Appendix II
Appendix II
Correspondence between the claimant and the courts.
1. 8/6/22- Claimant emailed the Central London County Court with some written particulars stating the case in the email.
2. 20/6/22- Claimant emailed C.L.C.C the N1 application of Mary Moss v St Mungo’s Claim form, with cause of action and brief particulars setting out the lack of CCTV
3. 21/6/22- Claimant correctly submitted the EX160
4. 21/6/22- EX160 with N1 claim of Mary Moss & Edward Moss v Chief Constable of the Metropolitan police (Appendix III) wrongly submitted to the CLCC as the claim was for £700K, so advised to resend to QBenquiries@justice.gov.uk but EX160 fine.
5. 22/6/22- 12.08- Claimant emails CLCC that the St Mungo’s one should be fine then.
6. 24/6/22- Email from James Haythorn at CLCC please re-send claims above £50k to Queen’s Bench. Note the court moved on 20th June 2022 and are working incredibly hard to contact all parties for all cases. Claimants can be contacted at short notice the day before a given hearing. All non-urgent matters can be drop boxed at the courts. Use of email permitted by courts in word format 10mb 50 pages, including attachments. The court thanks us for our patience at this extremely difficult time.
7. 22/6/22- 12.08- Claimant emails CLCC that ‘the St Mungos one should be fine then. I look forward to hearing from the Judge regarding a preliminary hearing, once they have been served’.
8. 8/8/22- Second Anniversary of Edwards death, still no evidence of the CCTV, so the claimant brings, now all printed claims to the fee’s office to get sealed but is told to drop them into the CLCC drop box in the main hall. Later that
day HRH Elizabeth II dies.
9. 12/8/22- N1 + EX160 put in the drop box are posted back to the claimant’s address.
10. 15/8/22- Fee’s office Melissa and Vincent tell claimant re the claim, to resubmit.
11. 15/8/22- 15.27- Claimant emails CLCC to tell them she is insulted that they sent back £26 of printing on the 12/08/22 that she had hand delivered and points to the fact that this is an issue now for the administrative courts after 3 months, as the other side, she says have one month to reply ‘or I win’. She sends, a photo of the date stamped claim, as she had a second copy, that she asked CLCC to stamp as evidence. The claimant writes, ‘I was dropping off a printed copy of the paperwork into the drop box, I have not yet received the legal aid certificate, nor has the claim been served to my knowledge. Ref: PA22-035878’
12. 15/8/22- 16.53- Claimant emails to the courts to make them aware of the CLCC errors, ‘Dear King’s Bench, On the 8th Sept 2022, I came to the Queen’s Bench, having printed out the claim and was told to put it into the drop box. Could you please update me. The County Court claim I did get stamped the 8th Sept 22. Please advise when it is served and sealed and when I get a sealed copy. It was very sad that this may have been one of the last claims, served at noon on the day the Queen died.
13. 20/8/22- 12.35- Lola, Queens Bench (now King’s Bench) replied; ‘It would appear this is for the Central London County Court. I have copied them into your email.
14. 22/9/22- 13.25 Claimant replies, asks for clarity, on the other claims at the King’s Bench and says, ‘I also issued a small civil claim to sue St Mungo’s at the Central London County Court, for their front door, corridor and last movements of my brother whom I had seen 20 minutes before, to be handed over to me, as to date they have not. I am in contact with CLCC so no assistance required there.’
15. 23/9/22- 10.18- Mohammed at enquiries at the CLCC emails, ‘Dear Madam, please clarify and provide full copies of what the claim is for.’
16. 23/9/22- 10.20- Claimant emails, ‘Dear Mohammed, please see attached, it’s for suing St Mungo’s for the death of my brother, last year. Kind Regards’ N1 attached.
17. 23/9/22- 10.28- Claimant shortly emails again attaching EX160 also. She says, ‘Here is the EX160 too. This was all sent in June and also delivered in person on 8th Sept 2022. It was checked by James. The timelines are that they still need to be served.’
18. 27/9/22- 13.50- Email from James at CLCC, apologising about confusion asking claimant to send back bank statements and evidence of below threshold income.
19. 27/9/22- 15.12- Claimant sends 7 attachments including previous email and screenshots but also now up to 21st Sept 2022 bank statements to be contemporaneous and helpful to the courts despite delays.
20. 13/10/22- 12.15- Email from Administrative officer Ms Sadaf re the King’s Bench claims.
21. 13/10/22- 12.28- The claimant replies, ‘Thank you for being the issues office. As I understand it, I do not need to submit full particulars at this stage, as I have said in the application. I need the claims to be issued and sealed so that I can serve them and do some pre-action protocol, for example getting the CCTV, so that I can be clearer later in the particulars of claim for the Judge. The claim is for my dead brother and I, so you can change that at a later stage if the Judge disagrees.
22. 25/10/22- 10.28- Email from James at the CLCC thanking the claimant for her patience and also saying, ‘your claim against St Mungo’s and One Housing Group, Charity will be issued today’. James now says that the date of issue will be 20/10/22 and gives the case number as PA22-057949.
23. 25/10/22- The claimant replies, ‘Thank you and you have been most helpful’. No sealed forms were attached or posted to the claimant to serve. The courts may have served the defendant, since they said the claim was issued. It’ll be in the CLCC’s CMS.
24. 22/11/22- The claimant writes to the civil triage to get an appointment but they say that they cannot get the RCJ to seal the claim to serve, if the claimant is in receipt of legal aid, (fee remission) they cannot give the claimant any help or an appointment. The claimant writes back to; civiltriage@rcjadvice.org.uk ‘I have quoted your advice to many solicitors on the useful link you sent me. They said is no such thing as a solicitor that holds a legal aid certificate, for a civil case, and so I am unrepresented. I believe, I fulfil your criteria. I attach the claims I made in June 2022 that have still not been served. I have had ping pong from RCJ. Please can you me help serve them. I could die if not.’ The claimant researches helpful organisations including pro-bono.
25. 1/12/22- 11.42- To give the CLCC an opportunity to re-send the sealed claim to her the claimant emails CLCC, ‘Dear James, since giving you all the documents required, I have heard nothing about my claim against St Mungo’s Housing Association?’
26. 2/12/22- The claimant emails complaints at RCJ (although she actually emailed support through court) that the claim hasn’t been actioned by way of sending the fee remission certificate nor sealing the claim or any knowledge of serving the claim to the defendant by the courts. She emailed, ‘I hope you can help to get them served’
27. 5/12/22- The claimant then paid a reasonable sum of money to an organization called the ‘McKenzie Friend’ to double her efforts and provide proof of the claim being received by the CLCC, then issued and replied to by the defendant St Mungo’s.
28. 6/12/22- the McKenzie Friend emailed, ‘Please see email below. We have confirmation that the courts have downloaded the documents’, ‘Downloaded Urgent Triage’ ‘Please see documents attached on behalf of our client Mary Moss. Please respond to Ms Moss directly as we are not performing litigation on her behalf. Please confirm receipt.’ The claimant replies to the McKenzie friend, ‘Thank you, I will let you know if the CLCC email me back directly, or seal and serve claims, as well as email me the fee remission certificates.’
This is all the claimant can do now, apart from let St Mungo’s know by way of email, and to at least put them on ‘Notice’ of an impending claim, the claimant cannot yet serve, without it being sealed and the claimant doesn’t know of courts service status at that stage, despite her efforts.
Please see ‘Appendix IV’ for the complete list of dated emails sent to St Mungo’s for the CCTV and the avoidance emails for producing the CCTV back from the defendant. There, this email is in chronological order, dated 4/12/22, to then new Director as the previous Director Steve Douglas, sadly, in his 50’s suddenly died, during Edwards inquest. This gave the defendant officially ‘Notice’ of the claim;
Sent: 04 December 2022 14:06
To: Rebecca Sycamore <Rebecca.Sycamore@MUNGOS.ORG>
Subject: Notice
Dear Rebecca,
I am putting you on notice of my intention to litigate against St Mungos.
St Mungo’s –Particulars in Brief-
Regarding death 8th Sept 2021 of my brother Edward Moss.
False imprisonment and sedation
Attempt to ruin Edward's reputation
Collaboration with the police and mental health team to falsely imprison and create inaccurate documents
Incompetence and lack of training of staff, to save life of vulnerable residents and prevent dealing on the premises
Cover up of my brother’s murder and failure to tell the family of his death in a timely and humane manner
You can choose to respond in person or not.
Kind Regards
Mary Moss
The email was acknowledged by the person who continued to evade Appendix VI giving us the CCTV the coroner had directed, however it’s an acknowledgment of service, it puts the defendant on notice, it would mean they would have to tell their insured regarding a claim as is in all insurance policies. So St Mungo’s without a sealed claim, which neither the claimant had either, cannot state that in May or June or even July 2023 they had first notice. Set aside was always a contemptuous action.
12/12/22- 09.33
Your email has been forwarded to me to respond to.
Firstly, can I reiterate again how sorry I am for the loss of your brother.
As you are aware, St Mungo’s cooperated fully with the inquest process at the time in terms of the information provided and we don’t feel there is anything further to add at this stage.
I am continuing to follow up with IT colleagues to see if we are able obtain the CCTV footage of your brother in a viewable format for you. I will keep you posted as I hear back.
With kindest regards,
Claire
29. 17/2/23- 72 days later- The Mckenzie Friend emails the claimant. ‘We have now received correspondence from the court’s’. The CLCC sent an email to the McKenzie Friend dated 14/2/23 at 12.01 which reads; ‘Thank you for your email, and apologies for the delay in response. I am unable to see that your claim has been issued on the court system and the email you sent on 6/12/22 with the transfer link to your documents has expired. If you could kindly resend the documents to me, I will arrange for your case to be processed. Kind Regards Administration Officer Customer Care Team Central London County Court.
30. 17/2/23- McKenzie Friend emails- To whom it may concern, please see documents as requested. For future correspondence please deal directly with the applicant. The attachments including N1 and EX160 were also sent to the CLCC.
31. 21/2/23- Following an official court complaint by the claimant of 2/12/22 which should have been replied to as is protocol within 10 days or within receipt of all documents or questions asked by them, should then answered within 10 days, the claimant gets this email at 11.57am; ‘Thank you for your complaint received 2nd December 2022. Complaint Reference; 35350173. I would like to thank you for bringing the matter to our attention. Re-submit how you lodged the claims. We will not consider the response timescale until it’s received in this link, for ten working days after.’ The claimant uses the link sending the ways the claims were submitted.
32. 1/3/23- Gary Purser, Team Leader CLCC Back Office Manager, duplicates the above email of the 21.2.23 with the reference 35350173 and sends this to the claimant.
33. 14/3/23- 10.44- The Administration Team at Customer Care CLCC emails the claimant; ‘In response to email 17.2.23 from McKenzie Friend. The administration officer in the customer care team writes one line; ‘Please process claim and HWF’ he copies the claimant in.
34. 17/3/23- 12.00- Enquiries at CLCC, James, emails the claimant, ‘Thank you for your email, we are unable to open the word doc’s please resend with any supporting evidence also attached.
35. 23/5/23- CLCC posted the sealed ‘Notice of Issue’ to the parties.
36. 24/5/23- 0.56am- The notice of issue was for ‘One Housing Group + St Mungo’s’, the claimant could not serve this. She emailed the CLCC, thanking them for the post and ‘Notice of Issue’, stating that, ‘it clearly said on the N1 form, St Mungo’s Community Housing Association, Address: 3. Thomas More Square, Tower Hill London; Postcode: E1 1YW. Can you send me another Notice of Issue that has; St Mungo’s Community Housing Association as the defendant. Could you send it immediately by post.’
37. 24/5/23- 4.11pm- Claimant receives an email from CLCC asking for the second defendants address and the claimant replies immediately, ‘there is just one defendant and can you re-issue without the charities housing association title.
38. 6/6/23- 09.37am Claimant emails CLCC, ‘Thank you for issuing the correct name, ‘St Mungo’s’ could I ask that you re-send them, the defendant, with their correct name, so that they have the correct seal, for their historical records. A duplicate copy of the issue and the date of issue will suffice. With Kind Regards.
39. 15/6/23- Bearing in mind that the defendant had received the sealed claim on 24/6/23 like the claimant did, the claimant emailed to County Court having filled in the attached, part of the sealed ‘Notice of Issue’, to be returned by post or in person and she had chosen to return that part in person, at the CLCC, whom had told her they couldn’t stamp it but to put it into the drop box. However, to ensure receipt the claimant emailed for acknowledgment and she also enquired if it meant as she had understood it, to be, that after, no correspondence, from the defendant, that she had won the claim by default.’ The claimant needed clarity on this by the CLCC.
40. 23/6/23- 11.10- The day before the full month and 28 days without any response from the defendant, the Claimant emailed the Central London County Court, giving bank details and ensuring that they knew the money would go towards the claimant’s community interest company, for the record, which the deceased, her brother, was a director of before he died. (Please skip to point 55 for email continued.) The claimant also emailed CLCC later in the day after a phone call,
23/6/23- 14.32 ‘Thank you for taking my call today and for explaining that the claim was re-sent to the defendant on the 27th May 2023 correcting the name to 'St Mungo's', for short and not 'Community Housing Association' it's status.
You also said that St Mungo's had not defended the claim and so I should email to ask for a default judgement so that they can pay us.
I am emailing to formally ask for a judgement.
As I will be away on a health vacation from July, due to a thoracic and lumbar spinal cord and consequential heart and chest injury and have been advised to build up some upper core strength through swimming and cycling and to de-stress and see an ophthalmologist, could any correspondence, be also sent by email until Sept 2023.’
41. 7th August 2023- Two weeks later, after the request and after the deadline 24/6/23 for the default judgement to be issued by a Judge, a sealed, default Judgment was post to the parties as (Judgement for the claimant in default).
42. With ostensibly and in effect, inaction identical to the prevarication and obstructions to show the CCTV, to the family, prolonging their grief and understanding as to what had happened to their brother, this was a complacent, ‘no show’, response, as to form, from St Mungo’s.
43. Moreover, and more importantly for them, they had this time made an error, even with legal representation and advice, as the defendant had 14 days where they could still apply for a set-aside, taking them up to the 21st August 2023, after the default judgement but failed to apply.
-You must act promptly in applying to set aside the judgment (usually with 14 days) explain that you had a good reason for missing the hearing, and would have had a reasonable prospect of success at the hearing-
44. 25th August 2023 the defendants solicitors Ashford’s LLP, came to light and claimed their ‘good reason’ was due to ‘inadvertence’ which is not a legal defence to set aside and neither did that word, take into account of the claimants families, now long standing attempts, to find out how Edward their brother had died, endorsed by the Inner North London Coroner Sarah Bourke, at the first day of the two day inquest, on 19th April 2022 finalising in May 2022 , where she had stated and the defendants were present, bearing in mind up until that point there had been no disclosure to the coroner whatsoever except for notes, from the defendant.
19th April 2022, Coroner Sarah Bourke helpfully said at the inquest,
‘With regard to the Video footage, so, the CCTV and the body worn video, as I’ve said those are items that can be requested from St Mungo’s and the Metropolitan police, and certainly I expressed the view that access should be given to the family, for viewing that, particularly given the clear grief that you are all going through and if they take my view again, I’ll reiterate that position, I’ve already issued a direction for the fact but I will reinforce that.’
The coroner also then helpfully wrote to the defendant,
‘The service manager (who gave evidence on 19/04/2022) has said that the footage is still available and that the family can view it. Should the family make a request, I confirm that I have no objections to St Mungo’s showing the footage’
45. Appendix IV show the Chronology of emails sent to the defendant by the claimant on behalf of now sadly, six of the seven siblings, of this extremely close family, as noted by the coroner and all the replies from the defendant, over many painful months to avoid showing the family the video footage making what can only be seen as technical reasons to do with the footage and the machine it was on being transferred from, to the USB keys.
46. Even the police have asked St Mungo’s to keep the USB keys, in case they were needed at a later, stage they said.
47. Court case, Moss v St Mungo’s going forward could be the time to order that kept, disclosure, to get those copies of the USB keys, on disclosure and to end the suffering of the family or to take further action, in this case, with better particulars.
48. If Hanson Solicitors have had access to the footage, as they showed up, at Edwards inquest, so too should the family. The solicitor’s offices, including administration staff, do not have privilege to access the footage, where-as the coroner gave the family access and wrote to St Mungo’s to comply with her directive to show his last moments in the multiple camera areas, he was last seen.
49. There are many ways as seen on the news, to show pixelated images of those people, whom are no part of what the family needs to see. This CCTV evidence was requested strictly due to their grief and the suspicions expressed and evidenced at the inquest.
50. The family before Edwards sudden death, had already gone down a two-year long road, of the mal-administrative treatment of Edward the subject of complaints, (King’s Bench claims; Moss v PHSO and Moss v Metropolitan Police), in part liability of St Mungo’s but moreover after seeing him, despite them hiding him, for 4 days, poor Edward’s brutalised face at the morgue raised even more alarm.
51. Redacting others in the footage or even getting their permission, was requested by the family initially but nothing was attempted or completed by the defendant at any stage at all, even to this day.
52. When St Mungo’s legal team Ashford’s LLP, solicitors for the insured stepped in on 25th August 2023, only after the default judgement was made by the CLCC dated the 7th August 2023 the solicitor was bullish and weaponised costs as a threat to the grieving family, without mentioning once the CCTV or even so much as making a proper application (draft) of their N244 and paying the fee. They sent the draft to the claimant asking them to agree, a set aside, as they believed the claimants had ‘no prospect of success’ and ‘no cause of action or grounds for complaint’ just standard CPR language. They then, wrote the statements, for staff as ‘witness statements’ in which they addressed procedural points only they knew. It’s just a game to them.
53. Nothing they have done to date can be seen as procedural and is not only out of time 14 days after the default judgement but is now contempt of court as enforcement was actioned.
54. Following on from point 40 above to come back to the order of events, by way of emails with the CLCC and the defendant’s solicitors.
55. 7/8/23- 17.33- Email from CLCC ‘I attach a copy of the judgment in default now entered against St Mungo's. With regard to your email of 23 June 2023, it is for St Mungo's to arrange payment direct to you. If they do not pay, you may wish to enforce the judgement - please see the information at this link: What to do if you have a judgement but the defendant has not paid (EX321) - GOV.UK (www.gov.uk)
I should also inform you that St Mungo's may apply to the court to have the judgment set aside. If they do, you will receive a copy of the application with a hearing date. You should attend that hearing to explain to the Judge why the judgment should not be set aside.
56. 9/8/23- 17.03 Claimant emails CLCC, ‘Thank you for this it's much appreciated. I don't see how a Judgement should be set aside if they have failed to represent themselves in the serious issues of the lack of CCTV being provided and of the unexplained reason's Edward was battered when found in the morgue. However thank the Judge and I thank you the courts for the handling of the case so far. How many days do they have to apply? Kind Regards
57. 9/8/23- 18.55- I have now read the procedure and realise they would need a good reason not to have defended the claim.
Clearly as an organisation of means, they won't play any games. Also they would apply 'promptly', if they were to take advantage. Thank you again.
58. 17/08/23- Claimant emails to St Mungo, ‘Payment In Full’, ‘In light of the default Judgement and 10 days having passed since the 7th August 2023 and with two weeks to go, to pay in full, where no CCJ will be entered, could I ask you to note that the address on the attached says (redacted), as is correct.
May I also ask that you pay by bacs transfer to; (redacted).
59. 25/08/23- 09.09- A new correspondence from St Mungo’s is received in reply to claimant’s email of the 17/08/23 above by way of email from solicitors called Ashford’s LLP of Exeter and the tone is not conciliatory or helpful but combative.
The email reads as a Title URGENT and states,
25August 2023
STRICTLY PRIVATE AND CONFIDENTIAL
Mary Moss 32 Tonbridge House
Tonbridge Street London
WC1H 9PB
Your Ref:
Our Ref: Email:Direct Dial:
LAF/LJT/349715-00073l.fitton@ashfords.co.uk01392 333823
URGENT ACTION REQUIRED ALSO BY EMAIL TO: marymossboss@outlook.com
Dear Mary Moss
Claim Number: K01CL630 -Mary Moss -v-St Mungo
Community Housing Association
We act for St Mungo
Community Housing Association and have been instructed in connection with the above matter.
Please note our interest in the matter and direct all future correspondence to this firm using the contact details set out above. 1.Introduction
1.1.From the outset, we wish to express our sincere condolences for the loss of your brother.
1.2.Our client would like to assure you that I tremains committed to addressing any complaints you might have. However, those complaints must be advanced in the appropriate forum. Owing to a number of fundamental legal and procedural flaws (more on which below), our client considers that the Default Judgment dated 7 August 2023 must be set aside.
Further, Claim K01CL630(the "Claim")is liable to be struck out as you have failed to disclose any reasonable grounds for bringing a claim against our client.
1.3. With that in mind, the purpose of this letter is to set out our client's proposal for the early resolution of the matter without the need for escalation, which will ultimately be to the benefit of neither party.
2. Background2.
1.On or around 21 October 2022, you issued the Claim against our client. Your brief details of claim were listed as follows:
35201913.1
"False imprisonment and sedation
Attempt to ruin Edward's reputation
Collaboration with the police and mental health team to falsly imprison and create inaccurate documents.
Incompedence and lack of training of staff, to save life of vulnerable residents and prevent dealing on the premises.
Cover up of my brothers murder and failure to tell the family of his death in a timely and humane manner"
2.2. Our client was not served with a copy of the Claim Form at the material time.
2.3. On, or around 12 July 2023 (some 9 months after the Claim was issued), our client received a letter from the Court enclosing a copy of the Claim Form. This was apparently sent to our client at your request.
2.4. On 7 August 2023, the Court entered a Default Judgment against our client for the sum of £40,000.00. A copy of the Default Judgment was received by our client on or around 14 August 2023.3.
Our Client's Position
The Default Judgment 3.1.Pursuant to CPR 13.2,
the Court must set aside a Default Judgment if it was wrongly entered because the Claimant failed to satisfy the conditions set out at CPR 12.3.
For the reasons set out below (but without limitation), it is our client's case that you failed to satisfy the conditions set out in CPR 12.3 such that the Default Judgment was wrongly entered and must now be set aside:
3.1.1. Within your Claim Form, you expressly state that:
"The full claim will follow with full particulars in due course once the claim has been accepted by the courts and we engage with the defendents solicitors" You were required to serve the Particulars of Claim upon our client within 14 days of service of the Claim Form(CPR 7.4(1)(b)) but failed to do so.
It follows that you were not entitled to obtain a Default Judgment as the period in which our client was required to file its Defence pursuant to CPR 15.4(1) had not expired.
3.1.2. In any event, you were required to serve the Claim Form and Particulars of Claim upon our client no later than 4 calendar months after the Claim was issued on 21 October 2022 (CPR 7.4(2) and 7.5(1)). You failed to do so.
On that basis, the requirement for our client to file its Defence was not triggered and the Claim is liable to be struck out. 3.1.
3. Further or in the alternative, even if the Claim Form and Particulars of Claim were correctly served, our client will aver that the Claim was automatically stayed pursuant to CPR 15.11 as a period of 6 months had passed since the end of the period for our client to file its Defence and (a) our client had not filed a Defence; and (b) you had not applied for Default Judgment. It follows that you would have been required to apply to lift the stay before you could seek a Default Judgment against our client.
35201913.1
3.1.4.We note that the Claim includes allegations of defamation. The County Court does not have jurisdiction to hear and determine a defamation action. 3.2. The Court can also exercise its discretion to set aside a Default Judgment where it is satisfied that the Defendant has a real prospect of successfully defending the claim; or it appears to the Court that there is some other good reason why
(a) the Judgment should be set aside; or
(b) the Defendant should be allowed to defend the claim.
Given our client's primary position that the Default Judgment must be set aside as a result of the numerous procedural flaws set out at paragraphs 3.1.1to 3.1.4 above, we do not propose to address the discretionary grounds that exist for setting the Default Judgment aside. We reserve the right to further particularise our client's position should it prove necessary to do so in due course. The Claim
3.3. Whilst it is abundantly clear that the Default Judgment must now be set aside, our client also considers that the Claim ought to be dismissed at the same time.
3.4. As stated above, you were required to serve the Claim Form and Particulars of Claim upon our client no later than 4 calendar months after the Claim was issued on 21 October 2022.You failed to do so such that the Claim is liable to be struck out.
3.5. Further and in any event, you have failed to identify a valid cause of action against our client. The issues complained of are unparticularised and entirely unsupported by any evidence. They are also unsuitable for determination by a Civil Court.
3.6. Our client therefore considers that the Claim ought to be struck out pursuant to CPR 3.4(2)(a)-(c)on the basis that: 3.6.1.The Claim Form discloses no reasonable grounds for bringing the Claim; 3.6.2.The Claim is an abuse of the Court’s process or is otherwise likely to obstruct the just disposal of the proceedings; and 3.6.
3. As highlighted in this letter, you have committed multiple breaches of the Civil Procedure Rules with regard to the service of documents. 4.Next Steps 4.1.We now have instructions to make an application to the Court to have the Default Judgment set aside and the Claim struck out. Our client considers that you have no reasonable basis upon which to oppose that application.
4. 2.With that in mind, we hereby invite you to reconsider your position in light of the contents of this letter and confirm that you consent to the Default Judgment being set aside and the Claim being dismissed (with the parties to bear their own costs).
4. 3. Please confirm your position by no later than 12pm on 29 August 2023. If you are in agreement with our client's proposed resolution, we will prepare a Consent Order to be filed at Court.
35201913.1
4.4. Should you choose to oppose our client's application or otherwise fail to respond to this letter by the stipulated deadline, we shall immediately file the application at Court without further notice to you. Whilst our client hopes to avoid the need for a contested application, we are instructed to seek full recovery of our client's costs of that exercise should it prove necessary. We therefore reserve the right to bring this letter to the attention of the Court on the question of costs and conduct.
4.5. We urge you to take independent legal advice.
Yours faithfully ASHFORDS LLP
60. 26/08/23- 11.08- Bearing in mind that the 25thAugust was the start of the bank holiday weekend and the solicitors albeit late into the proceeding had finally emailed, and so the claimant made a quick acknowledgment but preferred to address the email after the holidays on Tuesday morning. The claimant emailed,
Dear Ashford’s,
See you in court at your earliest opportunity, I'm sure a Judge will observe proper process.
Have A GOOD WEEKEND
61. 29/08/23- 08.25-12 days after emailing St Mungo’s for payment in full or for the CCTV as the claimant had made clear was the families paramount need, with this not being addressed by the St Mungo’s but instead an instruction from them to send a combative letter of alleged CPR technicalities and vague technically important dates, bearing in mind the gravity of the causes of action, the good conduct of the claimant and allowances, if at all were needed, that any CPR had been allegedly wrong, and that the family were bereaved litigants in person, dealing gracefully and patiently with an overwhelmed CLCC, whom had also just moved. St Mungo’s letter was a frivolous game to win, showing contempt of court and costed only Friday email not even a court fee paid application! Therefore, seeing that this was just to waste time and for St Mungo’s to remain non-engaged with court processes, the claimant emailed as advised by the CLCC, the Court Enforcement; ‘Dear CDER, Can you give me a quote please to enforce a CCJ as soon as possible and preferably early this week? Please see attached CCJ for £40,000. The defendant may then engage properly, fairly and with good conduct only when the claimants exercised their legal right to enforce. Albeit appropriate as the defendant later emailed or not this was given rise to the inhumane game playing, combative defensiveness of St Mungo’s.
62. 29/08/23- 09.23- ‘Thank you for your enquiry. I would be delighted to assist you with the enforcement of your CCJ by High Court Writ of Control. I have provided an overview of our service below, which I hope will assist. The claimant paid and enforced the same day. A writ of control was then sent up to the High Courts.
63. 29/08/23- 15.23- Claimant emails St Mungo’s solicitors forwarding an email to put the defendant in full knowledge of delays with the courts being partially attributed to any delays in issue of the claims, she also emails them to make a part 36 offer knowing that the defendant’s solicitors would understand this to be an offer to have the CCTV in full at this stage, although since we were not yet officially in an arena of a court case to make it, the claimant still emailed making this clear;
‘This is more evidence of the claim being delayed by the courts between Oct 2022 to May 2023, again not my fault. My conduct has been nothing but patient in the face of simply wanting the CCTV. The coroner said in May 2022 we could see the CCTV and bodyworn police footage and the police asked you to keep it. As it stands we have no timeline of how events caught on your CCTV led to our brothers death.
How then can we be satisfied?
I put you on notice in Dec 2022 after many frustrating emails from your client, in the region of about 25 emails back and forth.
If you can provide me with the CCTV then I will consider all other claims as secondary and more to do with the frustration on how you have actively hidden what happened to my brother.
Our peace of mind is paramount.
