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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.