under Rule 47.13 must be limited to points of principle and concessions only.

  15. Been reading the Summit Navigation case

    This changes things how, other than to highlight bad conduct by someone over a material sanction without particular bite ?

    And whom are these ‘defendant cost practitioners’ taking trivial breaches? I’m tired of getting non-complaint Replies a week before a PA/DA which are clearly no more than a cost building exercise to try and justify a heftier fee. I’m also heartily sick of Claimant costs companies telling me for two weeks they can’t get instructions on my offer then on the day of or before PODS are due telling me what they’d ‘recommend’ but serve the PODS anyway or they have instructions to apply for a DCC (my pods are already done anyway, bad tactic boys n girls!)

    Please. There are rules. The point of the new CPR is to comply with them. The ultimate benefactor is not your own pocket or that of your client, but the Court, whom have to try and manage and control the cost of these cases. Comply broadly and properly with the rules and talk to each other sensibly is the message.

  16. Mitchell means we all have to try and take every pedantic point possible to argue costs should either be struck out or allowed in full. If I act reasonably I am potentially doing my clients a disservice.

    The problem has been brought about by immense stupidity at the top of the judiciary. Publicly announcing “we will uphold tough decisions on appeal” subsequently places Judges in a difficult position by having prejudged cases so even a ridiculous decision such as Mitchell must be upheld. Note to Jackson and co – do not publicly prejudge issues!

    In a nutshell a weak court of appeal overturned Master Hurst’s judgment in Henry but said things will be different under costs budgeting despite the rules being more or less identical (barring the minor changes to CPR1). Following criticism for being too soft the Court of Appeal then get the next big decisions wrong in Mitchell by overreacting with a ridiculously harsh judgment (ironically applying a rule that did not apply in that instance where there was a clear difference between the rules unlike in Henry) that renders proportionality meaningless and reasonable compromise between parties an anachronism.

    I love the fact the Judge had to call the party up!! How dare they have inconvenienced her to that extent. Why she bothered is anyone’s guess as the Claimant reacted immediately and she still knocked out all their costs. If a Judge is on the phone to you I would suggest you may as weel ignore what they say and start looking for alternative employment as your goose is cooked by that stage.

    Anyway enough ranting I am going to take my tablets and get back to my application for a Claimant to be publicly flogged for filing Replies a day late, following by refusing a request to set aside a DCC despite the fact it is about a £100K more than my client should be entitled to.

  17. I know of at least one case in which the Receiving party saw fit not to submit Replies and the Judge Ordered that without FULL replies to the items in dispute the Defendant’s POD’s would be upheld in full. Full and detailed Replies promptly prepared. You can’t make it up!

  18. Have Costs Judges stopped thinking now that they are provisionally assessing bills, I have never been on a Detailed Assessment where the Costs Judge has not had his own opinions of what should be allowed or not despite what is said or in the PODs or Replies!!

  19. PA is the joke I predicted – DDJ’s with more important boxwork spending five minutes with a blunt red pen and doing nothing over points of principle (RTA premature issue 5 days after disclosure of med ev 12 months after accident happened!!)

    Given the court fee involved and expected rise, I’m advising alternatives

  20. Does indemnity costs for beating own Pt 36 offer trump usual limit of £1.5K for provivisional assessment procedure ?

  21. No. Costs are fixed so the differing tests re proportionality and doubt as to whether costs are reasonable are irrelevant. However, the inability of the court to award higher costs on the indemnity basis would usually mean it is nailed on to get an extra 10% on the costs of the main claim.

  22. I cant beleive people moaning about mitchell, how many times have cases been adjourned and/or prolonged because someone didnt comply with an order. The old school approach has gone now, get over it!

    Recently had a so called technical person trying to tell me how to conduct myself. Ooops it costs them when the bill got struck out and I got my costs.

    If you are reading this (and i really hope you are), please take note, on how you shouldnt conduct your cases, oh and it was too easy you did your client a dis-service


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