If you will not be helpful and you will just play games, to avoid process, then I am putting you on notice I will up the claim.’ - ‘31/05/23- 16.08- HM Courts and ‘Tribunals Service <replies@optic.justice.gov.uk>
Dear Ms Moss
Thank you for your recent complaint received on 2 December 2022 about your three claim forms not being served.
I am the Team Leader, and I am writing in response to your complaint.
I have investigated your complaint and had to ask you for further information on March 2023. I received no reply to that request. I have managed to find out the following information concerning your complaint.
Two of the N1 claim forms that you sent to the Central London County Court were marked Queen's Bench and were of a value that the County Court had no jurisdiction to deal with. These were returned to you on 21 June 2023 for you to issue at the Queen's Bench.
The third claim form which could be issued at Central London County Court was also returned to you on 21 June 2023 as there were issues with the forms.
The Claim form was returned to you again on 9 September 2022 as you had used the wrong Claim form.
The Claim form was returned to you yet again on 22 September 2022 as you had not included any evidence of your benefits and the fee remission could not be processed.
The Claim form was taken on the 27 September 2022 using proof of income rather than evidence of benefits and the fee remission granted on 25 October 2022.
The case was created on 3 May 2023 with case number K01CL630.
I am sorry that it took so long to issue case K01CL630, the initial delays were caused by the issues with your claim form. The delay between October 2022 and May 2023 was due to issues with the Court. The cases at Central County Court are created and issued at another Court and returned to Central London. The other Court unfortunately stopped doing this work but retained the files there and did not inform Central London that they had not created the files. This led to a backlog of files that needed issuing.
I would like to sincerely apologise on behalf of the courtfor the poor service you have received in relation to this case, and the delays in the processing of your correspondence. We are currently in the process of reviewing all aspects of the Court’ administration in a bid to improve the service we provide to our customers to ensure instances like this do not happen again. The feedback that you have provided will be included in that review and we hope that our customers will see an improvement in the coming months.
If you're unhappy with my response
If you're unhappy with the way I've handled your complaint, you can ask our Operations Manager to review it. Just write to them at this address with details of why you're not happy:
AT CENTRAL LONDON, THOMAS MORE BUILDING , ROYAL COURTS OF JUSTICE , STRAND, LONDON, WC2A 2LL
They will get back to you within 10 working days.
Yours sincerely
Gary Purser
Team Leader
Central London
County, Back Office Manager | HMCTS | COUNTY COURT AT CENTRAL
LONDON THOMAS MORE BUILDING , ROYAL COURTS OF JUSTICE , STRAND, LONDON, WC2A
2LL
Phone: 0300 123 5577 ‘ -
31/05/23- 18.31- The email reply to Complaints from the claimant forwarded to Ashford’s LLP on 29/8/23
‘I acknowledge your email and thank you for your apology, which I accept. I will check the fine details later on tomorrow or next week.
Please could you resend the March 2023 email as I never got it.
Kind Regards’
64. 1/9/23- 09.22- Mungo’s replied and they attached a notice of change of solicitor; N434. Then emails, ‘For completeness, we enclose a Notice of Acting. A copy of the same will also be filed at Court. We write further to our letter dated 25 August 2023 and your email response (Moss/Fitton) dated 26 August 2023 timed at 11:09. In our letter, we carefully set out the reasons why we consider that the default judgment in the above mentioned claim should be set aside. Your response in your above mentioned email (the subject of which was labelled: “Happy to Oblique”) simply stated: Dear Ashfords,See you in court at your earliest opportunity, I'm sure a Judge will observe proper process.Have A GOOD WEEKENDMary Moss”We understand this to be a refusal of the request for consent for the default judgment to be set aside and for your claim to be dismissed. Accordingly, we are now instructed to proceed with the Application. Whilst we recognise the understandable strength of feeling in relation to the claim you have advanced(which for the avoidance of doubt is, insofar as it can be understood, denied) we consider there are compelling reasons for judgment to be set aside, even if you remain opposed to the claim being dismissed. As such, in an effort to reduce costs and to limit the issues that the Court will need to deal with, we are instructed to give you a further opportunity to consent to the default judgment being setaside (for the reasons previously articulated).
1. For the avoidance of doubt, the default judgment being set aside can be dealt with entirely separately from the dismissal (or otherwise) of the claim. It is therefore possiblefor you to consent to the set aside but maintain your position that your claim should still stand. Our client would then have an opportunity to defend the claim (or seek to have it struck out). We urge you to carefully consider consenting to the proposal that the default judgment is set aside and strongly recommend that you seek independent legal advice. To be clear, if you consent to the set aside, you will still be able to pursue your claim notwithstanding that our client will maintain its strike-out application. We will now proceed with the application for both set aside and strike-out, however, if you confirm that you agree to the default judgment being set aside by no later than 4pm on 6 September 2023, our client will not pursue the costs of the set aside element of the application from you. If you continue to refuse to provide consent, or provide consent after that date, our client will seek recovery of the costs incurred,from you. We look forward to hearing from you as a matter of urgency an in any event by no later than 4pm on 6 September 2023.’ – The claimant on
1/9/23- 15.04- replies by email,
‘Dear Liam,
I meant 'Oblique' as in; not expressed or done in a direct way,
in my initial instant reply to your shocking tactic's trying to set aside the judgement after absolutely no response from any solicitors at all.
That being a game and I was happy, to be non-expressive, and see you finally in court, to get disclosure of the CCTV!
However, past that initial response, since that was on a Friday of a bank holiday as is the pathetic games, law firms play, as if I don't know this, I also said, have a good 'bank holiday weekend'.
I note there is an attachment for A CHANGE OF SOLICTORS,
pray tell who were the first lot?
It may suit you to be non-communicative, inhumane, non-disclosing, therefore to put my family through a game but please also tell me that you did not get Tuesday's 29/08/23 emails? After after the bank holiday and if not they are attached and please try communication, not games, as law firms are looking for the win and that is well known but it won't help playing.
As I said I want the CCTV and the coroner said I can have it.
Please respond to that by 6th Sept 2023 with a timeline disclosure of the moments leading up to Edward's death and after in the 8 hours you failed to even tell me leaving him dead in his room, when I had seen him the evening before?
Until then I am not playing 'Friday night games' with you and I am out of the country in France Nice, until the evening of the 6th Sept 2023, so I can only deal with communication's from you after that. As is reasonable. If you try anything before then, we will just put this in front of the Judge and since judges don't like people fighting in their courts, you can hold on until then and avoid your own costs.
Please see attached.
Kind Regards
1/9/23- 15.13- A fully insured St Mungo’s, claim not to have engaged solicitors.’ Dear Ms Moss
Notice of Change of Legal Representative is the name given to Form N434 by HMCTS. It can be used when notifying of a change of solicitor as well as notifying when a solicitor comes on to the Court record where the party was previously unrepresented. In this case, the N434 was used for the latter purpose. Our client had not instructed solicitors in relation to your claim prior to instructing this firm.
I can confirm safe receipt of your two emails received on Tuesday 29 August 2023 at 14:34 and 15:23 respectively.
I shall seek instructions on the remainder of your email.
Kind regards
The out of court part 36 offer emails of 29th August the solicitors had ignored to cause a scene for the courts and their technical case attached as a screenshot.
‘Dear Luke,
This is more evidence of the claim being delayed by the courts between Oct 2022 to May 2023, again not my fault.
My conduct has been nothing but patient in the face of simply wanting the CCTV. The coroner said in May 2022 we could see the CCTV and bodyworn police footage and the police asked you to keep it. As it stands we have no timeline of how events caught on your CCTV led to our brothers death.
How then can we be satisfied?
I put you on notice in Dec 2022 after many frustrating emails from your client, in the region of about 25 emails back and forth.
If you can provide me with the CCTV then I will consider all other claims as secondary and more to do with the frustration on how you have actively hidden what happened to my brother.
Our peace of mind is paramount.
If you will not be helpful and you will just play games, to avoid process, then I am putting you on notice I will up the claim.’
St Mungo’s attach irrelevant documents to again dismiss Edwards death without CCTV disclosure. Issues to be addressed in full particulars of claim.
Section 8 of the Misuse of Drugs Act 1971 is attached with irrelevant sections of the two-day coroners hearing that don’t pertain to the CCTV or Edwards reputation.
Appendix III
Appendix VI
After the first day of the Edward Moss inquest, on 19th April 2022, emails were sent to the defendant requesting the CCTV of Edward coming back to Endell Street, from his sister Mary’s at 6pm and the footage up until his death, including when his body left them.
There is CCTV upon entrance, in reception, on the stairs, in the back yard and there are several CCTV cameras in the male resident’s corridors, where Edward’s room was at 103.
Up until that point there had been no disclosure except for notes from the defendant.
The coroner had helpfully said on the 19th April 2022, ‘With regard to the Video footage, so, the CCTV and the body worn video, as I’ve said those are items that can be requested from St Mungo’s and the Metropolitan police, and certainly I expressed the view that access should be given to the family, for viewing that, particularly given the clear grief that you are all going through and if they take my view again, I’ll reiterate that position, I’ve already issued a direction for the fact but I will reinforce that.’
The coroner also helpfully wrote to the defendant,
‘The service manager (who gave evidence on 19/04/2022) has said that the footage is still available and that the family can view it. Should the family make a request, I confirm that I have no objections to St Mungo’s showing the footage’
22nd April 2022 – 09.24am Mary Edward’s sister emails regarding the CCTV - ‘I hope the other customers will be able to give informed consent as soon as is reasonably possible to ask them and for you to feel able to help them understand why this is so important to us.’
22nd April 2022 – 16.11pm defendant replies from ‘Information Security’, ‘we are unable to share the CCTV footage with you as it is a breach of other client’s personal data and privacy’
27th April 2022 – 07.13am Mary email’s – ‘Have you had a chance to ask the clients?’
‘Also, legal people do not have permission to see personal images on private property either, is that correct?
There is no such thing as legal privilege as the teams are big and that image needs permission from you clients too.
Otherwise, that is a 'data protection crime' and should be reported to the police.’
28th April 2022 – 02.10am defendant replies, ‘I still need to review the footage and see if it is possible to edit it to remove other clients.’
29th April 2022 – 14.26pm Mary emails, ‘Can you please send the screen shot of the CCTV.’
03 May 2022 – 08.26am the defendant emails, ‘I am expecting to receive the CCTV footage tomorrow, I will review it and get back to you before the end of the week’.
The footage was with Hanson solicitors as they were un-invited also at the 2-day inquest.
04 May 2022 – 12.38pm Mary emails ‘I hope you don't find yourself in contempt of court? It is clear you have made us suffer and the quicker we can see the footage the less grief we have to experience. You should have told me he was dead, what you did was disgraceful.’
05 May 2022 – 11.13am the defendant emails ‘ My understanding from the coroner’s office is that they have not yet given their final outcome. They told me this morning that they intend to do so by the end of the week.
Once, they have done this, we will share any CCTV of Edward in the corridor that we can.
05 May 2022 –17.20pm Mary emails ‘That seems strange that you have stalled and now are saying you will wait until the outcome?’ (the CCTV was relevant disclosure for the inquest).
10th May 2022 – 14.06pm the defendant emails, ‘I wanted to send you this quick email so that you are aware we have not forgotten your request and are working on it this week’
12th May 2022 – 07.33am defendant emails, ‘IT advisor looking at USB memory stick, we are still unable to make the footage on the USB stick play. We will look at the original CCTV unit.
13th May 2022 – 11.09am Mary emails,’ I will be in touch with my MP and the coroner, the painful slowness is a wonder to humanity, what a disgrace.’
17th May 2022 – 11.58am defendant emails, ‘My efforts to view the footage on the device it was downloaded on have been unsuccessful. An IT technician will visit the site and restore
18th May 2022 –23.11pm Mary emails, ‘We have got until the 21st May’ (inquest disclosure).
19th May 2022 – 08.48am Mary email’s, ‘I use Stanley’s, TV Set just near you to retrieve data. Then where will I actually view the footage, at the St Mungo's head office or at the solictor's, Hampson's or at St Mungo's Covent Garden?
19th May 2022 – 10.03am the defendant emails ‘Unfortunately, if the footage was downloaded to a CD or USB, you (or anyone) would not be able to play it. This is because of the type of software the CCTV system uses and is the reason I have been unable to play the footage at our central office
19th May 2022 – 10.28am Mary email’s ‘This has been two weeks already and the 21st when the coroner is able to conclude you are aware, is Sunday. The trust has been broken a long time ago when you did not tell us of Edwards death and now the odd delays with the CCTV but you could get this done today, couldn't you before the 21st?
It could help restore some humanity into the equation. Everyday leaves a mystery.
19th May 2022 – 10.28am the defendant emailed ‘Thank you for your email. Unfortuantely, I am not very well today and am not able to be at work.’ Even though the same defendant had sent Mary an evasive lengthy email 25 minutes earlier.
Meanwhile the second part of the inquest took place.
The conclusion, mixed drug and alcohol use, an evening £10 heroin painkiller for his back, mixed with a bottle of wine he consumed at 5pm and £20 of cocaine he had that morning! The toxicology report had never recorded a death before with such low and legal levels.
This was despite the fact the CCTV was never produced and a witness with the defibrillator, was withheld in statements. His face was clearly assaulted as it was black and swollen. Blood was in his lungs, which is impossible after death and he was face down, seen in just 7% of deaths. There was no mercy call to the family and then his body was hidden for 4 days.
25th May 2022 – defendant emails, ‘The attached two clips of Edward on CCTV’ (This is 11 seconds of zoomed in from a mobile phone to a TV screen, footage from two camera’s, the back of Edward and the front of Edward.
However the CCTV shows Edward earlier that morning noted by Mary from his clothing when he met Mary at around 9am and since Mary had seen him then again at 6pm, he had changed his clothes and was now wearing a cream polo top and a suit jacket, he did not have slippers on, nor track suit bottom lounge wear, as shown in this short CCTV footage as he had just left Mary’s on a Mountain bike, with outdoor shoes on and was fit and jolly, having said he had just had a bottle of prosecco wine, kissing his hand in the air goodbye).
27th May 2022 – 14.07pm Mary emails, ‘Could you tell me where the footage was taken in the building?’
30th May 2022 – 08.41am the defendant emails, ‘The footage is of the corridor outside Edward’s room.’
31st May 2022 – 07.43am Mary emails, ‘Oh, so he goes into the male cluster or into the corridor of the male cluster? Is that right? If there is more CCTV of him in the initial bit of the male cluster corridor, could you send that please.
(Bearing in mind they said he was outside his own 103 door, on the 30th May but he’s not)
7th June 2022 – the defendant emails, ‘he enters the male corridor on the first floor’
(This is nowhere near his room. They did not know that Mary knew the building and give wrong information. The defendant says he is off camera briefly but a CCTV camera is in front of him above door 105 where his old room was, months before moving to 103 and there is a staff room on the left of 105 and the CCTV is above 105 directly in front of Edward if he went to the left as they state. There is also a dealer in the room to the right at 107. This is where he must have gone briefly, as they state, with Edward never ever hiding any drug use.
Edward was mentally ill with dual diagnoses, in a dual diagnoses hostel at 2k HB P/M.
He would have done that deal in plain sight. Just as he also spoke about it, on the staff phone, at reception, to Mary before he left and had asked to borrow £10 of his own next day’s £40 budget for the dealer, whom he said was ‘holding two bags’, one was for him.
The door they then say he went through ‘finally’ is a fire door, so you can’t see after that where he went. You then have a new set of C.C.T.V camera’s. These overlook his bedroom.
There was an incident at 1am and there is no disclosure, to say if the police were called.)
19th June 2022 – 17.12pm Mary emails, ‘Can you clarify, one email said outside his room and the other the entrance to the male cluster?
Also, can you provide the original CCTV as the coroner asked you to, as the footage is filmed in a way not to show everything.
Perhaps if you show me the footage on site and the area that would be better.’
1st July 2022- 12.22pm – the defendant emails, ‘The CCTV shows the view down the male first floor corridor on which Edward’s room was located.’
(No, it doesn’t there is a fire door in between. You cannot see his room at all)
The view looks down the corridor towards a fire door which split the corridor half way down.
(Yes, meaning he went to the dealer on the left by his old room and everything would be on CCTV)
Edward’s room was the first room on the left on the other side of the fire door which separates the corridor.
It was possible to see through the glass panels on the fire door on the CCTV footage to be sure that no one approached his room after he entered it.
(You cannot see through the glass and his room is much further up opposite the shower room and toilets and also there are other rooms there too. If they originally say he went in and did not come out there was no CCTV footage of this whatsoever despite that side being fully under CCTV. This is standard as that corridor is for the most vulnerable and for insurance reason’s is always monitored).
I understand there were technical reasons why the original CCTV could not be shared but I am double checking this with IT.
1st July 2022 – 16.20pm Mary emails, ‘There are several areas that are under CCTV and I know the building well. You gave us a 11 second piece of footage, it's not good enough, also you lied to the coroner that you have given us the footage.
Please understand that without the peace of mind we cannot expect to possibly understand the change of events that led to our brothers death.
I hope you understand and comply with all the CCTV!’
14th July 2022 – 12.50pm Mary emails, ‘Can you send the CCTV?’
15th July 2022 – 19.35pm defendant replies, ‘I understand from this colleague that unfortunately they could not format the video on the CCTV system into something which could be played on any other medium, this is why it was videoed it on a phone to share with you instead. I thought that was the case but I wanted to double check.’
16th July 2022 – 18.24pm – Mary emails, ‘Does that mean you are still waiting?
These things are not insurmountable and can be done elsewhere for example around the corner at redacted I often use them.
To be fair an 11 seconds video on a member of staff's phone from a 155million pound charity is not good enough.’
21st July 2022 -10.47am the defendant replies ‘No, I have received an update from IT now. I understand that the file we have is in an old file format from a CCTV manufacturer that no longer exists. This company’s website states that it does not support this format.
We have provided you with a copy of the CCTV which features your brother, as requested, and I am sorry that we cannot assist you further.
21st July 2022 -12.46pm Mary emails, ‘What is the system and the old format?
I can see from the CCTV sent that this is just in one area and the coroner ordered you to give me all the CCTV.
Please note the filming that was done on the staff phone needs to be re-done using all available footage including;
- Leaving the building having been chatting to staff
- Arriving back in the building
- Putting the bike back
- coming up to the first floor
- Entering the male cluster
This also needs not to be Zoomed in, as it was obvious in the obscure footage sent.
Please resend without the zooming!’
27th July 2022 -13.26pm the defendant emailed, ‘I’ve had another chat with IT and we are going to see if there is a service which does support this format. I will be in touch once we have made these enquiries with an update.’
28th July 2022 – 11.54am Mary emails, ‘Thats good as you have no idea what it's like not to know for sure there wasn't foul play!’
12th August 2022 – 11.33am – Mary emails, ‘Can you tell me how far along with your tech issues you have got?’
18th August 2022 – 18.02pm the defendant emailed, ‘I was just confirming budgets and contacted IT on Monday about progressing this.
Sorry for the delay, I will be in touch.’
18th August 2022 – 19.29pm – Mary emailed, ‘I heard the boss Steve died suddenly during my brother's inquest in May 2022. He seemed like such a lovely bloke and I followed him since he joined being rather pleased at his appointment. That is such a loss too.
I want that footage as soon as possible.
It should certainly be protected.
18th August 2022 -19.30pm the defendant emailed, ‘Thank you for your kind words Mary about Steve, it is appreciated.’
11th Oct 2022 – 18.59pm Mary emailed, ‘Do you have any updates as members of my family and I are really suffering PTSD and suspicion not seeing Edward's last moments entering the building, going to his room, staff next door attending to him and of course the final exit from the building, which the police asked you to keep.
Can you send me a USB of the footage?’
12th Oct 2022 – 18.22pm the defendant emailed, ‘I am so sorry for the lack of update, I will just follow this up with the relevant team and update you within the week.’
14th Oct 2022- 13.19 Mary emailed ‘Thank-you’
21st Oct 2022 – 15.06 Mary emailed ‘That was 9 days ago?’
21st Oct 2022 - 16.38 the defendant emailed, ‘I have been following this up and understand the person who was dealing with this in IT has now left unfortunately. I have raised this matter again with the Head of IT and hope you to update you shortly.
I am very sorry for the delay.’
21st Oct 2022 - 17.51 Mary emailed, ‘Okay.’
1st Dec 2022 - 22.56 Mary emails, ‘Have you any updates? Kind Regards’
04 Dec 2022 – Mary emailed the Director of St Mungo’s with the heading ‘Notice’
The insurers would have been on notice regardless following a death, ’at all times’ and furthermore following the involvement of Hanson’s solicitors when they expressed an interest on behalf of the NHS to which St Mungo’s had worked with and was the subject of a complaint to St Mungo’s in 2020 regarding Edward’s wrongful arrest and sectioning on regular basis at this hostel, where he previously had no criminal record for over 20 years except a speeding ticket and had not had a section nor heavy sedation for decades too.
‘Sent: 04 December 2022 14:06
To: Rebecca Sycamore <Rebecca.Sycamore@MUNGOS.ORG>
Subject: Notice
Dear Rebecca,
I am putting you on notice of my intention to litigate against St Mungos.
St Mungo’s –Particulars in Brief-
Regarding death 8th Sept 2021 of my brother Edward Moss.
False imprisonment and sedation
Attempt to ruin Edward's reputation
Collaboration with the police and mental health team to falsely imprison and create inaccurate documents
Incompetence and lack of training of staff, to save life of vulnerable residents and prevent dealing on the premises
Cover up of my brother’s murder and failure to tell the family of his death in a timely and humane manner
You can choose to respond in person or not.
Kind Regards
Mary Moss
5th Dec 2022 - 16.58 the defendant emails, ‘I am just following up with colleagues for an update.
Apologies for the delay’
12th Dec 2022 – 09.33am the defendant emailed, ‘Your email has been forwarded to me to respond to.
Firstly, can I reiterate again how sorry I am for the loss of your brother.
As you are aware, St Mungo’s cooperated fully with the inquest process at the time in terms of the information provided and we don’t feel there is anything further to add at this stage.
I am continuing to follow up with IT colleagues to see if we are able obtain the CCTV footage of your brother in a viewable format for you. I will keep you posted as I hear back.’
I ligated on
I got an email from a legal person called Luke Fitton of Ashford’s, after a default judgement was given by the county courts due to no response from the defendant.
I replied stating that I had as in CPR given fair notice as seen above.
29th August 2023 14.34 Mary emailed, Dear Luke Fitton,
I put you on notice that I intended to litigate on the 12/12/2022.
I also repeatedly asked for the video footage that the coroner gave permission for the family to see, to put our minds at rest.
With nothing but IT excuses, as you can see I let you know the particulars in brief.
If the courts failed to serve you should take that up with them and not me.
Your conduct has been evasive.
Kind Regards
The defendant’s intention may have always been to set aside the Judgement and that is in itself a canny plan for an insurer or a well-funded solicitor’s firm.
However, they have been contemptuous and acted with delay.
They have only realised that they will lose £40k when I enforced the default judgement.
The applications they have made fall outside of the period for me to enforce.
There is no stay in place as there are no reasonable grounds in law.
The judgement should be to uphold the default-judgement and for a civil trial to then take place with full disclosure of the CCTV.
Kind Regards
Mary Moss
23 Nov 23
Telephone call to Royal courts of Justice Nov 2023
Mary Moss: The case is K01CL630, I’m Mary Moss.
Call Handler: Can you verify first line of your address and the defendant’s name.
MM. Redacted and St Mungo’s
CH: That’s fine how can I help
MM. Okay I did send an email to ask you. I believe that it is 50 pages that we are allowed to send in for the bundle but I’m not sure if that’s right? 50 pages and if its double sided its 25? I believe in hard copy it’s 50 pages for the bundle is that right?
CH: I’ll just check.. (pause) so yes it is 50 double sided pages
MM. Yes for the bundle yes. Also, the defendant’s solicitors has contacted me and I said it was 50 pages but they seem to think that they can put a lot of hard copy into the court which I said that the courts won’t appreciate. I will let them know then that it is 50 pages.
CH: Well, I will explain to you that if the bundle is large, too large to be e-filed, the email has to be 25mb, or 50 double sided pages or if you are unable to, you can put them in the drop box, you can book an appointment for that.
MM. I don’t personally but I will be dropping off a trial bundle. It’s very unclear because firstly it says it’s the defendants hearing but I also applied for a claimant’s hearing so it seems that the defendant got a hearing but I’m the claimant who put in the claim who didn’t get a hearing so some people would suggest that both hearings get heard at the same time, that is the first issue. I don’t know if you can resolve that or not, it doesn’t matter to be fair.
James Haythorn one of your staff he may need to issue a statement regarding the CMS because the issue, of the date of St Mungo’s, is believed to be the 23rd May so I would appreciate if you either email back or can provide a witness statement that he issued the claim to St Mungo’s on the 23rd May.
CH. I cannot see that information on the system, I can see the hearing is listed for 29th November at 10 o clock.
MM. Yes. I really only needed to know about the bundles but I wouldn’t mind if James Haythorn could email back to my email which I sent this morning. Just advising that the defendant was issued albeit with the incorrect name but he was issued on the 23rd May 2023. I mean can you see on the CMS? James Haythorn says that they issued the claim, my claim, to the defendant on the 23rd May? Is that on your CMS system?
CH. So the case was created on the system 3rd May 2023.
MM. Right. Was it posted to the defendant as I got it, the same as the defendant?
CH. Yes, yes, both parties
MM. Both parties it was posted to yes.
CH. Yes
MM. Right okay. Can James write that back in the email to me? Or you reply to the email saying that both parties received the claim on thereabouts between the 3rd and the 23rd May.
CH. I will explain to you, so the defendant, the date of service to the defendant, was 9th May, I can see on my system yes 9th of May it is on our system where we can see that the defendant was served, the date of service we call it.
MM. Yes.
CH. It is 9th of May 2023.
MM. Excellent and if you can email that back to me I can then put it in the bundle.
CH. We cannot email parties so we are a call centre we cannot send any emails, so…
MM. No worries
CH but if you need to..
MM. That’s fine no problem. Well as long as we know that the pages are 50 pages and it was issued on the 9th May that will be fine thank you so much.
CH. Fine.
MM. Oh one more thing, I think I have to pre-arrange to drop off a trial bundle, I would like to drop it off as it’s not got to be 7 days before and 3 days before the hearing..
CH. Okay
MM. Okay is it possible to make a date where I can drop off the trail bundle please?
CH. So there’s a drop box in the Central London, so it says on the system the drop box is located in the main hall of the RCJ building. It is open twice daily 8.30am and 2pm stamped with the date are dropped off. Do you want me to book an appointment?
MM. But I would need to get it stamped, I couldn’t just put it in could I?
CH. Yes so, no, no, you just put it there and they will stamp it when they open the top box.
MM. Oh excellent so it’s the 20th today and the hearing is not until the 29th so the earliest I could put it in would be
CH. You can
MM. Wednesday
CH. You can send it anytime, you can use the drop box anytime
MM. Okay so it’s not a problem
CH. You have
MM. Okay so it’s not a problem
CH. No
MM. I just drop it in on Thursday which is 5 working
Ch. Yes you can
MM. 5 working days before the hearing because I want to be in the 7 days because it specifically says 7 days and not 3 days less so.. Yes cool alright thank you so much for your help
CH. Thank you, thank you, bye bye
MM. Bye bye.
So 20th November at 13.28. 9th of May was the service. (spoken for the recording)
A rare photo of Eddie annoyed I seen that one today quite poiniant!
Contents
PART 13
SETTING ASIDE OR VARYING DEFAULT JUDGMENT
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13.1 ScopeofthisPart...............................
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13.2 Cases where the court must set aside judgment entered
para.13.1 para.13.2
para.13.3
para.13.4 para.13.5 para.13.6
under Part 12. . . . . . . . . . . . . . . . . . . . . . . . . . . .
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13.3 Cases where the court may set aside or vary judgment
entered under Part 12. . . . . . . . . . . . . . . . . . . . . .
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13.4 Application to set aside or vary judgment—procedure .
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13.5 [Omitted].................................
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13.6 Abandoned claim restored where default judgment set aside. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Editorial introduction
. . . .
. . . . .... ....
. . . .
A default judgment is invariably obtained by an administrative act (see Pt 12). This puts default judgments in a different category from summary judgment (see Pt 24) or a judgment following a trial. These latter judgments cannot be “set aside”; but they maybe reviewed on appeal. In contrast a default judgment will not usually have been subject to judicial scrutiny and there is no provision to apply for leave to appeal. Hence the need for a procedure to apply to set aside or vary a default judgment.
Part 13 is limited in scope to the setting aside (or varying) of a default judgment. Part 13 has not effected any changes in practice under the old rules.
