Court of Appeal clarifies Mitchell

The courts are “back on track” following new guidance on Mitchell from the Court of Appeal in Denton v TH White Ltd; Decadent Vapours Ltd v Bevan; Utilise TDS Ltd v Davies [2014] EWCA Civ 906 (see p 17).

Ruling in three conjoined appeals where one party had sought relief from sanctions under CPR 3.9, Lord Dyson and Lord Justice Vos set out a three-stage test for relief applications.

The court concluded that Mitchell v News Group Newspapers [2013] EWCA Civ 1537 had been “misunderstood” and “misapplied” by the courts in subsequent cases, although it remained a sound decision.

NLJ columnist Professor Dominic Regan, who assisted Lord Justice Jackson in his civil litigation review, says: “While each of the three judges expressly affirmed Mitchell, it is clear that they recognised it was horrifically counter-productive.

“The abandonment of ‘trivia’ and the new three-step test is to be welcomed. The court said orders should not be issued with abandon. Almighty costs sanctions are threatened against those taking bad points and failing to co-operate. We are back on track.”

In Mitchell, strict sanctions were applied for a missed deadline, leaving Andrew Mitchell MP’s legal team unable to recover more than their court fees in costs. The view that the courts would be strict on case management and impose severe penalties created an incentive for litigators to challenge minor breaches or delays by the opposing party. The case led to uncertainty over application and an increase in satellite litigation.

Under the new three-stage test, judges should: identify that the failure to comply is “serious” or “significant” (previous conduct may be a relevant consideration); consider whether there is a good reason it occurred; consider all the circumstances of the case.

Delivering his judgment, Jackson LJ said “co-operation should be encouraged and satellite litigation should be discouraged”.

He added: “The new rule 3.9…is not intended to introduce a harsh regime of almost zero tolerance, as some commentators have suggested.”

Peter Kaye, partner at Linder Myers Solicitors, who acted for Utilise, says the new guidance provided “fair, and clear, definitions with regards to the weight of breaches clarifying those which will warrant the court’s time and should serve to minimise satellite litigation over trivial matters going forward”.