Brexit
Following the UK’s withdrawal from the European Union from 31 December 2020, CPR Pt 13 was amended by the Civil Procedure Rules 1998 (Amendment) (EU Exit) Regulations 2019 (SI 2019/521) further to the revocation of the Service Regulation (1393/2007) and the Taking of Evidence Regulation (1206/2001) by the Service of Documents and Taking of Evidence in Civil and Commercial Matters (Revocation and Saving Provisions) (EU Exit) Regulations 2018 (SI 2018/ 1257). In the light of this the reference to the Service Regulation in r.13.3 became redundant.
Related sources
D Part 12 (Default Judgment)
D Part 23 (General Rules for Applications)
D Rule 39.3(3) (Setting aside on application of party who failed to attend)
D Rule 40.9 (Application to set aside by a person who is not a party but who is directly af-
fected by judgment)
D See CCR Ord.22 r.10 (Varying the rate at which a judgment debt is paid)
Forms
None are currently prescribed.
Practice Direction
Part 13 is not supplemented by a practice direction.
Scope of this Part1
13.1 The rules in this Part set out the procedure for setting aside or vary- ing judgment entered under Part 12 (default judgment).
Rule 13.1: Effect of rule
Part 13 is not a comprehensive code for setting aside judgments generally but is confined to the setting aside of a default judgment which has been obtained pursuant to Pt 12. It is not applicable to a default judgment entered for failure of the defendant to comply with an “unless” order, where an application for relief from sanction under r.3.9 would be appropriate. (See the Privy Council decisions Attorney-General v Universal Projects Ltd [2011] UKPC 37 and Attorney-General v Matthews [2011] UKPC 38. Although the decisions were made on the basis of the Civil Procedure Rules of Trinidad and are not binding, the principles applied are likely to be equally applicable under the CPR).
1 Amended by Civil Procedure (Amendment) Rules 2014 (SI 2014/407).
13.0.1
13.0.1.1
13.0.2
13.0.3 13.0.4
13.1 13.1.1
441
CPR 13
13.2.1.1
13.2.2
SECTION A CIVIL PROCEDURE RULES 1998
13.2
13.2.1
CCR Ord.22 r.10 is re-enacted in Sch.2 to the CPR. It deals with an application to vary the rate at which a judgment debt must be paid on the application of either the judgment creditor or the judgment debtor.
Cases where the court must set aside judgment entered under Part 121
13.2 The court must set aside(GL) a judgment entered under Part 12 if judgment was wrongly entered because—
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(a) in the case of a judgment in default of an acknowledgment of service, any of the conditions in rule 12.3(1) and 12.3(3) was not satisfied;
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(b) in the case of a judgment in default of a defence, any of the condi- tions in rule 12.3(2) and 12.3(3) was not satisfied; or
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(c) the whole of the claim was satisfied before judgment was entered.
Rule 13.2: Effect of rule
Rule 13.2 refers to judgment being “wrongly entered”, i.e. the judgment is irregular. The court must set aside the wrongly entered judgment in the three situations specified in the rule.
A default judgment must be set aside irrespective of the defendant’s lack of prospects of success if the claim has not been served (Credit Agricole Indosuez v Unicof Ltd [2003] EWHC 77 (Comm); [2003] All E.R., and Shiblaq v Sadikoglu (Application to Set Aside) (No.2) [2004] EWHC 1890 (Jul) (Comm.) (“In the absence of proof of valid service, a claimant was not entitled to judgment in default under CPR 12.3”)), but see Akram v Adam [2004] EWCA Civ 1601; [2005] 1 W.L.R. 2762; [2005] 1 All E.R. 741: as long as service is effected in accordance with the CPR, it is not a contraven- tion of art.6 ECHR if the defendant never in fact received the proceedings.
See also G v de Visser (C-292/10) Times, 22 June 2012, where the European Court held that EU law did not preclude the issue of judgment by default against a defendant on whom, given that it was impossible to locate him, the document instituting proceedings had been served by public notice under national law, provided that the court seised of the matter had first satisfied itself that all investigations required by the principles of diligence and good faith had been undertaken to trace the defendant.
Cases in which the court must set aside a judgment “wrongly entered” regardless of the merits
The provisions of r.13.2 are straightforward. However, reference should also be made to r.6.17(2) which states that, where the claimant serves the claim form, (a) he must file a certificate of service within 21 days of service of the particulars of claim, unless all the defendants have filed acknowledgments of service within that time, and (b) he may not obtain judgment in default under Pt 12 unless a certificate of service has been filed. CPR r.12.12(6)(a) states that, both on a request and an application for default judgment, the court must be satisfied that the particulars of claim have been served on the defendant, and indicates that a certificate of service on the court file will be sufficient evidence.
Rule 6.17(2)(b) read together with (a) only requires that a certificate of service be filed (where it is needed because a defendant has not filed an acknowledgment of service) before a judgment in default can be obtained. That provision draws no distinction between certificates filed before or after the 21-day period. The rule does not say that default judgment may only be entered if the certificate has been filed within the 21 days. Provided a certificate is filed even outside the 21-day period fixed by r.6.17(2)(a) a default judgment may be entered thereafter and it is commonplace for the court to receive the certificate and a request for default judgment from a claimant simultaneously.
See also comments of Simon J in Gulf International Bank BSC v Ekttitab Holding Co KSCC [2010] EWHC B30 (Comm) and Henriksen v Pires [2011] EWCA Civ 1720 (see Note at 13.1.1) with regard to failure to file Certificate of service.
Judgment set aside on grounds of invalid service
The case of Olafsson v Gissurarson [2006] EWHC 3162 (QB); [2007] 1 Lloyd’s Rep. 182 involved an application to set aside judgment relying on a failure to serve in accordance with the law of Iceland, the country of service. The case was unusual for a number of reasons. Service had been made by the British Consular authorities in Iceland, and there was no dispute that the defendant had received the proceedings. The claimant’s solicitors kept the defendant fully informed of the progress of the action (in libel), but the defendant chose to take no part in the process. The action progressed to trial, culminating in an assessment of damages and a permanent injunction.
Six months after the assessment of damages the defendant applied to set aside the judgment under CPR r.13.2(a), because the Consul had failed to obtain from the defendant a signed receipt
1 Amended by the Civil Procedure (Amendment) Rules 2014 (SI 2014/407).
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PART 13 SETTING ASIDE OR VARYING DEFAULT JUDGMENT
on an appropriate court form of the papers being served, and this rendered service ineffective under Icelandic law. At the same hearing the claimant applied under CPR r.3.10 for relief in respect of the invalid service. Although the Master granted the claimant’s application, holding that the irregularity in service ought properly to be cured by the application of CPR r.3.10, that deci- sion was overturned on appeal by Mackay J. The judge relied a decision of the Court of Appeal, Phillips v Nussberger [2006] EWCA Civ 654; [2006] 1 W.L.R. 2598, CA, (which was not before the Master) where Neuberger LJ took the view, obiter, that a claimant could not rely on CPR r.3.10 to correct a defect in service. Mackay J held that the claimant could not rely on CPR r.3.10 in this case to remedy the failed attempt at service, and the defendant was entitled to have the judgment set aside. However, he acceded to the claimant’s application for an order under Pt 6.9 dispensing with service of the claim form, with the effect of retrospectively validating service. (There was an unsuc- cessful appeal by the defendant against the order made under Pt 6.9 reported at [2008] EWCA Civ 152.)
Note also Fairmays (A Firm) v Palmer [2006] EWHC 96 (Ch): it is not open to a court, in the light of the provisions of CPR r.6.5(1), to conclude that proceedings issued for service within the jurisdiction can properly be served when, at the time of deemed service the defendant was physi- cally out of the jurisdiction. Accordingly judgment entered in default was set aside under CPR r.13.2 because judgment had been wrongly entered, but see commentary below.
Note that in City & Country Properties Ltd v Kamali [2006] EWCA Civ 1879; [2007] 1 W.L.R. 1219, CA, the Court of Appeal held that, where proceedings have been issued for service within the jurisdiction, there is no requirement for the defendant to be within the jurisdiction at the time of service for service to be effective. In reaching this conclusion, the Court of Appeal disapproved the statement made by Lawrence Collins J in Chellaram v Chellaram (No.2) [2002] 3 All E.R. 17 (at para.47) that:
“... it has always been, and remains, a fundamental rule of English procedure and jurisdic- tion that a defendant may be served with originating process within the jurisdiction only if he is present in the jurisdiction at the time of service or deemed service.”
May LJ held that this was “intrinsically” incorrect, and also wrong in that it failed to follow the Court of Appeal decision in Rolph v Zolan [1993] 1 W.L.R. 1305, CA, which, if not strictly binding, was “indistinguishably applicable”. This decision casts doubt on whether Fairmays (which followed Chellaram) was correctly decided.
Cases where the court may set aside or vary judgment entered under Part 121
13.3—(1) In any other case, the court may set aside(GL) or vary a judgment 13.3 entered under Part 12 if—
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(a) the defendant has a real prospect of successfully defending the claim; or
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(b) it appears to the court that there is some other good reason why—
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(i) the judgment should be set aside or varied; or
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(ii) the defendant should be allowed to defend the claim.
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(2) In considering whether to set aside(GL) or vary a judgment entered under Part 12, the matters to which the court must have regard include whether the person seeking to set aside the judgment made an application to
do so promptly.
(Rule 3.1(3) provides that the court may attach conditions when it makes an
order.)
Rule 13.3: Effect of rule
Rule 13.3 deals with the setting aside of a regular judgment (contrast r.13.2—cases where the 13.3.1
court must set aside). It was amended, as from 31 December 2020, by reg.7(2) of the Civil Procedure
Rules 1998 (Amendment) (EU Exit) Regulations 2019 (SI 2019/521) to remove reference to
art.19(4) of the Service Regulation (1393/2007) consequent to revocation of that Regulation by the
Service of Documents and Taking of Evidence in Civil and Commercial Matters (Revocation and Saving Provisions) (EU Exit) Regulations 2018 (SI 2018/1257).
The use of the word “may” shows that the court has a discretion but must act in accordance with Pt 1 (the Overriding Objectives).
The defendant applying to set aside the judgment must come within r.13.3(1)(a) or (b). It is not enough to show an “arguable” defence; the defendant must show that they have “a real prospect of successfully defending the claim”. It is essentially the same test as applied to summary judgment
1 Amended by the Civil Procedure (Amendment No.2) Rules 2001 (SI 2001/1388), the Civil Procedure (Amendment) Rules 2008 (SI 2008/2178) and the Civil Procedure Rules 1998 (Amend- ment) (EU Exit) Regulations 2019 (SI 2019/521).
443
CPR 13
13.3.2
applications under Pt 24. This test is more fully covered in para.24.2.3; see also Swain v Hillman [2001] 1 All E.R. 91, CA.
In ED&F Man Liquid Products Ltd v Patel [2003] EWCA Civ 472; [2003] All E.R. (D)75; [2003] C.P. Rep. 51, Potter LJ explained the distinction between the tests:
“...the only significant difference between the provisions of CPR 24.2 and 13.3(1), is that under the former the overall burden of proof rests upon the claimant to establish that there are grounds for his belief that the respondent has no real prospect of success whereas, under the latter, the burden rests upon the defendant to satisfy the court that there is good reason why a judgment regularly obtained should be set aside. That being so, although generally the burden of proof is in practice of only marginal importance in relation to the assessment of evidence, it seems almost inevitable that, in particular cases, a defendant applying under CPR 13.3(1) may encounter a court less receptive to applying the test in his favour than if they were a defendant advancing a timely round of resistance to summary judgment under CPR 24.2.”
The discretionary power to set aside is unconditional. The purpose of the power is to avoid injustice. The major consideration on an application to set aside is whether the defendant has shown a real prospect of successfully defending the claim or some other good reason why judg- ment should be set aside or they should be allowed to defend the claim. The defendant is seeking to deprive the claimant of a regular judgment which the claimant has validly obtained in accord- ance with Pt 12: this is not something which the court will do lightly. In El Diwany v Hansen [2011] EWHC 2077 (QB) (Sharp J) a foreign defendant in a defamation claim filed an acknowledgment of service which was defective because it did not contain an address for service (rr.6.23 and 10.5) and the claimant entered default judgment under r.12.3. In determining the defendant’s applica- tion to set aside the judgment under r.13.3, the judge found and had regard to (amongst other things) the fact that defendant had no notice of the claim until service of the claim form.
In De Ferranti v Execuzen Ltd [2013] EWCA Civ 592, the Court of Appeal, endorsing its ap- proach in Nelson v Clearsprings [2006] EWCA Civ 1252; [2007] 1 W.L.R. 962, held that an applica- tion to set aside a judgment or order made in the applicant’s absence must be determined in ac- cordance with the court’s discretion under the CPR (CPR r.23.10 or 13.3 or as appropriate); and the court may decide not to set aside a judgment or order even if made at a hearing at which the applicant has not, but should have been, given notice.
Where a condition with which a party is unable to comply is imposed on an order granting that party’s application under r.13.3, the court’s decision is tantamount to a refusal and, in effect, a final decision, (2) for that reason, a court’s setting aside a default judgment on condition that money be paid into court should not be regarded as simply a case management decision (Rajval Construction Ltd v Bestville Properties Ltd [2010] EWCA Civ 1621; [2011] C.I.L.L. 2994). Judgment was not set aside, although the court considered it was entered without jurisdiction, in an exceptional case: Continuity Promotions Ltd v O’Connor’s Nenagh Shopping Centre Ltd [2005] EWHC 3462.
In Henriksen v Pires [2011] EWCA Civ 1720, the Court of Appeal upheld the judge’s decision that the defendant could not rely on alleged technical failures by the claimant in an application under Part 13.3.
In Samara v MBI & Partners UK Ltd [2016] EWHC 441 (QB), Cox J held that a decision made by a judge under r.13.3 was a final decision and could not be the subject of a second application to set aside judgment or a further challenge by reference to r.3.1(7). The only way forward for a dissatis- fied party is to appeal.
Rule 13.3(1)(b): “some other good reason”
See the judge’s comments about the claimant’s solicitors’ “unnecessarily aggressive conduct” in Hart Investments Ltd v Fidler [2006] EWHC 2857, TCC; [2006] 2 All E.R. (D.) 232 Nov.
In Berezhovsky v Russian Television and Radio Broadcasting Co [2009] EWHC 1733 (QB), Eady J held, in a defamation claim, that the court’s discretion to set aside judgment under CPR r.13.3 was a broad one, which may be exercised if there was considered to be “some other good reason” why a defendant should be allowed to defend the claim. Where an allegation was a serious one, involving the suggestion that someone had been granted asylum on a false basis and in light of evidence obtained by threats and by drugging a relevant witness, it was plainly desirable (and indeed in the public interest) that the allegation should be given as full and fair a hearing as the circumstances permitted. Although the defendant had not acted promptly in his attempt to set aside the judg- ment, that may have been attributable to a genuine perception on his part that he needed to remain in hiding. It was also important to note that the primary object of most libel actions was to achieve vindication of the relevant claimant’s reputation. If the claimant relied purely on a judg- ment obtained in default, it would be easy for those ill disposed towards them, for whatever reason, to undermine the effectiveness of that vindication. It was in the interests of both sides that a proposed plea of justification should properly be addressed.
The failure to serve a response pack could potentially constitute “some other good reason” for the court to exercise its discretion to set judgment aside (Ahmet Erol v Global Fashion Links Ltd [2014] EWHC 4687 (IPEC)). There are differing decisions as to whether such failure was regarded, in the circumstances of the case, as sufficient for the court to exercise its discretion: see Gulf
SECTION A CIVIL PROCEDURE RULES 1998
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PART 13 SETTING ASIDE OR VARYING DEFAULT JUDGMENT
International Bank BSC v Ekttitab Holding Company KSCC [2010] EWHC B30 (Comm) and Henriksen v Pires [2011] EWCA Civ 1720 (see para.3.3.1 above).
In S T Shipping & Transport Inc v Vyzantio Shipping Ltd (The “Byzantio”) [2004] EWHC 3067 (Comm); [2005] 1 Lloyd’s Rep. 531 (Judge Havelock-Allan QC), where a default judgment was set aside, the judge (1) found that the claimant’s failure, after a delay of 18 months, to warn the defendant (D) that a claim form had been issued or to invite D to accept service of it, lulled D into believing that the claim was not being pursued or at least induced him to forget all about it, and (2) held that this was a factor of some weight to be taken into account by the court in determining whether there was “some other good reason” (within r.13.3(1)(b)(i)) for setting aside the default judgment (paras 24 and 32).
In Merchant International Company Ltd v Aksionerna Kompaniya “Naftogaz Ukrayiny” [2011] All E.R. (D) 156 a default judgment had been entered on proceedings brought upon a Ukrainian judgment. After the English judgment had been entered the Ukrainian judgment was cancelled by the Ukrainian Supreme Commercial Court, and the defendant relied on that cancellation of the underlying judgment as the basis for its application to set aside judgment. Steel J refused that ap- plication, on the grounds that under art.6 of the HRA 1998 it was open to the English court to refuse to recognise the Ukrainian judgment that had cancelled the original judgment on public policy grounds. He refused recognition because of the “glaring shortfall from compliance with principle” in that judgment.
In Goldcrest Distribution Ltd v McCole [2016] EWHC 1571 (Ch) Master Matthews found, on the facts of the case, that it was proper for a judge to have made a declaration that the claimant’s charge was void when granting the defendant default judgment on her counterclaim with the result that this could not be relied upon as “some other good reason” for the claimant to set aside the default judgment.
Rule 13.3(2): need to act promptly
Rule 13.3(2) gives added emphasis to the need to act promptly in seeking to set aside. Indeed the need to comply with time-limits and generally to act promptly is a feature of the CPR. In applying to set aside the court has always considered delay and the reasons for it (Evans v Bartlam [1937] A.C. 473). Promptness will always be a factor of considerable significance and, if there has been a marked failure to make the application promptly, a court may well be justified in refusing relief, notwithstanding the possibility that the defendant may well succeed at trial (Standard Bank Plc v Agrinvest International Inc [2010] EWCA Civ 1400; [2011] C.P. Rep. 15; [2010] 2 C.L.C. 886). However, in certain cases the court may conclude that judgment may be set aside even where there has been excessive delay; see Barons Bridging Finance Plc v Nnadiekwe [2012] EWHC 2817 (Comm), where HH Judge Mackie QC allowed a defendant to set aside a judgment entered several years earlier, on the basis that: (i) There were very serious conflicts of evidence between the parties, and the defendant alleged that she was the victim of fraud; (ii) the case had not lain buried since judg- ment was entered, it had continued for some time. Given the importance of the issue and the facts, justice required that the judgment be set aside.
Other cases where delay was considered are:
Strachan v Gleaner [2005] UKPC 33; [2005] 1 W.L.R. 3204; [2005] All E.R. (D.) 358 (Jul): the fact that damages had been assessed and a final judgment entered did not deprive the court of jurisdiction to set aside a default judgment, but it was highly relevant to the question of discretion. It was an aspect of, but separate from, the question of delay. It could not safely be assumed in every case that any prejudice to the claimant could be met by putting the defendant on terms to pay the costs thrown away by the assessment hearing. There could be no rigid rule either way; it depended on the facts of the particular case.
Hussain v Birmingham City Council [2005] EWCA Civ 1570; 149 Sol Jo LB 1487; [2005] All E.R. (D.) 353 (Nov): defendants and Pt 20 defendants issued applications to set aside default judgments in the main action and the Pt 20 claim only a week before trial. The Court of Appeal allowed the defendant’s appeal from the judge’s order refusing to set the judgments aside. It was held, inter alia, that a judge’s discretionary power was not to be exercised to punish a party for incompetence, but to further the overriding objective.
Nolan v Devonport [2006] EWHC 2025 (QB): a debtor who did nothing until the creditor sought to enforce the judgment, then applied to set aside, was refused permission to set aside, it being held that the debtor’s conduct amounted to an abuse of process.
An application to set aside must be supported by evidence (see r.13.4(3)). If a defendant has not acted promptly they would be well advised to address the reason for this in their witness statement or affidavit having regard to r.13.3(2).
In Harrison v Hockey [2007] All E.R. (D.) 336 (Mar), Mann J refused the defendant’s application to set aside judgment after a trial in his absence on the basis of his inability to attend the hearing. It was held that four and half months was too great a delay in making the application.
In Khan v Edgbaston Holdings [2007] EWHC 2444 (QB), HH Judge Coulson QC, sitting as a deputy judge of the High Court, cited a passage by Simon Brown LJ in Regency Rolls Ltd v Carnall [2000] EWCA Civ 379, at [45], in the context of considering the meaning of the word “promptly” within CPR Pt 39, as providing “the clearest exposition” of what is required by “promptly” whether contained in CPR Pt 13 or 39. In Regency Rolls Ltd v Carnall, Simon Brown LJ held that 30 days was too long a delay before making the application in the particular circumstances, stating:
13.3.3
445
CPR 13
13.3.4
13.3.5
“Having regard to the long, and generally unsatisfactory, history of the proceedings to that point, the application plainly could, and in my judgment reasonably should, have been issued well before it was.”
HH Judge Coulson held in Khan that the defendant had not acted promptly, which he described as being “with all reasonable celerity in the circumstances”.
HH Judge Coulson in Khan also referred to the decision in Hart Investments v Fidler [2006] EWHC 2857, (see Note at 13.3.2 above) where the judge concluded that a delay of 59 days in mak- ing an application under CPR Pt 13 was “very much at the outer limit of what could possibly be acceptable” and that in the context of a case where the applicant was not legally represented, the certificate of service recorded the wrong date and the application was premature, the conduct of the respondent’s solicitors was criticised as “unnecessarily aggressive”, the default judgment was only one of a number of procedural aspects of the case and the default judgment against the second defendant in the main proceedings would not bring finality in the proceedings as a whole. In Standard Bank Plc v Agrinvest International Inc [2009] EWHC 1692 (Comm) Field J held that although promptness may not be the controlling factor under CPR r.13.3, it is plainly a very important factor, as is evident from the fact that it is singled-out in the rule as a matter to which the court must have regard. It is a very important factor because there is a strong public interest in the finality of litigation.
The CA, dismissing an appeal from that judgment ([2010] EWCA Civ 1400), gave some general guidance as to the effect that promptness will have on an application, in the judgment of Moore- Bick LJ at [21]–[24].
In Mullock v Price [2009] EWCA Civ 1222; [2010] C.P. Rep. 10 it was held that r.13.3, unlike an application for relief from sanction under r.3.9, did not permit a defendant to rely on the default of his representatives (in that case his insurance brokers rather than his legal representatives) as a reason for not acting promptly. It was said that the explicit language of r.13.3 imposed the duty to act promptly upon the defendant personally.
Application to set aside judgment by a non party
In Humber Work Boats Ltd v Owners of the Selby Paradigm [2004] EWHC 1804 permission was granted to a non party, X, insurers of the defendant, to be joined as a second defendant under r.19.2, and to set aside the default judgment against the defendant under r.13.3(1) or r.61.9(5). It was held that the default judgment was not a bar to the joinder of X and the question was whether D or X had a defence that had a real prospect of success. In Latif v Imaan Inc [2007] EWHC 3179 (Ch) a third party was permitted to be joined to proceedings for the purpose of applying to set aside a default judgment, pursuant to r.40.9 (see Note at 40.9.5). Under r.40.9 a person who is not a party but who is “directly affected” by a judgment or order may apply to have it set aside. It would seem that this rule applies to default judgments; see further para.40.9.1 below.
Effects of court’s approach following implementation of Jackson
In Samara v MBI & Partners UK Ltd [2014] EWHC 563 (QB); (2014) 164(7598) N.L.J. 18 at [34]–[39], Silber J held that although the 15th and 18th Lectures in the Implementation Programme on the Application of the Amendments to the Civil Procedure Rules do not deal specifically with the approach to CPR r.13.3, that as r.1.1 applied to all the CPR, the effect of that rule, as amended from 1 April 2013, must be taken into account in considering the requirement to act promptly.
The Court of Appeal has suggested in obiter dicta that an application under r.13.3 to set aside a judgment entered in default of defence is an application “for relief from any sanction” within the meaning of r.3.9 so that the tests for the application of r.3.9 laid down in Denton v TH White Ltd (Practice Note) [2014] EWCA Civ 906; [2014] 1 W.L.R. 3926, CA, are engaged; Gentry v Miller (Practice Note) [2016] EWCA Civ 141; [2016] 1 W.L.R. 2696, CA, at [23] per Vos LJ; Regione Piemonte v Dexia Crediop SpA [2014] EWCA Civ 1298 at [39] and [40] per Christopher Clarke LJ; Redbourn Group Ltd v Fairgate Development Ltd [2017] EWHC 1223 (TCC) (Coulson J) at [17] and [18]; Hockley v North Lincolnshire and Goole NHS Foundation Trust, 19 September 2014, unrep. (Judge Richardson QC). See further commentary on r.3.9 at para.3.9.8 above. These decisions have been followed in several first instance cases, most recently in Ince Gordon Dadds LLP v Mellitah Oil and Gas BV [2022] EWHC 997 (Ch).
However, the contrary view was advanced by Andrew Baker J in Cunico Resources NV v Daskalakis [2018] EWHC 3382 (Comm); [2019] 1 W.L.R. 2881 that using the procedural machinery of r.13.3 was not an application for relief from sanctions. This view was followed by Dexta Dias QC in C v D [2022] 5 WLUK 99. The judge applied the reasoning of Lord Dyson in Attorney General of Trinidad and Tobago v Matthews [2011] UKPC 38 in which the Privy Council had analysed similar procedural rules, Matthews applied. It could not have been intended that in addition an applicant would have to satisfy the additional and different requirements of the Denton test and declined to follow Ince.
SECTION A CIVIL PROCEDURE RULES 1998
446
PART 13 SETTING ASIDE OR VARYING DEFAULT JUDGMENT
Application to set aside or vary judgment—procedure1
13.4—(1) Where— 13.4
-
(a) the claim is for a specified amount of money;
-
(b) the judgment was obtained in a court which is not the defendant’s
home court;
-
(c) the claim has not been transferred or, in the County Court, sent to
another defendant’s home court; and
-
(d) the defendant is an individual,
in the High Court the court will transfer, or, in the County Court, the court officer will send, an application by a defendant under this Part to set aside(GL) or vary judgment to the defendant’s home court.
(1A) [Omitted] (1B) Where—
-
(a) the claim is for a specified amount of money;
-
(b) the claim has been started in the County Court Money Claims
Centre;
-
(c) the claim has not been sent to a County Court hearing centre; and
-
(d) the defendant is not an individual,
an application by a defendant under this Part to set aside or vary the judg- ment will be sent to the preferred hearing centre.
(2) Paragraph (1) does not apply where the claim was commenced in a specialist list.
(3) An application under rule 13.3 (cases where the court may set aside(GL) or vary judgment) must be supported by evidence.
(1C) If a claim is sent to a preferred hearing centre pursuant to paragraph (1B) any further correspondence should be sent to, and any further requests should be made at, the hearing centre to which the claim was sent.
Rule 13.4: Effect of rule (as amended April 2014)
Rule 13.4(1) is derived from CCR Ord.37 r.4(2), but is modified. Automatic transfer to the 13.4.1
defendant’s home court (defined in r.2.3) now occurs only if the four specified conditions in the
rule are satisfied (see r.26.2). The phrase “a specified amount of money” is wider than the old
expression “liquidated sum” and includes any claim where the claimant has put a specific figure on
their claim rather than claim damages. Automatic transfer now only occurs where the defendant “is an individual” not, for example, where the defendant is a company or partnership sued as a firm.
There is no automatic transfer where the claim was commenced in a specialist list.
Rule 13.4(3) does not expressly require a witness statement but does require the application to be “supported by evidence”. The filing and service of a witness statement to support the applica- tion is undoubtedly the better practice. It is also preferable to exhibit a draft defence. In a clear case the service of the witness statement may induce the claimant not to oppose the application. Even where the claimant does wish to oppose, the service of the witness statement gives time for the claimant to consider their position and file and serve a witness statement in reply.
This rule was substituted by the Civil Procedure (Amendment) Rules 2014 (SI 2014/407), as a consequence of the coming into force of provisions in the Crime and Courts Act 2013 s.17 and Sch.9 creating the single County Court, with effect from the commencement date for those provisions. For text of rule as it stood before that date, see the 2013 edition of the White Book. Under the new court structure, in the circumstances provided for in this rule (and in others), proceedings will not be “transferred” from court to court, but will be “sent” from one “hearing centre” to another. The CCMCC is not a “hearing centre” but an office of the County Court.
1 Amended by the Civil Procedure (Amendment) Rules 1999 (SI 1999/1008), the Civil Procedure (Amendment No.4) Rules 2000 (SI 2000/2092), the Civil Procedure (Amendment No.4) Rules 2011 (SI 2011/3103) and the Civil Procedure (Amendment) Rules 2014 (SI 2014/407).
447
CPR 13
13.6.1
12.4(1) (claims in respect of which the claimant may obtain default
judgment by filing a request);
-
(b) the claimant abandoned his claim for that remedy in order to obtain
default judgment on request in accordance with 12.4(3); and
-
(c) the default judgment is set aside(GL) under this Part,
the abandoned claim is restored when the default judgment is set aside.
Rule 13.6: Effect of rule
Default judgment is not available on the filing of a request in all cases: only the claims specified in r.12.4(1). Claimants will sometimes claim remedies where it is not possible to enter judgment in default on request but a claimant is entitled, if they so choose, to abandon the claim for that remedy and enter judgment for the remainder of the claim: see r.12.4(3). If a claimant does this but their default judgment is subsequently set aside; the abandoned claim is automatically restored pursuant to r.13.6 when the default judgment is set aside.
SECTION A CIVIL PROCEDURE RULES 1998
Claimant’s duty to apply to set aside judgment1
13.5 13.5 [Omitted]
Abandoned claim restored where default judgment set aside
13.6 13.6 Where—
(a) the claimant claimed a remedy in addition to one specified in rule
1 Revoked with effect from 30 June 2004, by the Civil Procedure (Amendment) Rules 2004 (SI 2004/1306).
448
Second attachment
Contents
PART 3
THE COURT’S CASE AND COSTS MANAGEMENT POWERS
I. Case Management
3.1 Thecourt’sgeneralpowersofmanagement ............
3.1A Case management—unrepresented parties . . . . . . . . . . . . .
-
3.2 Courtofficer’spowertorefertoajudge ...............
-
3.3 Court’spowertomakeorderofitsowninitiative .........
-
3.4 Powertostrikeoutastatementofcase ...............
-
3.5 Judgmentwithouttrialafterstrikingout................
3.5A Judgment without trial after striking out a claim in the County Court Money Claims Centre . . . . . . . . . . . . . . . .
3.6 Setting aside judgment entered after striking out . . . . . . . . .
3.6A ............................................
3.7 Sanctions for non-payment of certain fees by the claimant . .
3.7A1 Sanctions for non-payment of the trial fee by the claimant . .
3.7A Sanctions for non-payment of certain fees by the defendant .
3.7AA Sanctions for non-payment of the trial fee by the defendant, where proceedings continue on the counterclaim alone . .
3.7B Sanctionsfordishonouringcheque...................
-
3.8 Sanctions have effect unless defaulting party obtains relief . .
-
3.9 Relieffromsanctions ............................
-
3.10 General power of the court to rectify matters where there has been an error of procedure . . . . . . . . . . . . . . . . . . .
-
3.11 Ordersrestrainingcivilproceedings .................. II. Costs Management
-
3.12 Application of this Section and the purpose of costs management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-
3.13 Filing and exchanging budgets and budget discussion reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-
3.14 Failuretofileabudget ...........................
-
3.15 Costsmanagementorders.........................
3.15A Revision and variation of costs budgets on account of significant developments (“variation costs”) . . . . . . . . . . .
-
3.16 Costsmanagementconferences ....................
-
3.17 Court to have regard to budgets and to take account of
costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-
3.18 Assessing costs on the standard basis where a costs
managementorderhasbeenmade ................ III. Costs Capping
-
3.19 Costscappingorders—General.....................
-
3.20 Applicationforacostscappingorder .................
-
3.21 Applicationtovaryacostscappingorder ..............
Practice Direction 3A—Striking Out a Statement of Case . . .
Practice Direction 3B—Sanctions for Non-Payment of Fees .
Practice Direction 3C—Civil Restraint Orders . . . . . . . . . . .
Practice Direction 3D—Costs Management. . . . . . . . . . . . .
PracticeDirection3E—CostsCapping ................
Practice Direction 3F—Requests for the Appointment of an Advocate to the Court . . . . . . . . . . . . . . . . . . . . . . . . . .
para.3.1 para.3.1A para.3.2 para.3.3 para.3.4 para.3.5 para.3.5A
para.3.6 para.3.6A para.3.7 para.3.7A1 para.3.7A para.3.7AA
para.3.7B para.3.8 para.3.9 para.3.10
para.3.11
para.3.12 para.3.13
para.3.14 para.3.15 para.3.15A
para.3.16 para.3.17
para.3.18
para.3.19 para.3.20 para.3.21 para.3APD.1 para.3BPD.1 para.3CPD.1 para.3DPD.1 para.3EPD.1 para.3FPD.1
67
CPR 3
3.0.4
directions in the Multi-Track
D PF 52A Shortened PF 52 in the King’s Bench Division for multi-track case and costs
management directions in Mesothelioma and Asbestosis claims
D CH1 Case Management Directions for normal use in Chancery Division (replaces Proc01A)
D CH2 Full Draft Case Management directions (replaces Proc01)
D PF 84A Request for Judgment on failure to comply with an order made under r.3.5(1)
(previously PF 85A)
D PF 84C Application for entry of judgment on failure to comply with an order made under
r.3.5(1) (r.3.5(5))
D PF 85A Application for order arising on failure to comply with a condition imposed under
r.3.1(3)
Practice Directions
Section I of this Part is supplemented by PD 3A (Striking Out a Statement of Case) (see para.3APD.1), PD 3B (Sanctions for Non-Payment of Fees) (see para.3BPD.1) and PD 3C (Civil Restraint Orders) (see para.3CPD.1). Until 1 October 2022, Pt 3 was also supplemented by PD 3D (Mesothelioma Claims). However, as a result of the 149th CPR Update (July 2022), this practice direction has been omitted from Pt 3 and now supplements Pt 49 (Specialist Proceedings): see PD 49B (para.49BPD.1).
Section II is supplemented by PD 3D (Costs Management) (see para.3DPD.1). Practice Direction 3E (Costs Capping) supplements the rules in Section III. Following the removal of the former PD 3D to Pt 49 (see above) rr.3.12, 3.15, 3.15A and 3.20 now refer to the practice directions sup- plementing Sections II and III as PD 3D and PD 3E respectively.
By CPR Update 104 (February 2019), PD 3F was added (with effect from 6 April 2019). It inserted as a Practice Direction the text of a Memorandum of Understanding agreed by the At- torney General and the Lord Chief Justice, dated 19 December 2001, on the appointment of an Advocate to the Court (amicus curiae). The Memorandum was published in previous editions of the White Book at paras 39.8.1 to 39.8.4.
I. Case Management
The court’s general powers of management1
3.1—(1) The list of powers in this rule is in addition to any powers given to the court by any other rule or practice direction or by any other enactment or any powers it may otherwise have.
(2) Except where these Rules provide otherwise, the court may—
(a) extend or shorten the time for compliance with any rule, practice
direction or court order (even if an application for extension is
made after the time for compliance has expired);
1 Amended by the Civil Procedure (Amendment No.3) Rules 2006 (SI 2006/3435), the Civil Procedure (Amendment) Rules 2013 (SI 2013/262), the Civil Procedure (Amendment No.7) Rules 2013 (SI 2013/1974), the Civil Procedure (Amendment No.4) Rules 2015 (SI 2015/1569) and the Civil Procedure (Amendment No.2) Rules 2017 (SI 2017/889).
3.1
Forms
SECTION A CIVIL PROCEDURE RULES 1998
3.0.1
3.0.2 3.0.3
Editorial introduction
D General powers, including notably, power for the court to make orders of its own initiative (rr.3.1, 3.2, 3.3 and 3.10);
added by SI 2004/2072);
D Costs management powers to ensure that parties are not required to incur costs which are
disproportionate to the matters in issue (rr.3.12 to 3.19, added by SI 2013/1974).
Section I of this Part (Case Management) (rr.3.1 to 3.11) provides the court with the powers which it is essential for the court to have in order to undertake active case management. The pow- ers fall into five main categories:
D Coercive powers (rr.3.1(3) and (5), 3.4, 3.5 and 3.7);
D Power to give relief against sanctions (rr.3.6, 3.8 and 3.9).
D Power to make civil restraint orders against parties abusing the court’s process (r.3.11,
Related sources
D Part 24 (summary judgment)
The number of court forms is vast. A selection of forms concerned with case management is listed below.
D N19 Limited Civil Restraint Order
D N19A Extended Civil Restraint Order
D N19B General Civil Restraint Order
D N244 Application Notice
D PF 52 Order in the King’s Bench Division for case management and costs management
68
(3)
(b) adjourn or bring forward a hearing;
(bb) require that any proceedings in the High Court be heard by a
Divisional Court of the High Court;
(c) require a party or a party’s legal representative to attend the court;
-
(d) hold a hearing and receive evidence by telephone or by using any other method of direct oral communication;
-
(e) direct that part of any proceedings (such as a counterclaim) be dealt with as separate proceedings;
-
(f) stay(GL) the whole or part of any proceedings or judgment either generally or until a specified date or event;
-
(g) consolidate proceedings;
-
(h) try two or more claims on the same occasion;
-
(i) direct a separate trial of any issue;
-
(j) decide the order in which issues are to be tried;
-
(k) exclude an issue from consideration;
-
(l) dismiss or give judgment on a claim after a decision on a preliminary issue;
(ll) order any party to file and exchange a costs budget;
(m) take any other step or make any other order for the purpose of
managing the case and furthering the overriding objective, includ-
ing hearing an Early Neutral Evaluation with the aim of helping
the parties settle the case.
When the court makes an order, it may—
-
(a) make it subject to conditions, including a condition to pay a sum of money into court; and
-
(b) specify the consequence of failure to comply with the order or a condition.
PART 3 THE COURT’S CASE AND COSTS MANAGEMENT POWERS
(3A) Where the court has made a direction in accordance with paragraph (2)(bb) the proceedings shall be heard by a Divisional Court of the High Court and not by a single judge.
(4) Where the court gives directions it will take into account whether or not a party has complied with the Practice Direction (Pre-Action Conduct) and any relevant pre-action protocol(GL).
(5) The court may order a party to pay a sum of money into court if that party has, without good reason, failed to comply with a rule, practice direc- tion or a relevant pre-action protocol.
(6) When exercising its power under paragraph (5) the court must have regard to—
-
(a) the amount in dispute; and
-
(b) the costs which the parties have incurred or which they may incur.
(6A) Where a party pays money into court following an order under paragraph (3) or (5), the money shall be security for any sum payable by that
party to any other party in the proceedings.
(7) A power of the court under these Rules to make an order includes a
power to vary or revoke the order.
(8) The court may contact the parties from time to time in order to moni-
tor compliance with directions. The parties must respond promptly to any such enquiries from the court.
Rule 3.1: Effect of rule
The powers listed in r.3.1(2) enable the court to carry out its duty to actively manage cases (r.1.4(1)) so as to further the overriding objective (r.1.1). The list of powers is not exhaustive (see r.3.1(1) and r.3.1(2)(m)).
Rule 3.1(2)(a): Extending (or shortening) time limits
Under r.3.1(2)(a), the court may make an order extending or shortening the time for compliance with any rule, practice direction or court order and may grant such an order retrospectively, i.e. even after the time limit in question has expired. As to the parties’ power to vary time limits by
3.1.1
3.1.2
69
CPR 3
SECTION A CIVIL PROCEDURE RULES 1998
written agreement, see r.2.11 and the commentary thereto. In the Commercial Court, if the parties agree an extension of time in writing, the claimant must notify the court (in writing, giving brief reasons) and the court may make an order overriding the agreement (PD 58 para.7, and see also Griffin Underwriting Ltd v Varouxakis [2018] EWHC 3259 (Comm); [2019] 1 W.L.R. 2529).
The court’s power under r.3.1(2)(a) to extend time does not come to an end with the drawing and entry of an order, even a final order such as an order made at trial (Omega Engineering Inc v Omega SA [2003] EWHC 1482 (Ch); The Times, 29 September 2003 (Pumfrey J). The court’s power under r.3.1(2)(a) is separate and distinct from its power under r.3.1(7) to vary or revoke an order, and the authorities relevant to r.3.1(7) cannot be applied directly, although the same factors might be relevant (Re Kingsley [2020] EWHC 2017 (Ch)).
3.1.2.1 Applications for the extension of a time limit before it has expired—An application for an extension of any time limit set by the CPR must be decided in accordance with the overriding objective of enabling the court to deal with the case “justly and at proportionate cost” (r.1.1(1)). Dealing with a case in accordance with the overriding objective “includes, so far as is practicable ... (f) enforcing compliance with rules, practice directions and orders” (r.1.1(2)). Sub-paragraph 1.1(2)(f) indicates a new regime in which courts are now less tolerant of litigants who fail to comply with procedural requirements. However, the robustness with which the courts should enforce compliance depends to some extent upon the stage in the proceedings at which an application for an extension of time is made. In applications made before the relevant time limit has expired the court should not refuse reasonable extensions of time which neither imperil hearing dates nor otherwise disrupt the proceedings (Hallam Estates v Baker [2014] EWCA Civ 661; [2014] 4 Costs L.R. 660). In Jalla v Shell International Trading and Shipping Co Ltd [2021] EWCA Civ 1559, an application to vary the substance of a case management direction as well as a time limit imposed therein was refused. Coulson LJ summarised the principles to be applied on the in-time application for an extension of time made in that case as follows: (i) the court will grant a reasonable extension if it does not impact on hearing dates or otherwise disrupt proceedings; (ii) the fact that a refusal to extend time would in practice mean the end of the claim is a factor to be weighed in the balance, but it cannot of itself warrant the grant of relief; and (iii) a claimant’s entitlement to sue a defendant is not an absolute right, and does not permit that claimant to fail to comply with court orders, or delay and disrupt the administration of justice ([29] and see further, para.3.9.11).
3.1.2.2 Applications for the extension of a time limit after it has expired—Rule 3.1(2)(a) expressly confirms the court’s power to extend time limits even after they have expired. However, in such cases, the court decides what, if any, extension of time to allow in accordance with the principles in Denton v TH White Ltd [2014] EWCA Civ 906; [2014] 1 W.L.R. 3926; see (R. (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633; [2015] 1 W.L.R. 2472; [2015] 2 Costs L.R. 191. As to the Denton principles generally, see the commentary under r.3.9.
On an application under r.3.1(2)(a) for a retrospective extension of time for the service of a judicial review claim, the court should apply r.7.6(2) by analogy (R. (the Good Law Project Ltd) v Secretary of State for Health and Social Care [2022] EWCA Civ 355; [2022] 1 W.L.R. 2339).
3.1.2.3 Extending time limits imposed by consent orders—Pre-CPR, a distinction was made between two types of consent order: orders in which the words “by consent” evidenced a real contract between the parties (i.e. a contract excluding the jurisdiction of the court to extend time) in which case the court would permit an alteration to the order only upon the same grounds upon which it would permit an alteration to any other contract. In other cases the words “by consent” were taken to mean “the parties hereto not objecting”. In the latter case there was no real contract and the court was willing to vary the order in the same circumstances as it would vary any other order (Siebe Gor- man & Co Ltd v Pneupac Ltd [1982] 1 W.L.R. 185; [1982] 1 All E.R. 377, CA). However, in Safin (Fursecroft) Ltd v Badrig’s Estate [2015] EWCA Civ 739, the Court of Appeal, after reviewing the pre- and post-CPR caselaw, held that the CPR has given the court a wide power to extend any time limits in all consent orders, including an order which resolved the substantive dispute between the parties and even where the parties have stated expressly that time is of the essence. Moreover, the discre- tion is not limited to the existence of “unusual circumstances”. Rather, the weight to be given to the fact of the parties’ agreement will depend on all the circumstances, of which the fact that the agreement was one disposing of the substantive dispute rather than a case management decision will always be highly important and often decisive. Safin was followed in Riordan v Moon Beevor Solicitors (A Firm) [2018] EWHC 1452 (QB); see also para.3.1.8, below.
In Safin the Court of Appeal neither approved nor disapproved earlier case law on the power of the court to discharge or vary undertakings given to the court. Di Placito v Slater [2003] EWCA Civ 1863; [2004] 1 W.L.R. 1605, in which the Court of Appeal considered Eronat v Tabbah [2002] EWCA Civ 950 and especially the observations of Mance LJ at [20] and [21] of that case, is author- ity that the discretion of the court to discharge or modify a time limit contained in a voluntary undertaking can only be exercised if there are “special circumstances”.
3.1.2.4 Time limits which cannot be extended by applications under r.3.1(2)(a)—The court’s power under r.3.1(2)(a) cannot be invoked to extend a time limit imposed by statute, for example, the time limit for an appeal to the High Court from an extradition order made by a magistrates’ court imposed by the Extradition Act 2003 s.26(4), unless of course the statute so provides (Mucelli v Government of Albania [2009] UKHL 2; [2009] 1 W.L.R. 276, HL); see PD 52D para.3.5.
70
PART 3 THE COURT’S CASE AND COSTS MANAGEMENT POWERS
Rule 3.1(2)(a) does not empower the court to extend the time for serving a claim form. This is because rule 3.1(2) gives the court powers “except where these Rules provide otherwise” and rule 7.6(3), by its inclusion of the words “only if” does provide otherwise (Vinos v Marks & Spencer Plc [2001] 3 All E.R. 784, CA). A claimant cannot circumvent the restrictions in r.7.6(3) by applying under r.3.9 (Relief from Sanctions) or r.3.10 (general power of the Court to rectify matters where there has been an error of procedure) (Kaur v CTP Coil Ltd [2001] C.P. Rep. 34; Elmes v Hygrade Food Products Plc [2001] EWCA Civ 121). Contrast the regime which applies to particulars of claim: although they must be served “no later than the latest time for serving a claim form” (r.7.4(2)) an extension of time for service may be granted even after that latest time has passed (Totty v Snowden [2001] EWCA Civ 1415; [2002] 1 W.L.R. 1384; [2001] 4 All E.R. 577).
The court has no jurisdiction under r.3.1(2)(a) to extend time for payment under a Part 36 offer as Pt 36 is a self-contained code; Titmus v General Motors UK Ltd [2016] EWHC 2021 (QB) (Elizabeth Laing J).
The court’s general case management powers under r.3.1(2)(a) to extend time periods specified in an Order of the court are not cut down by r.3.8 (sanctions to have effect unless defaulting party obtains relief): a time limit in an order imposing sanctions for delay can be extended even if no ap- plication is made under r.3.8 for relief from sanctions; see Marcan Shipping (London) Ltd v Kefalas [2007] EWCA Civ 463; [2007] 1 W.L.R. 1864; and see 3.8.1.
As to the criteria to be applied on applications under r.52.15 to extend the time for appealing, see paras 52.12.3 and 52.15.3.
For discussion of the defendant’s ECHR art.6(1) right to a fair trial within a reasonable time in the context of an application by a claimant to extend time, see Woodhouse v Consignia Plc [2002] EWCA Civ 275 at [43]–[44]; [2002] 1 W.L.R. 2558 and Price v Price [2003] EWCA Civ 888 at [34]– [35]; [2003] 3 All E.R. 911. ECHR art.13 requires the state to provide an effective domestic law remedy to allow a claimant to complain about a failure to provide a hearing within a reasonable time: Kudla v Poland App.30210/96 (2002) 35 E.H.R.R. 11, ECtHR.
Extending time limits imposed by unless orders—An unless order is an aggressive form of conditional order (see further, para.3.1.14.2) which is used where parties are being given one final chance to comply with some obligation previously imposed upon them; it debars parties from pursuing their claim, defence or counterclaim unless, within a specified period of time, they meet the terms of the order. It is more difficult to get relief from sanctions in respect of a breach of an unless order than it is from the breach of a simple conditional order (see Khandanpour v Chambers [2019] EWCA Civ 570 noted in para.3.9.4).
In Everwarm Ltd v BN Rendering Ltd [2019] EWHC 2078 (TCC); [2019] 4 W.L.R. 107 an ap- plication was made to extend a deadline imposed by an unless order shortly before that deadline had been reached; it was held that, in these circumstances, the court should follow the approach taken in Hallam Estates v Baker (see above) rather than Denton v TH White (see above) but should also take into account the powerful public interest there is in ensuring compliance with unless orders.
“An in-time application made shortly after the ‘unless’ order was first imposed is likely to be treated differently from one made just before the time allowed for compliance was about to expire. However, that factor may carry less significance in a case where the period for compli- ance was already short” (at [40]).
In British Gas Trading Ltd v Oak Cash & Carry Ltd [2016] EWCA Civ 153; [2016] 1 W.L.R. 4530, CA, an application was made to extend a deadline imposed by an unless order shortly after that deadline had passed; the Court of Appeal applied the principles in Denton v TH White (see above) and, in doing so, took into account, not just the breach of the order itself, but also the underlying breach which had led to the making of the order; this turned the breach into a major breach and relief from sanctions was withheld (see further, para.3.9.4).
Rule 3.1(2)(b): Adjourning (or bringing forward) hearings
In determining whether to grant an adjournment the court must have regard to the overriding objective. Therefore the court should deal with appellant’s case in a manner which saves expense, is proportionate to the amount of money involved and allocates to it an appropriate share of the court’s resources (Boyd & Hutchinson (A Firm) v Foenander [2003] EWCA Civ 1516; (court proceed- ing to hear appeal where appellant made late application for adjournment on basis that it would refuse an adjournment if it concluded that the appeal had no prospect of success, rather than simply putting the point off to a future occasion)). For an example of circumstances in which a trial judge’s (1) refusal to grant a defendant an adjournment of a trial, with the result that the trial proceeded in their absence, and (2) subsequent refusal to set aside that judgment under r.39.3(3), were upheld on appeal, see National Westminster Bank v Aaronson [2004] EWHC 618 (QB); (Royce J) (neither decision exceeded the generous ambit within which a reasonable disagreement is possible).
A refusal to adjourn a hearing pursuant to r.3.1(2)(b) was unsuccessfully challenged in Daisystar Ltd v Woolwich Plc, 16 March 2000, unrep., CA. See also Lloyds Bank Plc v Dix, 26 October 2000, unrep., CA (adjournment would have made no material difference to the outcome of the litigation in view of the weakness of the appellants’ case) and Serene Construction Ltd v Barclays Bank Plc [2016] EWCA Civ 1379, CA (upholding a refusal to grant more than a brief adjournment of the
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defendants’ summary judgment application; although formal notice of it had not been served 14 days before the hearing (as required by r.24.4(3)(a)) the claimant had received informal notice several weeks earlier).
In Bowden v Homerton University Hospital NHS Foundation Trust [2012] EWCA Civ 245, liability had been admitted and trial on quantum was fixed to take place on 12 January 2012. On 21 December 2011 an order was made that the claimant’s solicitors come off the record. On 29 December 2011 the claimant, acting as a litigant in person, issued an application to adjourn the trial to allow him to obtain fresh representation. The judge refused that application on 4 January 2012. The Court of Appeal held that the judge had failed to give adequate weight in the balancing of prejudice to the extremely difficult position that the claimant would be in if they had to represent themselves. The overriding factor was the dilemma into which the claimant had been placed shortly before Christmas in circumstances which the judge expressly said were not his fault.
If, at a hearing, the court makes a decision in respect of which one party wishes to request that court’s permission to appeal, the request for permission must be made immediately, i.e., at the hearing at which the decision is made (r.52.3(2)(a)). Parties seeking more time in which to request permission to appeal, from the court which made the decision, can make an oral application for an adjournment of the hearing (see PD 52A para.4.1(a)).
In Cook v Cook [2011] EWHC 1638 (QB); [2011] P.I.Q.R. P18, Eady J, a personal injury claim, the long term prognosis for the 10-year-old claimant was speculative and uncertain. There was expert evidence that there were too many uncertainties and risk factors to attempt a final prognosis. Whilst recognising that it was a very exceptional course to take, Eady J, exercising the court’s pow- ers under r.3.1, directed that the forthcoming quantum trial should be confined to the determina- tion of damages up to the claimant’s 16th birthday, with the assessment of longer term losses being adjourned until such time as solid evidence becomes available, so avoiding the need for speculation and achieving a more accurate and realistic assessment of the claimant’s actual needs.
Where a litigant in person requests an adjournment on the ground of ill-health the court should be slow to refuse, provided that it is their first request and their case has some prospect of success: Fox v Graham Group Ltd, The Times, 3 August 2001, Neuberger J. It is to be noted that the court had evidence to show real grounds for thinking that the application for an adjournment was genuinely based.
The principles upon which a court should proceed when faced with an application to adjourn on medical grounds are helpfully rehearsed in the decision of Warby J in Decker v Hopcraft [2015] EWHC 1170 (QB). The court must carefully scrutinise the medical evidence in support of an ap- plication to adjourn.
“Such evidence should identify the medical attendant and give details of his familiarity with the party’s medical condition (detailing all recent consultations), should identify with particularity what the patient’s medical condition is and the features of that condition which (in the medical attendant’s opinion) prevent participation in the trial process, should provide a reasoned prognosis and should give the court some confidence that what is being expressed is an independent opinion after a proper examination. It is being tendered as expert evidence. The court can then consider what weight to attach to that opinion, and what arrangements might be made (short of an adjournment) to accommodate a party’s difficulties. No judge is bound to accept expert evidence: even a proper medical report falls to be considered simply as part of the material as a whole (including the previous conduct of the case).” per Norris J, in Levy v Ellis-Carr [2012] EWHC 63 (Ch).
Norris J’s approach was expressly approved by the Court of Appeal in Forrester Ketley v Brent [2012] EWCA Civ 324 at [26] and in Mohun-Smith v TBO Investments Ltd [2016] EWCA Civ 403; [2016] 1 W.L.R. 2919 at [25]; and see also General Medical Council v Hayat [2018] EWCA Civ 2796 at [38].
In Solanki v Intercity Telecom Ltd [2018] EWCA Civ 101; [2018] 1 Costs L.R. 103 it was held that a trial judge had been wrong to refuse the defendant’s application to adjourn a trial. The trial judge had given no sufficient reason for disregarding the defendant’s comprehensive medical evidence and the refusal to adjourn was unfair. The Court of Appeal cited with approval the guidance given by Peter Gibson LJ in Teinaz v Wandsworth LBC [2002] EWCA Civ 1040; [2002] I.C.R. 1471, which was to the effect that, given ECHR Art.6, a litigant whose presence is needed for the fair trial of a case, but who is unable to be present through no fault of his own, will usually have to be granted an adjournment, however inconvenient it may be to the tribunal or court and to the other parties. But the tribunal or court is entitled to be satisfied that the inability of the litigant to be present is genuine, and the onus is on the applicant for an adjournment to prove the need for such an adjournment (and see further, para.39.3.7.2, below). If the court has doubts about the medical evidence in support of an application to adjourn, the court has a discretion to give to give direc- tions to enable the doubts to be resolved; such as: that further evidence be provided promptly; or (according to Peter Gibson LJ) that the party seeking the adjournment should be invited to authorise the legal representatives for the other side to have access to the doctor giving the advice in question. All must depend on the particular circumstances of the case.
Rule 3.1(2)(bb): Assigning High Court cases for hearing by a Divisional Court of the High Court
If a direction is made under r.3.1(2)(bb) the proceedings will be heard by a Divisional Court of the High Court and not by a single judge (r.3.1(3A)). A Divisional Court is simply a court,
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constituted of not less than two judges, to conduct such business of the High Court as is (by rules of court or by statute) required to be heard by a Divisional Court (Senior Courts Act 1981 s.66(1) and (3); Vol.2 para.9A-245). In times past, Divisional Courts have been convened to hear cases of great complexity or public importance, and to exercise the High Court’s appellate or supervisory jurisdictions over inferior courts. Many judicial review hearings are allocated to a Divisional Court of the King’s Bench Division. Although Divisional Courts may be constituted in each of the divi- sions of the High Court (i.e., the Chancery Division, the Family Division and the King’s Bench Division) every judge of the High Court is qualified to sit in any Divisional Court (Senior Courts Act 1981 s.66(4)).
Rule 3.1(2)(bb) states expressly what was previously regarded as implicit in the general powers of the court, namely, the power to require proceedings to be heard by a Divisional Court in appropri- ate circumstances where this will further the overriding objective by enabling the court to deal with cases justly and at proportionate cost. In particular, the court may direct a High Court matter to be heard by a Divisional Court of the High Court or of a Division of the High Court. Any Divisional Court may be constituted of judges drawn from a specified Division of the High Court, or indeed from different divisions of the High Court; for example, proceedings concerning matrimonial property raising complex issues that require the expertise of judges of both the Family and Chancery Divisions.
Rule 3.1(2)(c): Requiring a party or a party’s legal representative to attend the court
Rule 3.1(2)(c) gives the court a power to require the attendance at court of a party’s legal representative where the court considers such attendance necessary having regard to the overriding objective of dealing with a case justly and at proportionate cost (as to which, see further r.1.1). In cases allocated to the multi-track, the attendance obligations of a represented party are specified in a rule: if a party has a legal representative, all case management conferences and pre-trial reviews must be attended by a representative who is familiar with the case and who has sufficient authority to deal with any issues that are likely to arise (see below, r.29.3(2) and the commentary thereto).
If it considers it appropriate to do so the court may also require the personal attendance of a party in addition to that party’s legal representative. Such a direction may be appropriate, having regard to the overriding objective (see above) where the court wishes to facilitate settlement if the court takes the view that the case before it is one which the parties should strive to settle (Tarajan Overseas Ltd v Kaye [2001] EWCA Civ 1859; and see Baron v Lovell [2000] P.I.Q.R. P20, at P27). Such a direction may also be appropriate if the court wishes to ensure that the party knows and understands the manner in which the claim is being conducted and the possible costs consequences thereof. Making a direction for the personal attendance of a represented party may be appropriate where the court presently considers that the approach being taken in the conduct of that party’s case is unrealistic (and see further as to this, r.44.8 and para.44.8.1). An order for personal attend- ance will usually also be appropriate where the court has made an order for early neutral evalua- tion (as to which, see para.3.1.13.1 and Lomax v Lomax [2019] EWCA Civ 1467 at [31]). If an order is made which simply directs a party to attend, that party may attend either in person or by counsel (see Falmouth House Ltd v Abou-Hamdan [2017] EWHC 779 (Ch) (para.3.9.13)).
Rule 3.1(2)(d): Conducting hearings by telephone or by any other method of direct oral communication
Nearly all district registries of the High Court and County Court hearing centres have facilities to deal with interim applications by telephone. For such courts PD 23 para.6.2 states a general rule that all interim applications, case management conferences and pre-trial reviews will be conducted by telephone if they have a time estimate of less than one hour. Guidance as to arranging and conducting hearings by telephone is set out in PD 23 para.6.9 (para.23APD.6).
Applications falling within PD 23 para.6.2 (see above) may be conducted by telephone whether or not all or any parties consent. Practice Direction 23A para.6.4 states the procedural steps to be taken by a party who wants such a hearing to be conducted in person: on receipt of a letter to the court explaining why a telephone hearing is unsuitable (for example, the application demands the exercise of judgment in a difficult factual matrix, where the consequences are likely to be very significant) the court will decide whether or not to have a hearing by telephone without requiring the attendance of the parties.
Practice Direction 23 para.6.3 provides a list of cases excepted from the general rule in favour of telephone hearings stated in PD 23 para.6.2 (see above): an application made without notice to the other party, or where all the parties are unrepresented, or where more than four parties wish to make representations at the hearing (for this purpose where two or more parties are represented by the same person, they are treated as one party).
Rule 3.16(2) states that most hearings convened solely for the purposes of costs management (see para.3.12.2) will be conducted either by telephone or in writing.
Copies of documents any party wishes to rely upon at the hearing must be filed and served at least two days before the hearing. In multi-track cases the applicant must also file a case summary and a draft order by the same deadline (PD 23A paras 6.11 to 6.13).
Hearings other than those listed in PD 23A para.6.2 may also be heard by telephone. The ap- plicant can make that request on the application notice. Any other party can also apply. Normally the court will make such an order only if all the parties consent (PD 23 para.6.5).
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On an application being heard by telephone, neither a party, nor a party’s legal representative, can attend the judge in person unless every other party to the application has agreed (PD 23A para.6.9).
Guidance as to arranging and conducting hearings by video-conferencing is set out in Annex 3 to PD 32 (and see further, para.32.3.1).
Rule 3.1(2)(e): Directing that part of any proceedings (such as a counterclaim) be dealt with as separate proceedings
A claimant may use a single claim form to start two or more claims “which can be conveniently disposed of in the same proceedings” (r.7.3). A defendant may, without the court’s permission, make a counterclaim against the claimant provided that he files it with his defence (r.20.4(2)(a)). Rule 3.1(2)(e) gives the court power to divide those proceedings as if into separate proceedings if it considers that their joinder into a single proceeding will lead to inconvenience.
Rule 3.1(2)(f): Staying proceedings
The term “stay” is defined in the Glossary (see Section E). The making of a stay imposes a halt, not only upon proceedings, but also upon the expiration of any time limit in those proceedings which had not expired when the stay was imposed. An order staying proceedings applies to every step otherwise required by the CPR, including the obligation to serve a claim form issued before the stay was imposed. When the stay is lifted, or the stay expires, the position as between the parties is the same as it was at the moment that the stay was imposed. The parties (and the court) pick up where they left off at the time of the imposition of the stay (Grant v Dawn Meats UK [2018] EWCA Civ 2212).
The circumstances in which a stay may be appropriate are many and various (see further, Vol.2 paras 9A-176 to 9A-196 and, as to stays of proceedings on the grounds of improper collateral purpose; see para.3.4.9). As to the court’s jurisdiction to stay the effect of a consent order, see Riordan v Moon Beevor Solicitors (A Firm) [2018] EWHC 1452 (QB) in which Foskett J adopted and applied the principles applicable to the court’s power to grant an extension of any time limits in consent orders (as to which, see Safin (Fursecroft) Ltd v Badrig’s Estate [2015] EWCA Civ 739, noted in para.3.1.2.3, above).
Rule 3.1(2)(f) expressly refers to the court’s power to stay judgment, that is to say, the enforce- ment or execution of a judgment. However, this power is limited by the opening words of r.3.1(2): “Except where these Rules provide otherwise”. Rule r.3.1(2)(f) does not apply to applications to stay a money judgment since they are governed by r.83.7; The court’s discretion under that rule is exercisable only where the court is satisfied that “(a) there are special circumstances which render it inexpedient to enforce the judgment or order; or (b) the applicant is unable from any reason to pay the money ...” (r.83.7(4); Michael Wilson & Partners Ltd v Sinclair [2017] EWCA Civ 55); [2017] 1 W.L.R. 3069.
3.1.8.1 Stay of proceedings—pending medical examination—In a personal injury action, the court has the power under its inherent jurisdiction and under r.3.1(2)(f) to order the stay of proceedings until such time as the claimant has agreed to an examination by the defendant’s medical experts or until they have undergone medical tests. The decision whether to grant a stay involves the exercise of the court’s discretion. A refusal to undergo an ordinary examination is likely to result in a stay; see Starr v NCB [1977] 1 W.L.R. 63; [1977] 1 All E.R. 243, CA. Where the examination involves discomfort or risk of injury the question of whether a stay should be granted is more difficult. In Laycock v Lagoe [1997] P.I.Q.R P518, CA; (defendant seeking MRI scan—stay refused), Kennedy LJ set out the approach which the court should adopt on an application for such a stay. There is a two- stage test:
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“First, do the interests of justice require the test which the defendant proposes? If the answer to that is in the negative, that is the end of the matter. If the answer is ‘yes’, then the court should go on to consider whether the party who opposes the test has put forward a substantial reason for that test not being undertaken; a substantial reason being one that is not imaginary or illusory. In deciding the answer to that question, the court will inevitably take into account, on the one hand the interests of justice in the result of the test and the extent to which the result may progress the action as a whole; on the other hand, the weight of the objection advanced by the party who declines to go ahead with the proposed procedure, and any asser- tion that the litigation will only be slightly advanced if the test is undertaken. But if the [claimant], for example, has a real objection, which he articulates, to the proposed test, then the balance will come down in his favour.”
Rule 3.1(2)(g) and (h): Consolidating proceedings or directing the trial of two or more claims on the same occasion
The effect of the consolidation of proceedings is to combine two or more claims so that they will proceed thereafter as one claim (r.3.1(2)(g)). Whether or not the several proceedings are ultimately tried together, this can bring the benefits of avoiding the costs and delays involved in a multiplicity of pleadings, of pre-trial steps taken by the parties, and of interlocutory applications. The achieve- ment of this objective (reflecting the overriding objective) is more likely to be accomplished if the order for consolidation is made early in the proceedings. Where an application is made late in the
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development of the proceedings to be consolidated the costs involved (e.g. in re-drafting the plead- ings) may be sufficiently substantial to tip the scales against an order, especially where the principal advantages sought to be gained by an order (e.g. the admissibility of the evidence in one case in another) could be gained by an order that the two claims should be tried together (r.3.1(2)(h)). Aspects of the overriding objective other than those concerned with cost and delay may also be engaged in the question whether consolidation should be ordered (e.g. ensuring that the parties are on an equal footing and dealing with the case in ways which are proportionate). Upon investigation it may be recognised that the advantages sought to be achieved by an application for consolidation may be achieved by an order under r.3.1(2)(h) for the several claims to be tried on the same occa- sion and that an order for consolidation is neither desirable nor necessary.
An application for consolidation should be made as soon as it becomes apparent that it is neces- sary or desirable to make it and it should be made so that it can be considered at any other hearing for which a date has already been fixed or is about to be fixed; see: PD 23A para.2.7 and 2.8. Most typically this is likely to be at the case management conference.
Two claims cannot be consolidated where the claimant in one claim is the defendant in the other, unless one claim can be ordered to stand as a Pt 20 claim in the other.
Where there are co-claimants in a claim, if they are legally represented they must be jointly represented by the same legal representatives unless it is specially ordered otherwise, or is expressly provided otherwise (e.g. PD 57 (Probate) para.17 (Separate representation of claimants with conflict of interests)). If separate representation were permitted, many difficult problems could arise, especially at trial (Lewis v Daily Telegraph (No.2) [1964] 2 Q.B. 601, CA, at 620–621 per Pearson LJ; see also Black King Shipping Corp v Massie (1984) 134 N.L.J. 887). This rule can cause complications where the effect of the consolidation of several proceedings would be to bring together as co-claimants in the single claim parties represented by different firms of solicitors and counsel. Where consolidation is ordered, usually one firm of solicitors will be given the conduct of the claim on behalf of all claimants thus maintaining the rule of joint representation. Where there are several proceedings brought by different claimants, with different legal representation, in which damages are claimed for personal injuries occasioned in the same accident, it may be pos- sible to consolidate the proceedings up to the point where the issue of liability is decided, giving the conduct of the proceedings up to that point to one claimant’s solicitors, and leaving the proceedings separate upon the issues as to the quantum of damages payable to the several claim- ants (Healey v A. Waddington & Sons Ltd [1954] 1 W.L.R. 688, CA). The better course may be for the court not to order such “partial consolidation”, but to order that one claimant’s claim should proceed to the trial of liability with the other claimants’ claims being stayed pending the outcome, especially where the other claimants are prepared to consent to an order that they should be bound by the decision on liability.
Rule 3.1(2)(i): Directing a separate trial of any issue
In McLoughlin v Grovers (A Firm) [2001] EWCA Civ 1743; [2002] Q.B. 1312 at [66], David Steele J gave the following guidance: (i) only issues which are decisive or potentially decisive should be identified; (ii) the questions should usually be questions of law; (iii) they should be decided on the basis of a schedule of agreed or assumed facts; (iv) they should be triable without significant delay, making full allowance for the implications of a possible appeal; (v) any order should be made by the court following a case management conference.
As to (i) (see above, issue should be decisive or potentially decisive), trying one issue separately can sometimes lead to huge savings in costs and delays if that issue is or may be determinative of the whole proceedings, or if a court decision upon it is likely to assist the parties to resolve other issues by means of settlement or ADR. However, there is always a risk that an order directing a preliminary issue will lead to unnecessary expense and delay if a decision on that issue will not be decisive of the litigation either way (because, for example, there are other bases of claim independ- ent of it; Woodland Trust v Essex CC [2013] UKSC 66; [2014] A.C. 537 at [2]) or if the preliminary issue is drafted in terms which are too vague to reveal the precise issue the court has to decide (FPH Law (A Firm) v Brown [2018] EWCA Civ 1629; [2018] Costs L.R. 823).
As to (ii) (see above, preliminary issues should usually relate to questions of law), although they are intended to short circuit proceedings, separate trials may actually increase the time and cost of resolving the underlying dispute, for example, if witnesses called to the first trial also have to be called to the second trial. “Preliminary points of law are too often treacherous shortcuts. Their price can be, as here, delay, anxiety and expense” (Tilling v Whiteman [1980] A.C. 1, Lord Scarman). Issues frequently identified for separate trial include limitation defences, questions of construction of a document and disputes as to the validity and effect of exclusion clauses. In Lachaux v Independ- ent Print Ltd [2017] EWCA Civ 1334; [2018] E.M.L.R. 1; [2018] 2 W.L.R. 387; [2018] Q.B. 594, the Court of Appeal stated that in a defamation case the courts should be slow to direct a preliminary issue involving substantial evidence on a dispute as to whether serious reputational harm had been caused or was likely to be caused by a published statement. The court was evidently concerned about the risk of preliminary issues running up costs in a way inimitable to the overrid- ing objective. Lachaux was cited in Hope Not Hate Ltd v Farage [2017] EWHC 3275 (QB), Warby J, but, on the facts, the trial of such an issue was directed as the circumstances were unusual and exceptional, the evidential investigation was likely to be modest, and the parties had previously agreed to a preliminary issue hearing.
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In Sharn Panesar Ltd v Pistachios in the Park Ltd [2020] EWHC 194 (QB), a judge conducting a trial of certain preliminary issues of fact, made findings as to those issues and also as to issues of fact upon some other matters (the “extraneous issues”). On an appeal to the High Court, Murray J ruled that the order made at the preliminary trial should be quashed and the matter should be remitted for a full trial of all issues before a different judge. The conduct of the preliminary trial had been unjust due to serious procedural irregularity: there had not been a proper hearing as to the extraneous issues. That irregularity had tainted the whole of the hearing; it was impossible to be sufficiently confident that the findings made upon the extraneous issues had not materially influenced the findings made upon the preliminary issues themselves.
As to (iii) (see above, preliminary issues should be decided on the basis of a schedule of agreed or assumed facts), the first draft of the schedule is often prepared by the claimant and sent to the defendant for agreement or amendment. Before directing a preliminary issue the court should consider how much effort will be involved in identifying the relevant facts. The greater the effort the less likely it is that the preliminary issue will lead to a saving in costs. If there are serious disputes of fact giving judgment at a trial of the preliminary issue may be unsafe or useless (see generally Steele v Steele [2001] C.P. Rep 106 in which Neuberger J (as he then was) declined to give judgment at a separate trial previously directed by a deputy judge of the High Court).
As to (iv) (see above, triable without significant delay, making full allowance for the implications of a possible appeal) in Re Kenyan Emergency Group Litigation [2016] EWHC 600 (QB) (in which a direction for the trial of preliminary issues was allowed in part only) one of the factors considered was that, in the event of an appeal on one of the preliminary issues sought, the trial of all remain- ing issues might be delayed by three or four years by which time most of the lay witnesses for both sides (who were very elderly) may not have been capable of giving evidence.
As to (v) (see above, any order should be made by the court following a case management conference), it is important to formulate a preliminary issue with care and precision (Lahey v Pirelli Tyres Ltd [2007] EWCA Civ 91; [2007] 1 W.L.R. 991 at [5]).
Detailed guidance as to preliminary issues is given in the Technology and Construction Court Guide (Vol.2 para.2C-43; and see also the Chancery Guide (Vol.2 para.1A-159), the King's Bench Guide (Vol.2 para.1B-59), the Admiralty and Commercial Courts Guide (Vol.2 para.2A-108)).
Rule 3.1(2)(j), (k) and (l): Deciding the order in which issues are to be tried, excluding an issue from consideration and dismissing or giving judgment on a claim after a decision on a preliminary issue
In practice the case management powers mentioned in subparas (j), (k) and (l) of r.3.1(2) are usually left for exercise by the court conducting a pre-trial review or conducting the trial itself or the trial of a preliminary issue (as to which, see para.3.1.10, above).
In Crown House Technologies Ltd v Cardiff Commissioning Ltd [2018] EWHC 323 (TCC), acting under r.3.1(2)(k), Coulson J made an order limiting one of the claimant’s claims (a claim for supervision costs) to the sum of £9,702.65, that being a sum less than one tenth of the full sum claimed (over £200,000). That order was also made in consequence of the court’s inherent powers, and as part of the claimant’s application for relief from sanctions (for failing to comply timeously with an order for disclosure). In respect of the claim for supervision costs, the claimant’s disclosure list (served late) revealed invoices amounting to the limited sum only, and the claimant had failed to explain how the full sum had been calculated and had admitted that it would not file evidence in support of the full sum by the deadline previously fixed for exchanging witness statements.
Rule 3.1(2)(ll): Ordering any party to file and exchange a costs budget
A case management power to order a party to exchange and file a budget (r.3.1(2)(ll)) was first added to r.3.1(2) in 2005 (the original wording being to “file and serve an estimate of costs”). The rule-maker’s intention at that time was to encourage the judge exercising case management powers to set a cap on the amount of costs which one party may recover from their opponents should they later obtain a costs order in their favour. Such orders (then called “prospective costs cap orders” (see Leigh v Michelin Tyre Plc [2003] EWCA Civ 1766; [2004] 1 W.L.R 846; [2004] 2 All E.R. 175)) were intended to have a significantly beneficial effect in keeping costs within bounds and concentrating minds on keeping costs proportionate throughout the litigation. However this expres- sion of the court’s case management powers has, since 2013, been largely overtaken by Pt 3 Section II (Costs Management) which makes the control of the recoverability of costs between parties an integral part of case management in almost all cases provisionally allocated to the multi-track and also in any other case in which the court makes a costs management order (see further para.3.12.1).
Rule 3.1(2)(m): Making other orders for the purpose of managing the case and furthering the overriding objective, including hearing an Early Neutral Evaluation
As to procedural matters, r.3.1(2)(m) codifies, or at any rate duplicates, the court’s inherent jurisdiction to make any order which it is necessary to make if the court is to act effectively (see further Vol.2, para.9A-68). The case of Bradbury v Paterson [2014] EWHC 3992 (QB) Foskett J, il- lustrates the potential breadth of r.3.1(2)(m). In this case, the Official Solicitor applied to be discharged as litigation friend for the first defendant, a protected party, on the basis that the anticipated source of funding for the Official Solicitor’s costs had ceased to be available. This left
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the question of how the claim was to proceed without a litigation friend. Foskett J, stated that the court had the power under its general case management provisions under r.3.1(2)(m) and/or the inherent jurisdiction of the court to direct that one or more of the parties to the litigation should fund the Official Solicitor’s costs of instructing lawyers for the first defendant, the initial outlay to be recoverable as part of the costs of the litigation in due course.
In Agents Mutual Ltd v Moginnie James Ltd [2016] EWHC 3384 (Ch) Master Marsh held that r.3.1(2)(m) gave the court power to permit amendments to be made to application notices (see further, para.17.0.1).
In XYZ v Various Companies [2013] EWHC 3643 (QB); [2014] 2 Costs L.O. 197, the claimants in group litigation applied for an order that one of the defendant companies provide information as to the nature and extent of its liability insurance cover in respect of its potential liability in these proceedings pursuant to Pt 18 or r.3.1(2)(m). Thirlwall J held that there was no jurisdiction to make the order sought under Pt 18 as the company’s insurance position was not a matter of dispute in the proceedings. However, having found that the company might not be able to fund the litiga- tion to trial or meet any award of damages or costs, the judge held that r.3.1(2)(m) gave the court the power to order the company to provide a witness statement setting out whether it had adequate insurance to fund its participation in the litigation to the conclusion of the trial and any appeal. That knowledge would permit the court to case manage the litigation on the basis of adequate information which was in accordance with the overriding objective. However, whether or not the claimants could enforce an award for damages or costs was not a matter of case management. Ac- cordingly, the judge declined to use r.3.1(2)(m) to order that the company to provide information as to whether it could meet an award of damages or costs. In QX v Secretary of State for the Home Depart- ment [2022] EWCA Civ 1541, the Court of Appeal ruled that the order made in XYZ requiring one party to provide a witness statement relevant to case management issues, did not breach the general rule that, in respect of the substantive issues to be determined at the trial, a court has no power to order one party to call as a witness, a person whom that party does not wish to call.
Early Neutral Evaluation—Reference to Early Neutral Evaluation (ENE) was inserted into r.3.1(2)(m) by the Civil Procedure (Amendment No.4) Rules 2015 (SI 2015/1569) and came into force on 1 October 2015. ENE is a form of dispute resolution which involves an independent person, with relevant expertise, expressing an opinion about a dispute, or an element of it. Although that opinion does not bind either party, it may assist them to settle the whole or part of the case (see in particular the decision of HH Judge Birss as he then was in Fayus Inc v Flying Trade Group Plc [2012] EWPCC 43).
For some years now ENE has been a major component in the Financial Dispute Resolution (FDR) appointment, practised in the Family Division (as to which, see further, Family Procedure Rules 2010 r.9.17 and Family Dispute Resolution Appointments: Best Practice published by the Family Justice Council in December 2012 (https://www.judiciary.uk/wp-content/uploads/2014/10/fjc_financial_ dispute_resolution.pdf)). It is not appropriate for the judge conducting an FDR appointment to determine heavily disputed issues of fact. Also, if settlement is not reached, the judge hearing the FDR appointment has only a very limited role in any further proceedings in the matter.
In Lomax v Lomax [2019] EWCA Civ 1467; [2019] 1 W.L.R. 6527, the Court of Appeal ruled that the wording of r.3.1(2)(m) did not contain a requirement for the parties to consent to ENE and it would be contrary to the overriding objective to imply one. ENE was a process which assisted with the fair and sensible resolution of a case. The court ruled as incorrect the statements made in several court guides to the effect that ENE cannot be ordered unless all relevant parties consent. An ENE hearing is not an obstruction to parties’ access to the courts; it is part of the court process (Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 and Seals v Williams [2015] EWHC 1829 (Ch) considered). If an order for ENE is made it will usually be appropriate to include an order for the personal attendance of the parties so that they will hear directly the judge’s evalua- tion of the case ([31]). In Telecom Centre (UK) Ltd v Thomas Sanderson Ltd [2020] EWHC 368 (QB) Master McCloud gave guidance on the approach to be taken to ENE in the King’s Bench Division in the absence of guidance in the King’s Bench Division Guide. The Master also annexed to her judgment a template draft ENE order for use in the King’s Bench Division.
Rule 3.1(3): Making orders subject to conditions
In order to encourage a party to carry out their duty to help the court to further the overriding objective (r.1.3) an order may be made subject to conditions and may specify the consequence of failure to comply with an order or a condition (r.3.1(3)). The court is not required to impose an express sanction for failing to comply with an order or condition. Even if no express sanction is stated the court may later strike out all or part of a statement of case of a party who fails to comply with the order (see further r.3.4).
Any conditions imposed should be expressed clearly and precisely (Morgans v Needham, Times 5 November 1999, CA). The condition must be one which is capable of being complied with; an impecunious party should not be ordered to pay a sum of money which they are unlikely to be able to raise (MV Yorke Motors v Edwards [1982] 1 W.L.R. 444; [1982] 1 All E.R. 1024, HL). The principles to be applied here were reconsidered and re-stated by the Supreme Court in Goldtrail Travel Ltd v Aydin [2017] UKSC 57; [2017] 1 W.L.R. 3014:
(i) The court should not impose a condition upon a party which has the effect of stifling that party’s continued participation in the proceedings. The burden of proof as to the stifling effect of a condition falls upon the party alleging it.
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(ii) In order to prove the stifling effect of a financial condition, a party must establish, on the balance of probabilities, that he does not have the means to comply with the condi- tion and cannot raise the necessary sums from friends, relatives or business associates willing to help him in his hour of need.
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(iii) Where a company and its owner or majority shareholder refute a submission that funds would be made available, the court should not take the refutation at face value. It should judge the probable availability of the funds by reference to the underlying realities of the company’s financial position; and by reference to all aspects of its relationship with its owner or majority shareholder, including the extent to which he was directing its affairs and had supported it in financial terms.
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(iv) In the case of a corporate party, the shareholder’s distinct legal personality (which has always to be respected save where he has sought to abuse the distinction: Prest v Prest [2013] UKSC 34; [2013] 2 A.C. 415, 487, at [34]) must remain in the forefront of its analysis. The question should never be: can the shareholder raise the money? The ques- tion should always be: can the company raise the money?
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(v) If it is established that the owner or majority shareholder of a party will not advance the necessary funds it is wrong to consider whether that person nevertheless has the means to do so. On this point the Supreme Court unanimously disapproved certain statements made in earlier Court of Appeal cases (Hammond Suddard Solicitors v Agrichem International Holdings Ltd [2001] EWCA Civ 2065; [2002] C.P. Rep. 21; Société Générale SA v Saad Trad- ing, Contracting and Financial Services Co [2011] EWCA Civ 695) to the effect that, in exceptional cases, it was appropriate to consider whether a shareholder could advance the necessary funds even though it had been proved that he would not do so.
In Goldtrail, the appellant company’s permission to appeal had been made subject to conditions requiring, amongst other things, the payment into court of a sum equal to the judgment debt it was seeking to appeal from. Subsequently the respondent applied for an order dismissing the appeal for non-performance of the conditions imposed on the permission to appeal and the appellant ap- plied for an order discharging the condition in relation to the judgment debt. Patten LJ refused the appellant’s application and granted the respondent’s application. On the appellant’s appeal against those decisions, the Supreme Court decided by a majority (Lord Wilson, Lord Neuberger and Lord Hodge) to allow the appeal and to remit the case back to the Court of Appeal to re-determine the applications by reference to the correct criteria. Lord Clarke and Lord Carnwath, dissenting, agreed as to the criteria to be applied but expressed the view that, on the evidence before the Court of Appeal, the appellant had failed to prove that the condition would in fact stifle the appeal. On re-hearing the applications remitted to him, Patten LJ again refused the appellant’s application and granted the respondent’s application (Onur Air Tasimacilik AS v Goldtrail Travel Ltd [2017] EWCA Civ 1830).
In Gama Aviation (UK) Ltd v Taleveras Petroleum Trading DMCC [2019] EWCA Civ 119, the Court of Appeal, applying Goldtrail, stated that courts had to be cautious about making conditional orders requiring security for all or most of the sum claimed as a condition of being allowed to defend. They should identify the purpose of imposing the condition and be satisfied that it represented a proportionate and effective means of achieving that purpose. They should also give defendants a reasonable opportunity to adduce evidence of their means. Even though the CPR expressly contemplated the possibility of payment conditions being imposed, Anglo Eastern Trust Ltd v Kermanshahchi (No.2) [2002] EWCA Civ 198, established that it was not incumbent on defendants to adduce evidence of resources where there had been no prior notice that the claimant was seek- ing a conditional order. Although Gama Aviation concerned the imposition of a condition in the context of a summary judgment application, the same principles apply whenever a court is consider- ing making any order including a condition to pay money into court.
Goldtrail was followed in Harbour Castle Ltd v David Wilson Homes Ltd [2019] EWCA Civ 505, noted in para.3.4.8.
In Athena Capital Fund SICAV-FIS SCA v Crownmark Ltd [2020] EWHC 2945 (Comm), in proceed- ings in the Commercial Court involving a claim and counterclaim, the defendant subsequently entered into a creditors’ voluntary liquidation. The Commercial Court granted a stay of proceed- ings for a period after which there would be a CMC unless the proceedings had by then settled. At that CMC no appearance was made on behalf of the defendant and an order for disclosure was made against it which it did not comply with. Subsequently a further order was made against the defendant in the unless form. A few days before the deadline for disclosure expired the defendant applied for a variation, extending the deadline, on the basis that one of the defendant’s creditors had now volunteered to fund the defendant’s defence and counterclaim. Jacobs J, applying the principles explained in Goldtrail (see above), drew a distinction between the defendant and its fund- ing creditor; the defendant company itself was impecunious and had previously been unable to fund its defence and counterclaim. The liquidator could not be blamed for the failure of this credi- tor to offer funding at the time of the CMC. The creditor’s late decision to offer funding amounted to a material change of circumstances since the Unless order had been made. The circumstances of this case (including the early stage at which disclosure had been ordered, with no timetable yet in place for steps to trial) were such as to outweigh the powerful public interest in ensuring compli- ance with an Unless order. (The order made in this case was later reversed on different grounds:
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subsequent events proved that the creditor had had no real intention to fund the defendant and, therefore, there had been no material change of circumstances and the order for disclosure was never complied with; [2021] EWCA Civ 414.)
In Price v Price [2003] EWCA Civ 888; [2003] 3 All E.R. 911 the Court of Appeal encouraged the wider use by the courts of the power to impose conditions upon extensions of time: C had delayed serving particulars of claim for over 15 months and had failed to supply information to D despite repeated requests for it; the Court of Appeal granted an extension allowing C a further 28 days to serve particulars of claim on condition that no claim was made for compensation other than what might be substantiated by the medical evidence which was available when the claim form was issued. See also Southern & District Finance Plc v Turner [2003] EWCA Civ 1574, where the Court of Appeal made observations on the usefulness of the court’s power under r.3.1(3) to impose condi- tions on orders made under r.3.1(2)(a); and Jones v T Mobile (UK) Ltd [2003] EWCA Civ 1162; [2003] 3 E.G.L.R. 55; [2004] C.P. Rep. 10 (condition that appellant’s costs of hearing should be ir- recoverable imposed when granting an extension of time).
The scope and effect of r.3.1(3) and the authorities thereon were examined and explained by the Court of Appeal in Huscroft v P & O Ferries Ltd (Practice Note) [2010] EWCA Civ 1483; [2011] 1 W.L.R. 939, CA. The court noted that the rule is drafted in quite general terms and declined to lay down any hard and fast rules about the circumstances or manner in which the power contained in it should be exercised. The fact that it allows the court to make an order subject to conditions shows that the rule is concerned with the basis on which the proceedings will be conducted in the future, and that remains the case even when the condition is imposed in order to make good the consequences of some kind of previous misconduct. The court said that, before exercising the power, the court should identify the purpose of imposing a condition and satisfy itself that the condition it has in mind represents a proportionate and effective means of achieving that purpose, having regard to the order to which it is to be attached. The rule does not give the court a general power to impose conditions on one or other party whenever it happens to be making an order, and the power should not be exercised only if there is a history of repeated failures to comply with orders of the court or the party in question is not conducting the litigation in good faith. The specific power given to the court under r.3.1(5) to order a party to pay a sum of money into court, in the circumstances provided for therein, is quite distinct from the general power granted by r.3.1(3) to impose conditions.
Huscroft v P&O Ferries (above) was applied in Shagang Shipping Co Ltd v HNA Group Co Ltd [2014] EWHC 2241 (Comm). In respect of an application to amend a defence in a charterparty dispute, in which the charterer sought to add a new defence relating to newly discovered evidence of bribery, the claimant failed in its contention that the defendants should only be given permission to amend if, as a condition of doing so, they paid into court the claimant’s estimated costs in dealing with the bribery defence. The claimant’s contention that the evidence had been obtained by untoward means was not supported by evidence, and the aim of securing its costs was not a proper purpose when considering applications under CPR r.3.1(3). The defence was arguable and the defendants had acted as quickly as they possibly could and entirely properly in only putting forward any allega- tions of bribery when they were in a position properly to do so.
In Deutsche Bank AG v Unitech Global Ltd [2016] EWCA Civ 119; [2016] 1 W.L.R. 3598, the Court of Appeal (1) noted that the Huscroft v P&O Ferries case (above) provides authority for the proposi- tion that, where there is a specific rule in the CPR which deals with a particular type of applica- tion, r.3.1(3) cannot be relied upon as a means of circumventing the requirements of that specific rule, (2) explained that, where on an application for summary judgment under Pt 24 the court makes a conditional order requiring a party to pay money into court and providing that “that party’s claim will be dismissed or his statement of case struck out if he does not comply”, the court’s power to make such an order is not derived from any specific rule in Pt 24 but is derived from r.3.1(3), and (3) held, accordingly, that the court below erred in considering the claimant’s ap- plication for a conditional order, first in reliance on Pt 24 and then, separately, under r.3.1(3). (See further para.24.6.6.) Huscroft was cited with approval in IPCO (Nigeria) Ltd v Nigerian National Petroleum Corp [2017] UKSC 16; [2017] 1 W.L.R 970, at [44].
The power of the court under r.3.1(3)(a) to include in an order a condition to the effect that, if the condition were subsequently satisfied, the order would automatically be discharged, was al- luded to in Knowsley Housing Trust v White [2008] UKHL 70; [2009] 1 A.C. 636, HL at [100] and [107] per Lord Neuberger (proleptic order for discharge as condition of suspended possession order).
Award of interest on debt or damages as condition
The court’s discretion as to the award of interest on debts or damages granted by the Senior Courts Act 1981 s.35A and the County Courts Act 1984 s.69 (see Vol.2 paras 9A-122 and 9A-554), extends to (1) reducing the period for which interest is payable on an award, or (2) altering the rate at which interest is calculated, or both, in the light of the manner in which a party has conducted the litigation. Since the coming into effect of the CPR, the court’s powers in this respect have been emphasised for the purpose of demonstrating the range of conditions which the court may attach to a procedural order (r.3.1(3)) and, especially, conditions in the form of procedural sanctions (r.3.8) imposed for the purpose of dealing with delay, whether caused by a claimant or a defendant (see Biguzzi v Rank Leisure Plc [1999] 1 W.L.R. 1926; The Times, 15 November 2000, CA). Note also
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r.36.17 (interest consequences for defendant where claimant does better than they proposed in their Part 36 offer). As to awards of interest generally, see Notes on Awards of Interest at para.16AI.1.
Unless orders
An unless order is a conditional order which causes the dismissal of a claim or counterclaim or the debarring of a defence unless the order is complied with (and see further, para.3.9.4). It is considered to be one of the most powerful weapons in the court’s case management armoury and should not be deployed unless its consequences can be justified. As to the drafting of unless orders, PD 40B para.8.2 provides two examples: in the first, a particular date and time for compliance is specified, whereas in the second, the period is defined by reference to the date of service of the order. However, the court is not required to use only these alternatives. In Poule Securities Ltd v Howe [2021] EWCA Civ 1373, the Court of Appeal refused to construe an order specifying a period running “from the date of this order” as if it meant “from the date of service of this order”.
In Al-Subaihi v Al-Sanea [2020] EWHC 3206 (Comm) the second claimant (“C2”) failed to comply fully with an order for disclosure and the defendants sought a further order in the unless form. Cockerill J ruled that C2’s breach had been unrepentant and uncontrite and, had the circumstances remained unchanged, she would have had little or no hesitation in imposing an unless order. However, the circumstances had altered in two respects. C2 now accepted that he had been at fault and had expressed his willingness to provide the remaining disclosure. Also, C2 had recently been taken into detention in Saudi Arabia which plainly gave rise to the possibility of difficulties even though C2 believed that he could provide the disclosure sufficiently speedily. An order in the un- less form was therefore disproportionate and inappropriate. However, if the non-compliance continued, an unless order would be made on a renewed application unless C2 could then establish an extraordinarily good excuse.
In Ogiehor v Belinfantie [2018] EWCA Civ 2423; [2018] 6 Costs L.R. 1329 the claimant, acting in person, caused the adjournment of a two-day trial, by revealing to the court the terms of a without prejudice offer made by the defendant, despite the several warnings not to do so which had been given to him by the trial judge and other persons present. Directions were given that the trial should be re-commenced before a different judge and the claimant should pay the defendant’s costs thrown away by the adjournment and should make an interim payment in respect of those costs in the sum of £10,000. It was further ordered that unless that sum was paid within a period of four months the claim would be struck out. On the first appeal the time for payment was increased to a period of six months. The claimant’s second appeal to the Court of Appeal was dismissed. The order made on the first appeal had been entirely proper. There had been significant previous failures by the claimant, some of which he could have been expected to remedy, even though unrepresented. In deciding to require the claimant to make the interim payment before permitting him to continue to pursue his claim, the lower courts had correctly taken in account certain severe problems in the merits of the claim, the very large amount of costs already incurred by the defence and the claimant’s ability to pay the sum ordered (including the possibility that he might raise the money from others) and had also allowed him a long time for the deposit of the money.
Stays or unless orders for non-compliance with interim orders for costs
Where a party refuses to comply with an order to pay costs which they have the means to pay the court may make an order debarring them from taking any further part in the proceedings unless, by a date stated in the order, they comply with the previous order (Days Healthcare UK Ltd v Pihsiang Machinery Manufacturing Co Ltd [2006] EWHC 1444 (QB); [2006] 4 All E.R. 233, QB. An intentional failure to comply with an order made in proceedings the litigant seeks to participate in may also amount to a contempt of court (Days Healthcare UK Ltd, above).
In Michael Wilson & Partners Ltd v Sinclair [2017] EWHC 2424 (Comm); [2017] 5 Costs L.R. 877 Sir Richard Field, sitting as a deputy judge of the High Court, considered earlier decisions on the making of unless orders as a means of enforcing interim costs orders, and stated the following principles:
“(1) The imposition of a sanction for non-payment of a costs order involves the exercise of a discretion pursuant to the court’s inherent jurisdiction.
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(2) The court should keep carefully in mind the policy behind the imposition of costs orders made payable within a specified period of time before the end of the litigation, namely, that they serve to discourage irresponsible interlocutory applications or resist- ance to successful interlocutory applications.
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(3) Consideration must be given to all the relevant circumstances including: (a) the potential applicability of Art.6 of ECHR; (b) the availability of alternative means of enforcing the costs order through the different mechanisms of execution; (c) whether the court mak- ing the costs order did so notwithstanding a submission that it was inappropriate to make a costs order payable before the conclusion of the proceedings in question; and where no such submission was made whether it ought to have been made or there is no good reason for it not having been made.
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(4) A submission by the party in default that he lacks the means to pay and that therefore a debarring order would be a denial of justice and/or in breach of Art.6 of ECHR should be supported by detailed, cogent and proper evidence which gives full and frank disclosure of the witness’s financial position including his or her prospects of raising the necessary funds where his or her cash resources are insufficient to meet the liability.
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(5) Where the defaulting party appears to have no or markedly insufficient assets in the jurisdiction and has not adduced proper and sufficient evidence of impecuniosity, the court ought generally to require payment of the costs order as the price for being al- lowed to continue to contest the proceedings unless there are strong reasons for not so ordering.
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(6) If the court decides that a debarring order should be made, the order ought to be an unless order except where there are strong reasons for imposing an immediate order.”
These principles are analogous at least in some respects to applications based on non-compliance with orders to provide security for costs and other mandatory orders requiring the payment of money (Aramco Trading Fujairah FZE v Gulf Petrochem FZC [2021] EWHC 2650 (Comm) at [18]). And see also Siddiqi v Aidiniantz [2020] EWHC 699 (QB) and Axnoller Events Ltd v Brake [2021] EWHC 2308 (Ch).
Rule 3.1(4): Courts to take into account whether or not a party has complied with the Practice Direction (Pre-Action Conduct) and any relevant pre-action protocol
Rule 3.1(3) together with r.3.5(5) (see below) put beyond doubt the court’s power to make orders penalising any party who fails to comply with the PD on Pre-action Conduct (see paras C1-001 to C1-010 below) or any relevant pre-action protocol (see the list of protocols set out at para.C1-010). Guidance as to how the court will deal with any such non-compliance is given in paras 13 to 16 of the PD on Pre-action Conduct (see para.C1-008).
Rule 3.1(5), (6) and (6A): Ordering security
A party has, without good reason, failed to comply with a rule, practice direction or a relevant pre-action protocol may be ordered to pay a sum of money into court (r.3.1(5)); see Olatawura v Abiloye [2002] EWCA Civ 998; [2003] 1 W.L.R. 275; [2002] 4 All E.R. 903, CA. The sum of money will be security for any sum payable by that party to any other party in the proceedings (r.3.1(6A)). An order such as this can be made against a claimant or a defendant. In exercising this power the court must have regard to the amount in dispute and the costs incurred and to be incurred (r.3.1(6)).
In the case of claimants, an order under r.3.1(5) significantly broadens the court’s powers to order security for costs (as to which, see generally CPR Pt 25 Section II). As to defendants and defendants to counterclaims they may be ordered to give security for costs and also for any money remedy claimed against them. Although r.3.1(5) does not give the court power to deal with non- compliance with court orders, other rules can be used in such cases, in particular r.3.1(3) (as to which see further Huscroft v P & O Ferries [2010] EWCA Civ 1483; [2011] 1 W.L.R. 939, noted in para.3.1.14, above).
The circumstances in which it is appropriate to order a party to pay a sum of money into court are limited. In Olatawura (above) Simon Brown LJ suggested that a party only becomes exposed to an adverse order for security under r.3.1(5) once they can be seen either to be regularly flouting proper court procedures or otherwise to be demonstrating a want of good faith—good faith for this purpose consisting of a will to litigate a genuine claim or defence as economically and expedi- tiously as reasonably possible in accordance with the overriding objective. See also: CIBC v Mellon Trust Co v Mora Hotel [2002] EWCA Civ 1688; [2003] 1 All E.R. 564, CA; and Ali v Hudson [2003] EWCA Civ 1793; [2004] C.P. Rep. 15, CA.
In Olatawura the point was also made that before ordering security for costs in any case (i.e. whether or not under Pt 25) the court should be alert to the risk that by making such an order it may be denying the party concerned the right to access to the court. It was said that whether or not the person concerned has (or can raise) the money will always be a prime consideration given the terms of Article 6; see [22] of the judgment.
In Ali v Hudson [2003] EWCA Civ 1793; [2004] C.P. Rep. 15, the Court of Appeal set aside an order made which, because of the appellant’s delay, stayed an appeal pending the provision of security for the costs of the appeal. In his judgment, with which the other two lords justices agreed, Clark LJ quoted passages of the judgment of Simon Brown LJ in Olawatura (see above) and stated:
“Those principles show that the power to order security for costs in a case of this kind should be exercised with great caution. The correct general approach may be summarised as follows: (i) it would only be in an exceptional case (if ever) that a court would order security for costs if the order would stifle a claim or an appeal; (ii) in any event, (a) an order should not ordinarily be made unless the party concerned can be shown to be regularly flouting proper court procedures or otherwise to be demonstrating a want of good faith; good faith being understood to consist (as Simon Brown LJ put it) of a will to litigate a genuine claim or defence (or appeal) as economically and expeditiously as reasonably possible in accordance with the overriding objective; and (b) an order will not be appropriate in every case where a party has a weak case. The weakness of the party’s case will ordinarily be relevant only where he has no real prospect of succeeding.”
See also, Ford v Labrador [2003] UKPC 41; [2003] 1 W.L.R. 2082 and para.3.4.18. In this case an order requiring the appellant to pay costs before proceeding further was set aside as the order impeded the appellant’s right of access to the court. As to the principles applicable on the issue whether an order for security will stifle a party’s continued participation in proceedings, see also
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Goldtrail Travel Ltd v Aydin [2017] UKSC 57; [2017] 1 W.L.R. 3014, noted in para.3.1.14, above). Rule 3.1(6A) provides that money paid into court under rr.3.1(3) or 3.1(5) “shall be security for any sum payable by [the party who made the payment into court] to any other party in the proceedings”. It is wrong to assume that the party who made the payment into court will be automatically entitled to an order for payment out once the reason which led to the payment in
ceases to apply, see; CMA CMG Marseille v Petro Broker International [2011] EWCA Civ 461.
In Lazari v London & Newcastle (Camden) Ltd [2013] EWHC 97 (TCC); [2013] B.L.R. 313; [2013]
CP Rep. 26, Olatawura and Huscroft were applied and the defendant building developer, which had
belatedly admitted liability for defects, was ordered to pay £30,000 into court under r.3.1(5) and
r.25.7 (Interim Payments) given that it had failed to comply with the rules of court and the overrid-
ing objective. Akenhead J, stated that in the instant case r.3.1(5) and r.25.7 informed each other
and made the point that an order for payment into court did not have to be classified as security
for costs. An underlying consideration was the need for the court to exercise a degree of control
over the future conduct of the litigation. The expectation of the judge that the payment into court
would encourage the parties to some form of ADR is to be noted.
In Alba Exotic Fruit SH PK v MSC Mediteranean Shipping Co SA [2019] EWHC 1779 (Comm)
(Judge Rawlings) on the facts, the judge declined to strike out the claim for the claimant’s breach of PD 59 in having failed to apply to fix a case management conference four years and seven months after filing its claim form. Instead, it was held that an order under r.3.1(5) that the claimant provide security for the defendant’s costs in an amount representing 79% of the defendant’s incurred and estimated costs. While 79% was more than the court might award on an application made under r.25.12, it was a proportionate sanction.
Rule 3.1(7): Court’s power to vary or revoke an order
Rule 3.1(7) states that “a power of the court under these Rules to make an order includes a power to vary or revoke the order”. It is an omnibus provision. It may be that that is the sole purpose of r.3.1(7) and that it was introduced in an effort to avoid repetition elsewhere. However, it should be noted that, in terms, r.3.1(7) is not restricted to procedural orders. It should also be noted that the rule refers to “order” and not to “judgment or order”, which is the formulation used in other provisions permitting revocation and variation (see further below). In certain contexts, the distinction between “judgment” and “order” can be important (see para.40.1.1).
In Lloyds Investment (Scandinavia) Ltd v Ager-Hanssen [2003] EWHC 1740 (Ch), Patten J, noted that r.3.1(7) is not confined to procedural orders and that there was no real guidance to be found within the rule or elsewhere as to the possible limits of the jurisdiction. Subsequent cases have defined the limits of the operation of r.3.1(7). As will be seen below, a distinction has to be drawn between interim and final orders.
Varying or revoking interim orders
The term “interim orders” is used here in contradistinction to the term “final orders”. Interim orders do not finally decide anything as of right between the parties: they include case manage- ment decisions which govern the procedure by which those rights will be determined (Prestney v Colchester Corp (1883) 24 Ch. D. 376, CA at 384, per Cotton LJ) and also orders providing parties with some interim remedies or protections pending that determination such as orders granting interim injunctions, interim payments and security for costs (as to which, see generally Pt 25). Final orders determine between the parties the issues which are the subject matter of the litigation and which give rise to a cause of action estoppel between those parties.
Even in respect of matters not giving rise to an estoppel, a party cannot fight over again a battle which has already been fought unless there are good grounds; see Chanel Ltd v FW Woolworth & Co Ltd [1981] 1 W.L.R. 485; [1981] 1 All E.R. 745. In Woodhouse v Consignia Plc [2002] EWCA Civ 275; [2002] 1 W.L.R. 2558; [2002] 2 All E.R. 737, it was said that there is a public interest in discouraging a party who makes an unsuccessful interlocutory application from making a subsequent application for the same relief, based on material which was not, but could have been, deployed in support of the first application.
In the leading case of Tibbles v SIG Plc [2012] EWCA Civ 518; [2012] 1 W.L.R. 2591, the Court of Appeal reviewed the authorities (which are not rehearsed here) and stated that although the discretion under r.3.1(7) was apparently broad and unfettered, considerations of finality, and the need to avoid undermining the concept of appeal, pushed towards “a principled curtailment” of an otherwise apparently open discretion. Rix LJ, giving the leading judgment, said (at [39]) that the cases all warn against an attempt at an exhaustive definition of the circumstances in which a principled exercise of the discretion may arise. Subject to that, however, the jurisprudence had laid down firm guidance as to the primary circumstances in which the discretion may, as a matter of principle, be appropriately exercised, namely normally only (a) where there has been a material change of circumstances since the order was made, or (b) where the facts on which the original decision was made were (innocently or otherwise) misstated. There was room for debate in any particular case as to whether and to what extent misstatement may include omission as well as posi- tive misstatement, or concern argument as distinct from facts. This was said to be a matter of discretion for the judge in each case. Questions might arise as to whether the misstatement (or omission) is conscious or unconscious; and whether the facts (or arguments) were known or
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unknowable. These too were factors going to discretion but where the facts or arguments are known or ought to have been known as at the time of the original order, it is unlikely that the order can be revisited, and that must be still more strongly the case where the decision not to men- tion them is conscious or deliberate. Rix LJ concluded that it ought normally to take something out of the ordinary to lead to variation or revocation of an order, especially in the absence of a change of circumstances in an interlocutory situation.
Rix LJ also stated that there is room within CPR r.3.1(7) for a prompt recourse back to a court to deal with a matter which ought to have been dealt with in an order but which in genuine error was overlooked (by parties and the court) and which the purposes behind the overriding objective, above all the interests of justice and the efficient management of litigation, would favour giving proper consideration to on the materials already before the court. This would not be a second consideration of something which had already been considered once (as would typically arise in a change of circumstances situation), but would be giving consideration to something for the first time. On that basis, the power within the rule would not be invoked in order to give a party a second bite of the cherry, or to avoid the need for an appeal, but to deal with something which, once the question is raised, is more or less obvious, on the materials already before the court. Rix LJ emphasised the word “prompt”. The court would be unlikely to be prepared to assist an ap- plicant once much time had gone by. With the passing of time is likely to come prejudice for a respondent who is entitled to go forward in reliance on the order that the court has made.
In Thevarajah v Riordan [2015] UKSC 78; [2016] 1 W.L.R. 76, SC, the defendant’s first applica- tion for relief from sanctions had been refused. The Supreme Court held that r.3.1(7), and the Tib- bles criteria, applied to a second application for relief from sanctions so that the defendant had to show that there had been a material change in circumstances since the first application. The defendant had failed to do so. A party’s compliance with an unless order after a debarring order has been made cannot amount to a material change of circumstances unless accompanied by other facts.
The court may, in its discretion, refuse an application to vary an order on the basis of misstate- ment where the misstatement in question was made by the applicant itself and could not have been reasonably made. In Catalyst Management Services v Libya Africa Investment Portfolio [2018] EWCA Civ 1676; [2018] 4 Costs L.R. 807 Andrew Baker J refused an application for variation upon this (and other grounds) and his decision was upheld by the Court of Appeal.
As to what may amount to a material change of circumstance and its effect upon an application to vary an Unless order, see Athena Capital Fund SICAV-FIS v Crownmark Ltd [2020] EWHC 2945 (Comm) (Jacobs J) noted in para.3.1.14.
It may, in principle, be an abuse of process for a party to seek to reopen an interim order on the basis of a material change of circumstances relying upon a development that was wholly within that party’s control. In deciding whether it is an abuse the court should take a broad, merits-based ap- proach; it must take into account the public and private interests involved and all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misus- ing or abusing the process of the court (JSC VTB Bank v Skurikhin [2020] EWCA Civ 1337; [2021] 1 W.L.R. 434 at [47]–[56]; Oyston v Rubin [2021] EWHC 448 (Ch), variation allowed; Walton Family Estates Ltd v GJD Services Ltd [2021] EWHC 464 (Comm), variation refused; and see further, para.3.4.17).
Varying or revoking final orders
The term “final order” is used in this paragraph to describe an order which determines between the parties the issues which are the subject matter of their litigation and which give rise to a cause of action estoppel between them. Whether an order is final or not depends upon the nature of the order itself, not upon the nature of the hearing (if any) at which it was made (Sangha v Amicus Finance Plc [2020] EWHC 1074 (Ch) at [26]). The interests of justice, and of litigants generally, require that a final order remains final unless there are proper grounds for an appeal, or unless there are exceptional grounds for varying or revoking it without an appeal. As to the latter, the CPR expressly provides for the variation or revocation of some final orders, for example, Pt 13 (“Setting aside or varying default judgment”) and r.39.3 (“Failure to attend the trial”); see further para.3.1.17.5.
In Roult v North West Strategic Health Authority [2010] 1 W.L.R. 487; [2009] EWCA Civ 444; [2009] P.I.Q.R. 18, the Court of Appeal gave the following guidance as to the court’s power to vary or revoke an order under r.3.1(7). The grounds for invoking the power generally fall into one or other of two categories: (i) the original order was made on the basis of erroneous information (whether accidentally or deliberately given); and (ii) subsequent events, unforeseen at the time the order was made, have destroyed the basis on which it was made. In the context of case management decisions, further developments as to information or events may well justify variations in any orders previously given. However, proof of facts establishing either category may not justify any variation or revocation of a final order. This is because r.3.1(7) does not give judges, in effect, power to hear an appeal from themselves in respect of a final order relating to the whole or part of a claim. In Roult on the first day of the trial of a clinical negligence claim, a settlement was made which the judge approved on behalf of the claimant (C), a protected party. The settlement had been reached on the basis that C’s best interests lay in him being cared for in a group home
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provided by the local authority and therefore a schedule setting out costs claimed in respect of independent care in his own home had been assessed at nil. The settlement also included, among certain heads of claim yet to be quantified, a claim for “costs of future care”. C had subsequently entered a group home but had been removed from it by his parents after a short time. They now considered that, in fact, C’s best interests lay in him being cared for in his own home. C’s applica- tion to vary the approved settlement was dismissed by Christopher Clarke J whose decision was upheld by the Court of Appeal.
In Kojima v HSBC Bank Plc [2011] EWHC 611 (Ch); [2011] 3 All E.R. 359, the defendant to a debt claim admitted liability for most of the claim but disputed the balance; the matter proceeded to a hearing at which judgment was entered for the admitted sum and provision was made for enforcement by charging order. The defendant subsequently applied for permission to withdraw his admission and for the revocation of the judgment made upon it. Briggs J upheld the order of the lower court which dismissed the application for revocation: a judgment on admissions is a final judgment (and, also, a judgment on the merits); in such cases, having regard to the decision in Roult, it will not normally be appropriate for a court to revoke a final order because of subsequent changes of circumstances; the considerations which might make it appropriate to revoke an interim order on that basis will generally be displaced by the much larger public interest in the finality of litigation (subject to any right of appeal there may be): on the facts of this case, the appellant had failed to make out a case for revocation on the grounds that the judge had been misled. See Tibbles v SIG Plc [2012] EWCA Civ 518; [2012] 1 W.L.R. 2591 (noted in para.3.1.17.1, and see para.40.9.3).
In Salekipour v Parmar [2017] EWCA Civ 2141; [2018] Q.B. 833; [2018] 2 W.L.R 1090, the Court of Appeal considered whether r.3.1(7) can be used in support of applications to set aside a judgment on grounds that had been obtained by fraud. Sir Terence Etherton MR gave a reasoned judgment with which the other members of the court agreed. After referring to Roult and other cases, the Master of the Rolls ruled that the precise scope of r.3.1(7) was unclear but, for the purposes of this case, it was neither necessary nor appropriate to provide further clarity: in High Court cases the court has an inherent jurisdiction to rescind a final order obtained by means of fraud; in County Court cases this jurisdiction is statutory (the County Courts Act 1984 s.23(g) and see para.3.1.17.6). In BCS Corporate Acceptances Ltd v Terry [2018] EWCA Civ 2422, another Court of Appeal case concerning the use of r.3.1(7) in support of an application to set aside a judgment obtained by fraud, Roult and other cases were again reviewed. Hamblen LJ, giving the judgment of the court, referred to the considerations applicable to the varying or revoking of an interim order (erroneous information and subsequent events) and stated (at [75]):
“General considerations such as these will not, however, justify varying or revoking a final order. The circumstances in which that will be done are likely to be very rare given the importance of finality.”
In BCS it was held that no proper or sufficient grounds had been identified for taking the wholly exceptional course of setting aside the court’s final judgment under r.3.1(7) ([78]). There was also a further hurdle facing an application under r.3.1(7): the judgment sought to be revoked in BCS was a default judgment. The proper procedure under the CPR for challenging a default judgment is the specific procedure set out in r.13.3, a rule which forms part of a separate self-contained regime to which a general power such as r.3.1(7) does not apply.
There has not as yet been any definitive determination as to whether r.3.1(7) does or does not give the court jurisdiction to vary or revoke a final order. However, most of the authorities state that the court does have such jurisdiction (whether from r.3.1(7) or from elsewhere) but that jurisdiction is so constrained as to render it exercisable only in exceptional circumstances. Current case law identifies three sets of circumstances which may be exceptional enough to justify the vari- ation or revocation of a final order:
D cases in which the order was obtained by fraud (Salekipour, above and BCS, above);
D orders made in the absence of the party now seeking to set it aside where, on applying
r.39.3 (Failure to attend the trial), or, in non-trial cases, on applying that rule by analogy,
the applicant can satisfy its three requirements (prompt action, good reason for non-
attendance and reasonable prospect of success at trial): see Forcelux Ltd v Binnie [2009]
EWCA Civ 854; [2010] H.L.R. 20, Hackney LBC v Findlay [2011] EWCA Civ 8; [2011]
H.L.R. 15, and Salix Homes v Mantato [2019] EWCA Civ 445; [2019] 1 W.L.R. 3069; and D final orders on admissions obtained pursuant to Pt 14 on request, not on application (i.e. orders issued by an administrative act, without any hearing before a judge) and where the applicant for setting aside is the party in whose favour the orders were made (Madison CF UK v Various [2018] EWHC 2786 (Ch) Hildyard J; and see also Re Cabot Financial (UK) Ltd
[2021] EWHC 789 (Ch), Mann J).
In BCS, above, Hamblen LJ gave a further example, drawn from family proceedings: the use of
powers akin to r.3.1(7) to vary or revoke final orders concerning financial arrangements in relation
to which there is a duty of full and frank disclosure in cases where the court retains jurisdiction
(see [75] citing Sharland v Sharland [2015] UKSC 60; [2016] A.C. 871, and Gohil v Gohil (No 2)
[2015] UKSC 61; [2016] A.C. 849).
For a recent illustration and application of the current law concerning the revocation of final orders see Sangha v Amicus Finance Plc [2020] EWHC 1074 (Ch).
In Koza Ltd v Koza Altin Isletmeleri SA [2020] EWCA Civ 1018 the Court of Appeal (Moylan LJ 84
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dissenting) described the principles governing the varying of interim orders as aspects of the rule in Henderson (as to which see para.3.4.5) and the rule in Hunter (as to which see para.3.4.9).
Varying or revoking orders subject to liberty to apply
In the context of interim orders, judges often include “liberty to apply” in the order. As was recognised in Tibbles (above), this is an express recognition of the possible need to revisit an order in an ongoing situation. In such cases the court making the order does not lose seisin of the matter: the inclusion of a liberty to apply indicates that it is foreseen that further applications are likely in the course of implementing the decision. However, the liberty does not constitute a “broad licence to avoid appeals”. In order to secure the variation or revocation of an order the requirements of Tibbles must still be satisfied. It is difficult to see how “a liberty to apply” provision in an order would justify a subsequent variation in the absence of a change of circumstances or the misstate- ment of facts. The absence of “liberty to apply” certainly does not preclude an application.
Rule 3.1(7): Other limitations on rule
In DEG-Deutsche Investitions- und Entwicklungsgesellschaft mbH v Koshy [2004] EWHC 2896 (Ch); [2005] 1 W.L.R. 2434 (Hart J), it was held that the power of the court under r.3.1(7) is confined to the variation or revocation of an order made by the court in exercise of “a power of the court under these Rules”, not any order of a type which might have been made under these Rules; i.e. r.3.1(7) did not permit the variation of orders made under the old RSC. Where the order was made by the court in the exercise of a power derived from elsewhere, then any power to alter that order must also be found elsewhere.
Rule 41.8 deals with periodical payment orders made in exercise of the court’s jurisdiction to award damages for future pecuniary loss in personal injury cases. This jurisdiction is derived from the Damages Act 1996 s.2. Under that statutory scheme, when assessing damages and making an order for periodical payments, the court may in addition provide in that order that it should be a “variable order”; that is to say, that it should be a periodical payments order which, although disposing of the issue of damages, may be altered by the court subsequently in restricted circumstances. The power to make a periodical payments order, whether of the variable variety or not, is not a power to make an order “under these Rules” within the meaning of r.3.1(7). The court’s jurisdiction to vary an order in these circumstances is regulated by the 1996 Act and delegated legislation made thereunder (see further para.41.8.7).
The power to vary or revoke an order given by r.3.1(7) is only exercisable in relation to an order that the court has previously made, and not to an order that is deemed to have been made by operation of the rules (Lahey v Pirelli Tyres Ltd [2007] EWCA Civ 91; [2007] 1 W.L.R. 998, CA, ap- proving Walker Residential Ltd v Davis [2005] EWHC 3483 (Ch) (Park J)).
The circumstances in which the court may make orders (procedural or otherwise) are legion. The questions whether, as a matter of law, an order may be varied or revoked, and whether it should be varied or revoked, must be determined in the contexts in which they arise. Where a court exercises its power under r.31.5(2) to limit an order for standard disclosure of documents made in unlimited terms it is in effect varying the order, and there is no real difference between the circumstances in which the court may exercise that power and those in which an order may be varied under r.3.1(7) (Serious Organised Crime Agency v Namli [2011] EWCA Civ 1411; [2012] C.P. Rep. 10; [2012] Lloyd’s Rep. F.C. 139).
Where the order in question is a search order made by the High Court, the rule is that, subject to an exception, a County Court may not vary or revoke the order (County Court Remedies Regulations 1991 (SI 1991/1222) reg.3(1), see Vol.2, para.9B-78). The exception is that a County Court may vary such an order (but may not revoke it) where all the parties are agreed on the terms of the variation (above, reg.3(4)(b)).
Where a group litigation order (GLO) is in place, a party to a claim entered on the group register after a judgment or order which is binding on them was given or made may not apply for the judgment or order to be set aside, varied or stayed (and may not appeal), but may apply for an order that the judgment or order is not binding on them (r.19.23(3)).
Other CPR concerning variation or revocation of orders
3.1.17.3
3.1.17.4
Some other provisions in the CPR, in addition to r.3.1(7), deal with the varying and revoking of orders, including final orders. Rule 3.1(7) must be read in conjunction with them:
3.1.17.5
D r.23.10(1) concerning orders made without notice;
D r.23.11(2) concerning interim orders made at a hearing which a party failed to attend the
hearing;
D rr.28.4 and 29.5 concerning orders (and rules) setting a case management timetable;
D r.3.3(4) and (5) concerning orders made by the court of its own initiative, without hearing
the parties or without giving them an opportunity to make representations (and see also
PD 23A (Applications) para.11.2);
D r.3.6 concerning the setting aside of judgements entered without a hearing under r.3.5;
D PD 24 para.8 appears to supply a wide power to set aside a summary judgment given in the
absence of a party, as to which see further para.24.6.9;
D r.39.3(3) concerning orders made at a trial which a party failed to attend;
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3.1.18
property let on an assured shorthold tenancy;
D r.40.9A concerning the variation of a County Court judgment or order for the payment of
money;
D r.77.4 concerning the variation of serious crime prevention orders made by the Crown
Court;
D r.73.10B concerning the discharge or variation of a final charging order in certain
circumstances; and
D r.52.18 concerning the setting aside or variation of orders granting permission to appeal
(and see also PD 52B para.7.3).
Inherent jurisdiction of the court to vary orders
The court has an inherent jurisdiction to vary its own orders to make the meaning and intention of the court clear (PD 40B (Judgments and Orders), para.4.5, see para.40BPD.4 below).
The well recognised routes for challenging a final decision on the basis that it was obtained by means of fraud are to lodge an appeal or to bring a new action for rescission of the earlier judgment. The High Court’s jurisdiction to rescind a final order of the High Court on this basis is inherent. The County Court’s jurisdiction to set aside a final order of the County Court on this basis is statutory (Salekipour v Parmar [2017] EWCA Civ 2141; [2018] 2 W.L.R. 1090, construing s.23(g) of the County Courts Act 1984).
Rule 3.1(8): Court’s power to contact the parties
Rule 3.1(8) (as amended in 2013) makes explicit the court’s power to contact the parties from time to time in order to monitor compliance with any directions made. In fact the courts have always had such a power but, in practice, tended to exercise it only in respect of forthcoming hear- ings where to do so might save time, expense or misunderstandings. In Constantinou v Wilmot-Josife [2010] EWCA Civ 747; [2010] 2 F.L.R. 1449 Thorpe LJ expressed misgivings as to the wisdom of a judge simply telephoning the parties’ representatives if that led to there being no record of the exchange. He felt that it would have been preferable for the judge in that case to have sent an identical e-mail to each side.
When the court does contact the parties under this sub-paragraph they are under a duty to respond promptly (r.3.1(8) (second sentence and cf. r.1.3 (duty of parties to help the court to further the overriding objective)).
Case management—unrepresented parties1
3.1A—(1) This rule applies in any proceedings where at least one party is unrepresented.
(2) When the court is exercising any powers of case management, it must have regard to the fact that at least one party is unrepresented.
(3) Both the parties and the court must, when drafting case management directions in the multi-track and fast track, take as their starting point any relevant standard directions which can be found online at www.justice.gov.uk/ courts/procedure-rules/civil and adapt them as appropriate to the circumstances of the case.
(4) The court must adopt such procedure at any hearing as it considers ap- propriate to further the overriding objective.
3.1A
3.1A.1
Rule 3.1A: Effect of rule
This rule was inserted by the Civil Procedure (Amendment No.4) Rules 2015 (SI 2015/1569) and came into force on 1 October 2015. Its primary purpose is to make explicit that which has long
1 Introduced by the Civil Procedure (Amendment No.4) Rules 2015 (SI 2015/1569).
(5)
At any hearing where the court is taking evidence this may include—
-
(a) ascertaining from an unrepresented party the matters about which the witness may be able to give evidence or on which the witness
ought to be cross-examined; and
-
(b) putting, or causing to be put, to the witness such questions as may
appear to the court to be proper.
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D rr.13.2 and 13.3 concerning the setting aside or varying of default judgments (and see rr.20.3 and 20.11(5) concerning default judgments entered in Pt 20 claims);
D r.40.9 concerning the right of a person “who is not a party but who is directly affected by a judgment or order” to apply to have that judgment or order set aside or varied;
D r.44.10(3) concerning deemed orders for costs made under r.44.10(2);
D r.3.15A concerning the revision and variation of costs budgets;
D r.3.19(7) concerning applications to vary a costs capping order;
D rr.55.18 and 55.19 concerning certain orders made in accelerated possession claims of
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been the practice of most courts, which is to conduct case management conferences in the manner most likely to achieve efficiency and fairness, thereby furthering the overriding objective. It would be wrong for the court to treat all parties as if they all had the same strength of advice and representation. In order to equalise the access to justice each has, the court should vary the level of assistance it gives according to the circumstances of each particular case, including whether a litigant is in person or is represented, and his level of competence and understanding. Achieving the appropriate level of assistance is constrained by the requirement that the court must at all times be, and be seen to be, impartial as between the parties, and that injustice to either side must be avoided (Drysdale v Department of Transport (Maritime and Coastguard Agency) [2014] EWCA Civ 1083; [2014] C.P. Rep. 43; [2014] I.R.L.R. 892; [2015] I.C.R. D2). Some examples of the adjustments from standard practice which are encouraged by this rule are set out below.
Where a claimant is acting in person and the defendant is represented, a Master or District Judge conducting a case management conference will often direct the defendant to prepare and file hearing bundles and may direct that parties to agree trial bundles and exchange skeleton argu- ments at an earlier stage before trial than is usually directed.
Sub-rule (3) largely reproduces the requirement already set out in r.29.1(2) as to the use of standard form directions. However, r.29.1(2) applies only to cases allocated to the multi-track whilst r.3.1A(2) applies to all cases governed by CPR. Departures from the standard forms may cause stress to a litigant in person and therefore should be made only if and to the extent that it is neces- sary to do so.
Sub-rules (4) and (5) indicate the active role the court should take when hearing oral evidence: in respect of a witness called by the litigant in person, asking that litigant to summarise the topics upon which this witness’s evidence is sought and, if necessary, posing or suggesting the lines of questioning to be taken; in respect of a witness called by another party, asking a litigant in person to indicate which parts of that witness’s evidence are challenged and, if necessary, posing or sug- gesting the lines of cross-examination to be taken.
Rule 3.1A does not lower the standard of compliance with rules or court orders which litigants in person are required to achieve. On an application for relief from sanction under r.3.9, the fact that a person is unrepresented is most unlikely to amount to a good reason for breach (see Barton v Wright Hassall LLP [2018] UKSC 12; [2018] 1 W.L.R. 1119 at [18] Lord Sumption JSC, and 3.9.16 below). This being so, it is all the more important that the court should make allowances for litigants in person by setting clear and achievable directions under r.3.1A(2) or (3).
Axnoller Events Ltd v Brake [2021] EWHC 1706 (Ch) concerned two claims, in which the claim- ants in one were the defendants in the other. At a stage when all parties were legally represented, directions had been made requiring them to liaise as to the preparation of a combined trial bundle and requiring one side (“G”) to file a hard copy bundle at court and supply the other side (“B”) with an electronic copy. After those directions had been carried out B became unrepresented and applied for an order varying the directions so as to require G to supply B with a hard copy without payment. HH Judge Paul Matthews (sitting as a Judge of the High Court) dismissed that application: neither the loss of legal representation nor the inconvenience of downloading files in an area with low internet speeds amounted to a sufficient reason to revisit the directions made earlier. Similarly, impecuniosity rendering B unable to afford the costs of a hard copy of the bundle did not, in this case, justify a variation of the directions.
“[27] ... [B] are the claimants in one of the two trials, and cannot complain that they are be- ing brought to court against their will. Some expenditure by each of the parties is unavoidable. Equipping yourself with the necessary papers for the trial process is part of that.”
The appointment of an advocate to the court
A court may properly seek the assistance of an Advocate to the Court when there is a danger of an important and difficult point of law being decided without the court hearing relevant argument (PD 3F para.3). This topic most frequently arises where a case involving an important and difficult point of law has one or more parties acting in person who cannot afford to pay for representation and either cannot arrange pro bono representation, or does not have sufficient time to do so.
The person appointed as advocate to the court (formerly called amicus curiae or friend to the court) represents no-one. Their function is to give to the court such assistance as they are able on the relevant law and its application to the facts of the case. An Advocate to the Court will not normally be instructed to lead evidence, cross-examine witnesses, or investigate the facts. If the court considers it appropriate to seek such assistance it may “request” the Attorney General to ar- range it, setting out the circumstances which have occurred, identifying the point of law upon which assistance is sought and the nature of the assistance required (for example, written advice and/or oral submissions at the hearing).
Practice Direction 3F also covers other cases in which an Advocate to the Court may be ap- pointed, by the Official Solicitor or the Children & Family Court Advisory Service (CAFCASS). It also deals with two other cases of advocates appointed by the Attorney General who are not Advocates to the Court: where a point of law which affects a government department is being argued in a case where the department is not represented; and where the Attorney believes it is necessary to intervene as a party in the Attorney’s capacity as guardian of the public interest. In the first of these two cases, the court may simply invite the Attorney to make arrangements for some representation on behalf of the department if so desired. In the second, the court may grant the Attorney permission to intervene, in person or by an advocate. In each of these two cases the
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3.3
advocate who attends will be representing the government department or the Attorney General, as the case may be.
Court officer’s power to refer to a judge
3.2 Where a step is to be taken by a court officer—
-
(a) the court officer may consult a judge before taking that step;
-
(b) the step may be taken by a judge instead of the court officer.
Rule 3.2: Effect of rule
“Court officer” means a member of the court staff (r.2.3(1)). Many steps taken by court officers concern the filing of documents, the issue of claim forms and the entry of default judgments. This rule enables court officers to refer to a judge any such document, form or request for judgment which appears to be irregular or inappropriate. In respect of that matter the judge may give direc- tions to the court officer as to the step to be taken, or may take the step themself. In either case the judge may also exercise the court’s power to make orders of its own initiative (see r.3.3).
Paragraph 4.4.3 of the King's Bench Guide states that any claim form or particulars of claim which does not comply with the requirements of r.16.2 or r.16.4 or which is garbled or abusive will be referred to a Master and is likely to be struck out (see Vol.2, para.1B-24).
Court’s power to make order of its own initiative
3.3—(1) Except where a rule or some other enactment provides otherwise, the court may exercise its powers on an application or of its own initiative.
(Part 23 sets out the procedure for making an application.)
3.3.1
-
(a) the court’s order must record that fact; and
-
(b) the court must at the same time consider whether it is appropriate
to make a civil restraint order.
Rule 3.3: Effect of rule
The court’s duty of active case management includes narrowing the issues, controlling the timetable and moving the case forward quickly and efficiently (r.1.4(2)(b), (c), (g) and (l)). By giving them power to make orders on their own initiative, r.3.3 enables the judge to manage cases proactively as well as reactively. The judge has power to:
(1) make a provisional order containing a procedure for representations, e.g. requiring representations to be made orally or in writing and fixing deadlines (r.3.3(2)); or
(2)
(3)
Where the court proposes to make an order of its own initiative—
-
(a) it may give any person likely to be affected by the order an op-
portunity to make representations; and
-
(b) where it does so it must specify the time by and the manner in
which the representations must be made.
Where the court proposes—
(a) to make an order of its own initiative; and
(5)
(6)
Where the court has made an order under paragraph (4)—
-
(a) a party affected by the order may apply to have it set aside(GL),
varied or stayed(GL); and
-
(b) the order must contain a statement of the right to make such an
application.
An application under paragraph (5)(a) must be made—
-
(a) within such period as may be specified by the court; or
-
(b) if the court does not specify a period, not more than 7 days after the date on which the order was served on the party making the
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(b) to hold a hearing to decide whether to make the order,
it must give each party likely to be affected by the order at least 3 days’ notice
of the hearing.
(4) The court may make an order of its own initiative, without hearing the parties or giving them an opportunity to make representations.
application.
If the court of its own initiative strikes out a statement of case or
(7)
dismisses an application (including an application for permission to appeal or
for permission to apply for judicial review), and it considers that the claim or
application is totally without merit—
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-
(2) convene a hearing to decide whether to make a specified order (r.3.3(3)); or
-
(3) make an order without hearing the parties or giving them an opportunity to make representations (r.3.3(4)). In this instance the parties may later apply to set aside that order
(r.3.3(5) and (6)). Or
-
(4) contact the parties from time to time in order to monitor compliance with any directions
previously given (to which enquiries the parties must respond promptly; see generally, r.3.1(8)).
Before exercising its powers under r.3.3(4) to make an order without hearing the parties or giv- ing them an opportunity to make representations, the court must be very certain that it has all the material which it needs in order to make such an order fairly and in compliance with the overrid- ing objective (Shawton Engineering Ltd v DGP International Ltd [2003] EWCA Civ 1956, CA (appeal against order under r.30.2(4) made on court’s own initiative transferring case from provincial city to London allowed).
Sub-rule (7) of r.3.3 was added by the Civil Procedure (Amendment No.2) Rules 2004 (SI 2004/ 2072). A similar addition was made to r.3.4. These and related amendments put on to a statutory basis the court’s jurisdiction, when striking out a statement of case and in other circumstances, to impose orders restraining parties bringing proceedings or making applications that are vexatious in character. For explanation, see para.3.11.1.
Rule 23.8 states that, in certain circumstances, the court may deal with an application without a hearing. One of the circumstances is that the court does not consider that a hearing would be ap- propriate (r.23.8(c)). Practice Direction 23A (Applications) para.11.2 (see para.23APD.11) states that, where that particular circumstance applies, the court will treat the application “as if it were proposing to make an order on its own initiative”. Accordingly, where the court, acting under r.23.8(c), dispenses with the hearing of an application and deals with it on paper, the provisions of r.3.3 apply, with the result (amongst other things) that a party affected by the order has the right under r.3.3(5) to apply to the court to have it set aside, varied or stayed (rather than being left to the remedy of pursing an appeal); see e.g. Collier v Williams [2006] EWCA Civ 20; [2006] 1 W.L.R. 1945; [2006] P.I.Q.R. P18.
ECHR art.6(1) provides for a fair and public hearing in the determination of civil rights and obligations: Stallinger and Kuso v Austria (1998) 26 E.H.R.R 81, ECtHR; Helmers v Sweden (1993) 15 E.H.R.R 285, ECtHR; and Axen v Germany (1984) 6 E.H.R.R 195, ECtHR.
Not all orders will be considered determinative of a civil right or obligation such that the requirements of ECHR art.6(1) apply. For consideration of the issue of striking out a statement of case which discloses no reasonable cause of action see para.3.4.1. Article 6(1) is not generally considered to apply to interlocutory hearings: see further para.39.2.1.
Where a court has made an order without hearing the parties the existence of a right to apply to the court to set the order aside will probably be sufficient in the majority of cases to ensure compli- ance with the requirements of ECHR art.6(1).
Where parties have agreed directions and informed the court as to them, the court should not exercise its power to make different directions of its own motion, without notice and without hear- ing representations from either party, unless the circumstances were exceptional (Re A Debtor, No.20 SD 1999 [2000] L.T.L. 8 February, Ch D).
Application to set aside
Where a court does not consider that a hearing of an application would be appropriate (r.23.8(c)), and considers the points made by the parties on paper, the effect of para.11.2 of PD 23A—Applica- tions (see para.23APD.11 below) is that the court proceeds as if it were proposing to make an order of its own initiative, with the consequence that r.3.3 applies. In such circumstances any party af- fected by the order may apply to have any order made set aside, varied or discharged (r.3.5(a)) (R. (MD (Afghanistan)) v Secretary of State for the Home Department [2012] EWCA Civ 194; [2012] 1 W.L.R. 2422 at [21]). The right so to apply exists whether or not the order contains the statement of such a right which is required by r.3.3(5)(b) (see R. (Nolson) v Stevenage BC [2020] EWCA Civ 379; and see further para.23.8.2).
An application under r.3.3(5)(a) to set aside, vary or stay an order made under r.3.3(4) should involve a rehearing of the issue, not a review of the decision made (Al-Zahra (Pvt) Hospital v DDM [2019] EWCA Civ 1103; but see also R. (Kuznetsov) v Camden LBC [2019] EWHC 3910 (Admin)).
In Collier v Williams [2006] EWCA Civ 20; [2006] 1 W.L.R 1945; [2006] P.I.Q.R. P18, CA, the Court of Appeal said it is good practice to require any application under r.3.3(5) to be made at a hearing rather than on paper. If a judge dismisses an application under r.3.3(5), whether on paper or at a hearing, any further application under r.3.3(5) should usually be struck out as an abuse of process, unless it is based on substantially different material from the earlier application (in which case different considerations will arise) (above [37]). See further para.23.0.17.
Own initiative directions as to forum non conveniens
The court has jurisdiction to stay proceedings commenced in England and Wales if it considers that there is another available forum which is clearly and distinctly more appropriate. The court has power to make such an order even in circumstances in which it is not open to the defendants to
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3.4
apply for such directions (as to this, see further r.11(5) and para.11.1.1). In Cook v Virgin Media Ltd [2015] EWCA Civ 1287; [2016] 1 W.L.R. 1672, two separate personal injury claims relating to ac- cidents which occurred in Scotland were commenced in the County Court and were assigned to the Carlisle hearing centre (as being the nearest to Scotland). In their defences both defendants pleaded that the Scottish Courts were the correct courts to hear the claims but, in both cases, no ap- plications having been made under r.11(1), the defendants had lost the right to challenge the jurisdiction of the English courts. Nevertheless a district judge stayed both claims on the grounds that Scotland was the most convenient forum and directed a hearing for the claimants to show cause why the claims should be allowed to proceed in England. At that hearing the district judge exercised his case management powers under r.3.1(2)(m) to strike out both claims on the principal ground that they should have been brought in Scotland. That decision was upheld on appeal and on a second appeal to the Court of Appeal. (Lord Dyson MR expressed the view obiter that, instead of striking out under r.3.1(2)(m) it would have been preferable in at least one of the two cases to make an order staying the proceedings under r.3.1(2)(f).)
Power to strike out a statement of case1
3.4—(1) In this rule and rule 3.5, reference to a statement of case includes reference to part of a statement of case.
(2) The court may strike out(GL) a statement of case if it appears to the court—
-
(a) that the statement of case discloses no reasonable grounds for bringing or defending the claim;
-
(b) that the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings; or
-
(c) that there has been a failure to comply with a rule, practice direc-
tion or court order.
(3) When the court strikes out a statement of case it may make any
consequential order it considers appropriate. (4) Where—
-
(a) the court has struck out a claimant’s statement of case;
-
(b) the claimant has been ordered to pay costs to the defendant; and
-
(c) before the claimant pays those costs, the claimant starts another
claim against the same defendant, arising out of facts which are the same or substantially the same as those relating to the claim in which the statement of case was struck out,
the court may, on the application of the defendant, stay(GL) that other claim until the costs of the first claim have been paid.
(5) Paragraph (2) does not limit any other power of the court to strike out(GL) a statement of case.
(6) If the court strikes out a claimant’s statement of case and it considers that the claim is totally without merit—
-
(a) the court’s order must record that fact; and
-
(b) the court must at the same time consider whether it is appropriate
to make a civil restraint order.
(7) If a defendant applies to strike out all or part of the claim form or
particulars of claim, that defendant need not file a defence before the hearing.
Rule 3.4: Effect of rule
Statement of case means “a claim form, particulars of claim where these are not included in the claim form, defence, Pt 20 claim, or a reply to a defence; and includes any further information given in relation to them voluntarily or by court order under rule 18.1” see r.2.3(1). Strike out is defined in the Glossary as “Striking out means the court ordering written material to be deleted so that it may no longer be relied upon”. This rule enables the court to strike out statements of case in whole or in part and then make consequential orders.
A statement of case may be struck out (in whole or in part) if:
-
(a) it discloses no reasonable grounds for bringing or defending the claim;
-
(b) it is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the
proceedings; or
1 Amended by the Civil Procedure (Amendment) Rules 2014 (SI 2014/407) and the Civil Procedure (Amendment No.2) Rules 2022 (SI 2022/783).
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(c) there has been a failure to comply with a rule, practice direction or court order.
Generally, an application for an order striking out of a statement of case will be made during the pre-trial stages of proceedings (often together with an application for summary judgment). However the court may exercise the power immediately before trial or even during the course of trial (and may do so whether or not an application was made before trial and adjourned to be dealt with at the trial). Further, the court may act of its own volition (see r.3.3). However, the occasion to exercise the jurisdiction after the start of trial is likely to be very rare (National Westminster Bank Plc v Rabobank Nederland [2006] EWHC 2959 (Comm); [2007] 1 All E.R. (Comm) 975 (Colman J)). There is no power to strike out a statement of case or a claim after judgment has been given in the claim (BCS Corporate Acceptances Ltd v Terry [2018] EWCA Civ 2422, as to which, see further para.3.1.17.2).
Grounds (a) and (b) cover statements of case which are unreasonably vague, incoherent, vexa- tious, scurrilous or obviously ill-founded and other cases which do not amount to a legally recognis- able claim or defence. This power can be exercised by a judge acting on their own initiative at the stage of issuing a claim (perhaps with a court officer referring the case to the judge under r.3.2) and thus defendants against whom an ill-founded action is sought to be brought will be spared needless expense in having to initiate “strike out” proceedings; see PD 3A (Striking out a Statement of Case) para.2.1 (para.3APD.2).
Ground (c) covers cases where the abuse lies not in the statement of case itself but in the way the claim or defence (as the case may be) has been conducted. The strike-out can be made even where there was nothing in the rule, practice direction or court order breached which specified that this might happen as a consequence of breach. In many circumstances such a strike-out would seem unduly harsh unless the party concerned was warned (possibly in writing by another party) of the risk of their statement of case being struck out if they did not comply with the rule, practice direc- tion or court order in question.
In the case of non-compliance with a rule or practice direction the court may instead order the non-complying party to pay a sum of money into court (see r.3.1(5) and (6)). In the case of non- compliance with a court order the court may instead repeat its order, this time imposing conditions and/or specifying the consequences of failure to comply with the order or condition (r.3.1(3)).
In Biguzzi v Rank Leisure Plc [1999] 1 W.L.R. 1926; [1999] 4 All E.R. 934, the Court of Appeal drew attention to several alternatives to a strike out under r.3.4 which may be appropriate to deal with non-compliance with time limits laid down by rules or orders: awarding costs on the indemnity basis payable forthwith, ordering a party to pay money into court and awarding interest at a higher or lower rate (and see Asiansky Television Plc v Bayer Rosin [2001] EWCA Civ 1792 and the cases cited therein).
In Walsham Chalet Park Ltd v Tallington Lakes Ltd [2014] EWCA Civ 1607; [2015] C.P. Rep 15; the Court of Appeal held that, on an application under r.3.4 for a strike-out for non-compliance, the Mitchell/ Denton principles (which apply to applications under r.3.9; and see further, paras 3.9.3 and 3.9.4) have a direct bearing even though they relate to applications for relief from sanctions rather than applications to impose a sanction. On the facts, applying the Denton three-stage test, it was held that the judge had been entitled to dismiss the strike out application. The defendant had been in breach of the court’s orders, serving its own list of documents late, failing to provide copies of its disclosed documents, and failing to serve its own witness statements. In assessing the serious- ness of a breach, the loss of the trial date was a weighty consideration, but the judge had been entitled to his view that it had impacted more on the claimant than the defendant. It was likely that the trial date would not have been lost if the defendant had acted promptly. Although Mitchell and Denton were said to have a direct bearing and were, in effect, applied, it is to be noted that the Court of Appeal stressed that the ultimate question for the court in deciding whether to impose the sanction of strikeout is materially different from that in deciding whether to grant relief from a sanction that has already been imposed. In a strike-out application under r.3.4 the proportionality of the sanction itself is in issue, whereas an application under r.3.9 for relief from sanction has to proceed on the basis that the sanction was properly imposed (and see further, Cable v Liverpool Victoria Insurance Co Ltd [2020] EWCA Civ 1015; [2020] 4 W.L.R. 110 noted in para.3.4.18).
While many applications under r.3.4(2) can be made without evidence in support (usually if the statement of case discloses no reasonable grounds for bringing or defending the claim), the ap- plicant should consider whether facts need to be proved and, if so, whether evidence in support should be filed and served; see PD (Striking Out a Statement of Case), para.5.2 (para.3APD.5).
Applications under r.3.4 should be made as soon as possible and before allocation if possible (PD supplementing r.3.4, para.5.1, see para.3APD.5). If the application is made by the defendant against the claimant’s statement of case, the claimant cannot obtain a default judgment until that application is disposed of (r.12.3(3)(a)) and the defendant need not file a defence until the applica- tion is heard (r.3.4(7)).
The court may make an order under r.3.4 of its own initiative (r.3.3). The most likely occasion for such an order would be on the filing of a claim form or defence which appears to fall within grounds (a) or (b) above (PD supplementing r.3.4, paras 2.2 and 3.2, see paras 3APD.2 and 3APD.3). The fact that the court allows such a claim or defence to proceed does not prejudice the right of any other party to apply for an order under r.3.4 (PD supplementing r.3.4, paras 2.6 and 3.5, see paras 3APD.2 and 3APD.3).
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3.4.2
If a strike out application is made, the court cannot refuse it on a reading of the papers unless it first hears oral argument on behalf of the applicant: it is a fundamental feature of the English civil justice system that an applicant should be allowed to bring his application to court and make his case before a judge (Frey v Labrouche [2012] EWCA Civ 881; [2012] 1 W.L.R. 3160).
Other provisions in the CPR refer to the court’s power to strike out, not (in particular) a state- ment of case, but (variously) “the claim, “defence” or “any counterclaim”, where certain procedural failures occur, and do so in terms that expressly state that the strike out will take effect “without further order of the court”. For example, failing to file a directions questionnaire (r.26.3(7A) and (8) and see PD 26 para.2.5), or a pre-trial checklist (r.28.5(3) and PD 28 para.6.5 in fast track cases, and r.29.6(3) and PD 29 para.8.3 in multi-track cases). See also, the rules in this Part dealing with non-payment of fees (rr.3.7, 3.7A and 3.7B).
Rule 3.4(2)(a): Statement of case discloses no reasonable grounds for bringing or defending the claim
Paragraph 1.4 of the PD (Striking Out a Statement of Case), para.3APD.1, gives examples of cases where the court may conclude that particulars of claim disclose no reasonable grounds for bringing the claim: those claims which set out no facts indicating what the claim is about; those claims which are incoherent and make no sense; and those claims which contain a coherent set of facts but those facts even if true, do not disclose any legally recognisable claim against the defendant.
Paragraph 1.6 of the PD, para.3APD.1, states that a defence may fall within r.3.4(2)(a) where it consists of a bare denial or otherwise sets out no coherent statement of facts, or the facts it sets out, while coherent, would not even if true amount in law to a defence to the claim.
Statements of case which are suitable for striking out on ground (a) include those which raise an unwinnable case where continuance of the proceedings is without any possible benefit to the respondent and would waste resources on both sides (Harris v Bolt Burdon [2000] C.P. Rep. 70; [2000] C.P.L.R. 9). A claim or defence may be struck out as not being a valid claim or defence as a matter of law (Price Meats Ltd v Barclays Bank Plc [2000] 2 All E.R. (Comm) 346, Ch D). However, it is not appropriate to strike out a claim in an area of developing jurisprudence, since, in such areas, decisions as to novel points of law should be based on actual findings of fact (Farah v British Airways, The Times, 26 January 2000, CA referring to Barrett v Enfield BC [2001] 2 A.C. 550; [1989] 3 W.L.R. 79, HL). A statement of case is not suitable for striking out if it raises a serious live issue of fact which can only be properly determined by hearing oral evidence (Bridgeman v McAlpine- Brown, 19 January 2000, unrep., CA). An application to strike out should not be granted unless the court is certain that the claim is bound to fail (Hughes v Colin Richards & Co [2004] EWCA Civ 266; [2004] P.N.L.R. 35, CA (relevant area of law subject to some uncertainty and developing, and it was highly desirable that the facts should be found so that any further development of the law should be on the basis of actual and not hypothetical facts)).
Where a statement of case is found to be defective, the court should consider whether that defect might be cured by amendment and, if it might be, the court should refrain from striking it out without first giving the party concerned an opportunity to amend (In Soo Kim v Youg [2011] EWHC 1781 (QB)).
The ECHR art.6(1) right of access to a court may require caution on the part of courts in exercising the r.3.4(2)(a) power to strike out a statement of case which appears to disclose no reasonable grounds for bringing or defending a claim, particularly where it would be applying the rules in such a way as to exclude an entire category of claims from the courts or confer blanket “immunities” from civil liability on particular groups: Fayed v United Kingdom (1994) 18 E.H.R.R 393 ([65]). In Osman v United Kingdom (2000) 29 E.H.R.R 245, the ECtHR held that the striking out by the Court of Appeal of the applicant’s statement of claim on the basis that it was contrary to public policy for the police to be under a duty of care in the circumstances of the case was a breach of the art.6(1) right of access to a court. The ECtHR found that the court had proceeded on the basis that the police had a blanket immunity from civil liability in respect of their acts and omis- sions in the investigation and suppression of crime.
The force of Osman was weakened by a subsequent judgment of the ECtHR in Z v United Kingdom [2002] 34 E.H.R.R. 3; [2001] 2 F.L.R. 612, ECtHR. The court affirmed that striking out a claim was not inherently contrary to the right of access to a court. It upheld a decision to strike out a claim in negligence on the basis that the strike out resulted not from a blanket immunity but from the application of domestic law principles governing the constituent elements of a cause of action.
English courts have taken the view that art.6(1) does not prevent the striking out of claims in ap- propriate cases since it applies only to “genuine and serious” disputes about civil rights and obliga- tions, although a claim submitted to a tribunal for determination must be presumed to be genuine and serious unless there are indications to the contrary. See also Palmer v Tees Health Authority (2000) 2 L.G.L.R. 69; [2000] P.I.Q.R. P1 and Jarvis v Hampshire CC [1999] 1 W.L.R. 2042, CA (strike out refused on appeal on other grounds, sub nom. Phelps v Hillingdon LBC [2000] 3 W.L.R. 776) (Osman did not prevent the court exercising its power to strike out in a “clear and obvious” case: see transcript). In Kent v Griffiths [2001] Q.B. 36, CA Lord Woolf stated that:
“... it would be wrong for the Osman decision to be taken as a signal that, even when the legal 92
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position is clear and an investigation of the facts would provide no assistance, the Courts should be reluctant to dismiss cases which have no real prospect of success. Courts are now encouraged, where an issue or issues can be identified which will resolve or help to resolve litigation, to take that issue or those issues at an early stage of the proceedings so as to achieve expedition and save expense. There is no question of any contravention of art.6 in so doing.”
Lord Woolf’s comments were endorsed in Outram v Academy Plastics Ltd [2001] I.C.R. 367, CA.
A statement of case which discloses no reasonable grounds may also be an abuse of the court’s
process, and, in respect of it, the opposing party may be entitled to summary judgment under Pt
24. Thus, there is no exact dividing line between ground (a) and ground (b) (as to which see
para.3.4.3) or between either of them and Pt 24 (as to which see para.3.4.21).
Rule 3.4.(2)(b): Statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings
Although the term “abuse of the court’s process” is not defined in the rules or practice direc- tion, it has been explained in another context as “using that process for a purpose or in a way significantly different from its ordinary and proper use” (Attorney General v Barker [2000] 1 F.L.R. 759, DC, per Lord Bingham of Cornhill, Lord Chief Justice). The categories of abuse of process are many and are not closed. The main categories which have been recognised in the case law to date are described in the following paragraphs. The court has power to strike out a prima facie valid claim where there is abuse of process. However there has to be an abuse, and striking out has to be supportive of the overriding objective. It does not follow from this that in all cases of abuse the correct response is to strike out the claim. In a strike-out application the proportionality of the sanction is very much in issue; see Walsham Chalet Park Ltd v Tallington Lakes Ltd [2014] EWCA Civ 1607. In Biguzzi v Rank Leisure Plc [1999] 1 W.L.R. 1926; [1999] 4 All E.R. 934, the Court of Ap- peal drew attention to several alternatives to a strike out under r.3.4; see 3.4.1 above. The striking out of a valid claim should be the last option. If the abuse can be addressed by a less draconian course, it should be.
In T v Nugent Care Society [2004] EWCA Civ 51; [2004] 1 W.L.R. 1129, it was held that it was not an abuse of process for a claimant to bring an individual claim when there was a GLO in place. In any event, on the facts, it would be disproportionate to strike out the claim as there were alternative steps available to protect the defendant. Note, however, that a claimant applying to join the register in group litigation after the cut-off date may be faced with having to apply for relief from sanction under r.3.9; see para.19.24.3.
Vexatious proceedings
The function of the court is to do justice between the parties, not to allow its process to be used as a means of achieving injustice. In an extreme case, a party by their conduct may forfeit their right to take part in a trial. For example, where they demonstrate that they are determined to pursue proceedings with the object of preventing a fair trial (Arrow Nominees Inc v Blackledge [2000] 2 B.C.L.C. 167, CA (forgery of documents as part of disclosure process, coupled with perjured evidence)). In such circumstances, their object is inimical to the process which they purport to invoke. It is an abuse to bring vexatious proceedings, i.e. two or more sets of proceedings in respect of the same subject matter which amount to harassment of the defendant in order to make them fight the same battle more than once with the attendant multiplication of costs, time and stress. In this context it is immaterial whether the proceedings are brought concurrently or serially. In addi- tion to striking out the statements of case in such proceedings the court may make a civil restraint order, as to which, see para.3.4.10, below. Whilst it might not be appropriate for the County Court to make such an order in relation to the High Court, there is no difficulty in the High Court mak- ing such a order in relation to the County Court if the facts merit it (Ebert v Birch [2000] Ch. 484, CA).
There is no abuse if the claimant has sufficient justification for commencing concurrent proceed- ings (Merrill Lynch, Pierce Fenner & Smith Inc v Raffa [2001] C.P. Rep 44, QB; claimant seeking sum- mary judgment in England where concurrent proceeding in Egypt were deferred pending the conclusion of linked criminal proceedings there; and see further, the commentary to SCA 1981 s.49, Vol.2, paras 9A-183 (“Concurrent civil proceedings”) and 9A-185 (“Lis alibi pendens, forum non conveniens and foreign jurisdiction clauses”).
Attempts to re-litigate issues which were raised, or should have been raised, in previous proceedings
The court’s power to strike out abusive proceedings is often employed to give effect to principles relating to res judicata, a portmanteau term which is used to describe a number of different legal principles including cause of action estoppel (the prohibition on the relitigating of a cause of ac- tion held to exist (or not exist) in earlier proceedings); issue estoppel (the prohibition on relitigating an issue decided in earlier proceedings even though in respect of a different cause of action); and the principle first formulated by Wigram VC in Henderson v Henderson (1843) 3 Hare 100, which precludes a party from raising in subsequent proceedings matters which were not, but could and should have been raised in the earlier ones (as to res judicata, see further Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46; [2014] A.C. 160; [2013] 3 W.L.R. 299 at [17] to [26]).
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The rule in Henderson extends the res judicata principle in two respects: the rule applies, not to matters which were decided by a court, but to matters which might have been decided but were not; the rule applies not just to subsequent litigation between the same parties or their privies, but also to parties to the subsequent proceedings who were not joined as parties to the earlier proceedings. Because this is so, the need to consider the element of abuse of process has much greater emphasis in these cases.
“The rule is not based on the doctrine of res judicata in a narrow sense, nor even on any strict doctrine of issue or cause of action estoppel. It is a rule of public policy based on the desirability, in the general interest as well as that of the parties themselves, that litigation should not drag on for ever and that a defendant should not be oppressed by successive suits when one would do. That is the abuse at which the rule is directed” (Lord Bingham in Barrow v Bankside Agency Ltd [1996] 1 W.L.R. 257; [1996] 1 All E.R. 981).
Whether relitigation of a decided issue is an abuse depends upon all of the circumstances. It does not follow that a matter should have been raised in earlier proceedings simply because it could have been raised in those proceedings. A broad, merits-based judgment should be adopted, taking account of all the public and private interests involved and all the facts of the case; Johnson v Gore Wood & Co (No.1) [2002] 2 A.C. 1, HL. In all the circumstances of that case it was held not to be an abuse for a claimant to commence proceedings seeking remedies in respect of matters which had formed the subject matter of previous proceedings brought by a company which he controlled. This “broad, merits based” approach does not refer to the substantive merits but to the merits relevant to the question whether the claimant should have brought their claim as part of the earlier proceedings; see: Stuart v Goldberg Linde [2008] EWCA Civ 2; [2008] 1 W.L.R. 823, CA.
In Aldi Stores Ltd v WSP Group Plc [2008] 1 W.L.R. 748; [2008] P.N.L.R. 14, the Court of Appeal referred with approval to the judgment of Clarke LJ (as he then was) in Dexter v Vlieland-Boddy [2003] EWCA Civ 14, where he summarised the principles to be derived from Johnson v Gore-Wood as follows:
-
(i) where A has brought an action against B, a later action against B or C may be struck out where the second action is an abuse of process;
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(ii) a later action against B is much more likely to be held to be an abuse of process than a later action against C;
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(iii) the burden of establishing abuse of process is on B or C or as the case may be;
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(iv) it is wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive;
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(v) the question in every case is whether, applying a broad merits based approach, A’s
conduct is in all the circumstances an abuse of process; and
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(vi) the court will rarely find that the later action is an abuse of process unless the later ac-
tion involves unjust harassment or oppression of B or C;
Clarke LJ said (at [50]) that proposition (ii) above:
“... seems to me to be of importance because it is one thing to say that A should bring all his claims against B in one action, whereas it is quite another thing to say that he should bring all his claims against B and C (let alone against B, C, D, E, F and G) in one action. There may be many entirely legitimate reasons for a claimant deciding to bring an action against B first and, only later (and if necessary) against others.”
In Aldi Stores, the Court of Appeal held that the fact that the defendants to the original action and to the new action were different did not operate as a bar to the finding of abuse but was a powerful factor in the application of the broad merits based judgment. It was also held that no distinction in law between cases where the original action concludes by settlement and where it concludes by judgment. It was further held that that the decision as to whether or not there has been an abuse is not the exercise of a discretion. It was a decision involving the assessment of a large number of factors to which there can only be one correct answer as to whether or not there has been an abuse. On the facts in Aldi Stores, the claimant had not behaved in any way that was culpable or improper and this was held to be an important factor even though neither impropriety or culpability is a necessary finding before a claim can be struck out. The claimant’s decision not to proceed against the present defendants in the first action was commercially reasonable, forensically legitimate and reasonably transparent and the present defendants were being faced with a claim for the first time. The Court of Appeal, allowing the appeal against the order striking out the claim, held that there was no abuse. As to the Aldi Guidelines, see further, below.
The rule in Henderson has usually been applied where a claimant starts fresh proceedings which could and should have been brought in earlier proceedings which were pursued to judgment. However it is not conceptually impossible for it to apply also in relation to separate stages of the same litigation (Tannu v Moosajee [2003] EWCA Civ 815, Seele Austria GMBH Co KG v Tokio Marine Europe Insurance Ltd [2009] EWHC 255 (TCC); [2009] B.L.R. 261, Kensell v Khoury [2020] EWHC 567 (Ch), and Koza Ltd v Koza Altin Isletmeleri SA [2020] EWCA Civ 1018; [2021] 1 W.L.R. 170.
“[105] ... the court should be astute to prevent a claiming party from putting its case one way, thereby causing the other side to incur considerable expense, only for the claiming party to lose and then come up with a different way of putting the same case, so as to begin the process all over again. The Civil Procedure Rules are designed to avoid the litigation equivalent of death by a thousand cuts. I have no doubt that, on the basis of the facts as I
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have summarised them ... above, it would be wrong and unfair to allow the claimant in these proceedings to go back to square one and attempt to run a case which could and should have been raised years ago” (Coulson J in Seele).
The rule in Henderson is as capable of applying to defendants and defences as to claimants and claims if the circumstances so warrant; Barnett-Waddington Trustees (1980) Ltd v Royal Bank of Scotland Plc [2017] EWHC 834 (Ch). In that case the claimant had sought declaratory relief in respect of a loan agreement which the defendant bank had disputed (unsuccessfully) only upon narrow grounds and a declaration, framed by reference to those narrow grounds, was made. The defendant bank continued to dispute the claimants’ rights relying upon wider grounds which it could and should have raised earlier. In a subsequent action the claimants were granted further declaratory relief by way of summary judgment.
Other case examples of the rule in Henderson, decided post 2001 (after Johnson v Gore Wood)
There are many cases each year in which the rule in Henderson is raised. There is no abuse if, at the time of the earlier proceedings, the claimants did not have all the information necessary to bring their claim (Walbrook Trustees (Jersey) Ltd v Fattal [2009] EWCA Civ 297; [2010] C.P. Rep. 1 and see also Playboy Club London Ltd v Banca Nazionale Del Lavoro SpA [2018] EWCA Civ 2025). Striking out a second claim was held to be inappropriate where legal aid franchising arrangements had prevented the claimants from instructing a single firm of solicitors to bring both claims together (BA v Home Office [2012] EWCA Civ 944). It was held not to be an abuse to bring a second action where the two claims involved different issues, where a fair trial was still possible, the defendant had been aware of the new claim for many years and the claimants had not said or done anything to lead the defendant to think that they would not bring a second claim in respect of it (Henley v Bloom [2010] EWCA Civ 202; [2010] 1 W.L.R. 1770).
In Takhar v Gracefield Developments Ltd [2019] UKSC 13; [2020] A.C. 450, the Supreme Court considered how the broad merits-based approach laid down in Johnson v Gore Wood (see above) af- fects an action to rescind a judgment on the grounds that it had been obtained by fraud. Takhar was a rescission action in which the Court of Appeal had held that the claimant was required to establish that the evidence of fraud had not been available at the time of the first trial, and could not have been discovered with reasonable diligence. Allowing the appeal, the Supreme Court held that where it could be shown that a judgment had been obtained by fraud, and where no allegation of fraud had been raised at the trial, a requirement of reasonable diligence should not be imposed on the party seeking the rescission of that judgment. However, where issues of fraud had been raised at the original trial and the claimant now advanced new evidence of fraud, the court has a discretion as to whether or not to grant rescission. In Takhar the existence of fraud had not been decided in the first action. It was a new issue and did not involve the re-litigation of an identical claim.
Takhar was followed and applied in Elu v Floorweald Ltd [2020] EWHC 1222 (QB), a case in which the statement of case of the party seeking rescission was struck out: the allegations of fraud had been considered by the court and dismissed in the earlier proceedings.
Takhar was followed and applied in Park v CNH Industrial Capital Europe Ltd [2021] EWCA Civ 1766. In that case, the defence of a party (P) had been struck out on procedural grounds and the claimant (CNH) had subsequently entered judgment under r.3.5. P commenced these proceedings to set aside that judgment on grounds of a fraudulent misstatement of facts made by CNH in its particulars of claim. The Court of Appeal held that P was entitled to bring these proceedings even though P could have raised the allegation of fraud in the earlier action but failed to do so.
The rule in Henderson was also considered, explained and applied by the Court of Appeal in Koza Ltd v Koza Altin Isletmeleri AS [2021] EWCA Civ 1018; [2021] 1 W.L.R. 170.
In Read v Eastern Counties Leather Group Ltd [2022] EWHC 31 (Ch), a claim for rescission of an order for possession made in previous proceedings was struck out on two grounds: (i) in the earlier proceedings the claimant must have known about, or at the very least suspected the existence of, the allegations of fraudulent misrepresentation which he now relied upon in order to obtain rescis- sion; alternatively (ii) the defendant was entitled to summary judgment under Pt 24 because the claimant’s claim for rescission had no realistic prospect of success.
The Aldi guidelines
The guidance given as to strike out applications on grounds of res judicata which was given by the Court of Appeal in Aldi Stores Ltd v WSP Group Plc [2007] EWCA Civ 1260; [2008] 1 W.L.R. 748; [2008] P.N.L.R. 14 is set out above. In that case, Thomas LJ (as he then was) concluded his judgment with these words, at [31]:
“... for the future, if a similar issue arises in complex commercial multi-party litigation, it must be referred to the court seized of the proceedings. It is plainly not only in the interest of the parties, but also in the public interest and in the interest of the efficient use of court resources that this is done. There can be no excuse for failure to do so in the future.”
The possibility of further proceedings should be raised with the court in the first proceedings commenced at an early stage so that the appropriate case management directions can be made. This is known as the Aldi requirement, non-compliance with which involves the claimant running a
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risk that the pursuit of a second claim would constitute an abuse (Stuart v Goldberg Linde [2008] 1 W.L.R. 823, noted below; Gladman Commercial Properties v Fisher Hargreaves Proctor [2013] EWCA Civ 1466; [2014] P.N.L.R. 11 (CA) at [65]–[67], [82], [83]).
In Clutterbuck v Cleghorn [2017] EWCA Civ 137, the Court of Appeal examined the guidelines in Aldi Stores and concluded that a judge had been entitled to strike out two claims as an abuse of process for the claimants’ failure to bring them before the court in earlier proceedings involving the same defendant. The Aldi guidelines were mandatory and they applied to the instant proceedings. However, their third claim against a party who was not part of the earlier proceedings should not have been struck out. The court stated that an inexcusable failure to comply with the Aldi guidelines was a relevant factor in assessing whether a party was abusing the process of the court. In assessing whether there was an abuse, the court had to carry out a broad merits-based judgment which took account of the public and private interests involved and also of the facts of the case.
In Stuart v Goldberg Linde [2008] EWCA Civ 2; [2008] 1 W.L.R. 823, CA, the claimant had suc- cessfully sued the defendant solicitor for breach of a solicitor’s undertaking given in anticipation of a contract being concluded between the claimant and the solicitor’s client. The claimant then brought a second action against the solicitor alleging inducement of a breach of contract and misrepresentation. The Court of Appeal, allowing the appeal, held on the facts that the second ac- tion was not an abuse of process. The majority of the Court of Appeal regarded it as reasonable to proceed with the breach of undertaking claim alone. The issues in the first action were clear, simple and self-contained. The proceedings would have been on a different scale had the induce- ment or misrepresentation claims been included. Furthermore, the second action was not an abuse of process as the claimant only became aware of the facts of the inducement claim about three months before the trial of the first action and was only aware of all of the facts relating to the misrepresentation claim after trial. The Court of Appeal made four points of general application: [1] if the prospects of success are uncertain but the case is not suitable for summary judgment for either party, it is inappropriate to weigh the prospects of success in the balance in deciding whether it is an abuse of process to bring the claim in later proceedings (the “broad, merits based” approach in Johnson v Gore Wood was not a reference to the substantive merits but to the merits relevant to the question whether the claimant should have brought their claim as part of the earlier proceedings); [2] delay, of itself, is not relevant to whether the second claim is an abuse of process; [3] a claimant’s failure to use reasonable diligence in finding out facts relevant to whether they had a possible claim might be relevant to the abuse of process issue, but there was no general principle that a potential claimant was under a duty to exercise reasonable diligence to find out the facts relevant to whether they had or might have a claim; and [4] a claimant who keeps a second claim against the defendant up their sleeve while prosecuting the first is at high risk of being held to have abused the court’s process. Furthermore, as was stated in Aldi Stores, the proper course is for the claimant to raise the possibility of a second claim with the court so that appropriate case management direc- tions can be given.
In Gladman Commercial Properties v Fisher Hargreaves Proctor [2013] EWCA Civ 1466 it was held that the judge had been correct to strike out a claim for fraudulent misrepresentation brought against chartered surveyors in connection with the purchase of land as it consisted of an abusive at- tempt to pursue a cause of action already released (by settlement against other joint tortfeasors), and the claimant had been fully compensated for the alleged loss by an earlier settlement agree- ment with the landowners. The Court of Appeal emphasised that the Aldi case regarded the requirement to refer a contemplated future claim for case management directions in the earlier claim as mandatory and as serving the public interest in the efficient use of court resources. It described the failure to do so in the instant case as inexcusable. The judge had been correct to treat a failure by the claimant to follow the mandatory guideline as one of the relevant matters pointing to a conclusion that the instant claim constituted an abuse of process.
In Otkritie International Investment Management Ltd v Threadneedle Management Services Ltd [2017] EWCA Civ 274; [2017] 2 Costs L.R. 375, the claimant commenced a second action having, in the first action, wrongly failed to comply with the Aldi guidelines. Knowles J refused to strike out the second action but did impose a costs penalty on the claimants (75% of the costs of the defendant’s application) and this decision, and the order for costs, were both upheld by the Court of Appeal. Knowles J found that it was likely that, if the Aldi guidelines had been followed, the court would not have required the defendant in the second action to be joined as a party to the first action.
Previous litigation terminated without any substantive adjudication or settlement
The principles of res judicata, including the rule in Henderson, do not apply where the earlier proceedings terminated prematurely, without any substantive adjudication or settlement. However, there may be other grounds upon which such claims may be struck out as an abuse of process.
In Securum Finance Ltd v Ashton [2001] Ch. 291; [2000] 3 W.L.R. 1400, CA, the claimant’s first action had been struck out on grounds of inordinate and inexcusable delay. The Court of Appeal concluded that the claimant’s wish to have a “second bite at the cherry” has to be weighed with the overriding objective of the CPR in mind, and in particular, the court’s need to allot its limited resources to other cases. The Court of Appeal ruled that the conduct which had led to the first ac- tion being struck out had been so serious as to amount to an abuse of the court’s process. Although
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misconduct as serious as that did not by itself prevent the court from allowing a second action to proceed, the court should start with the assumption that if a party has had one action struck out for abuse of process, some special reason has to be identified to justify a second action being al- lowed to proceed.
In C (A Child) v CPS Fuels Ltd [2001] EWCA Civ 1597, the claimant’s solicitors failed to comply with an unless order and, as a result, the first action was struck out. Prior to the making of the un- less order, between 1996 and 1999, there had been repeated failures by the claimant’s solicitors to comply with earlier orders—on at least six occasions. The claimant then applied to set aside the order striking out the claim (which was refused) and subsequently commenced a second action. The second action was struck out as an abuse of process. On the appeal to the Court of Appeal, the decision to strike out the second action was upheld. The first action had been struck out, not only for failure to comply with the final unless order, but because there had been a number of failures to comply with earlier orders and a failure to engage with the case management process. Although the failures were not intentional, no good explanation had been given and the failures were “inexcusable” (see Bodey J at [16]). Judge LJ (as he then was) agreed with Bodey J’s judgment and that the words “some special reason” (derived from an earlier case) were not a fixed formula and that other terms, such as “very good reason” or “powerful” or “sufficient” reason, expressed the same principle.
The “special” or “powerful” reason requirement identified in Securum and C (A Child) applies where the conduct of the first action has been found to have been an abuse of process or otherwise inexcusable; in such a case the second action will be struck out as an abuse of process unless some special or powerful reason is shown. This is so even if the first action was struck out before the adjudication of any issues raised therein. However, if the first action was not itself an abuse of process, the court’s consideration of a second action should not start with an assumption that the second action is abusive.
In Cranway Ltd v Playtech Ltd [2008] EWHC 550 (Pat) the first action had been struck out for failure to comply with a practice direction dealing with the requirements for a pleading. There was no appeal against that decision. An application to strike out a second action on the grounds that it was an abuse of process because the first action had been struck out was dismissed. Lewison J (as he then was) applied the approach in Securum, stating that the court must take a broad view of the reasons why the original action was struck out and the stage at which it was struck out. At [20] he concluded that the reason why a claim was struck out was an important factor in deciding whether a subsequent claim is or is not abusive. In the present case, the original claim had not been struck out because it was an abuse of process.
In Aktas v Adepta [2010] EWCA Civ 1170, the claimant’s first action was struck out for failure, due to mere negligence, to serve a claim form in time and a subsequent second action was also struck out as being an abuse of process. Rix LJ concluded that where the first action had been struck out for procedural failure (and had not been lost on the merits), the second action would be an abuse of process only where the conduct in the first action itself amounted to an abuse of process; and that such an abuse of process in the first action would arise where there had been (a) intentional and contumelious conduct or (b) want of prosecution (i.e. inordinate and inexcusable delay) or (c) wholesale disregard of rules of court: see [48], [52], [72] and [90]. Applying this ap- proach, he concluded that a mere negligent failure to serve a claim form in the first action did not fall into any of these categories and was not an abuse of process; thus the second action was not an abuse of process (and see also [92]).
In Davies v Carillion Energy Services Ltd [2017] EWHC 3206 (QB); [2018] 1 W.L.R. 1734, the claimant brought a claim in 2010 which was struck out for his failure to file and serve particulars of claim pursuant to an unless order. He did not appeal, nor did he apply for relief from sanctions. In 2015 he brought a second claim against the same defendant who applied to have it struck out as an abuse of process. On the facts, Morris J decided that the claimant's conduct in the first claim had been neither an abuse of process nor inexcusable and, hence, that the second claim should not be struck out as an abuse of process. The learned judge ruled that a single failure to comply with an unless order was not, of itself, sufficient to conclude that the second action was an abuse of process.
In Harbour Castle Ltd v David Wilson Homes Ltd [2019] EWCA Civ 505, C’s claim (the “first ac- tion”) was struck out because of C’s failure to comply with an unless order to provide security of costs. It was common ground that, at all material times, C had not itself possessed the funds to provide security, but that its sole shareholder (X) personally had the resources to do so. The unless order was made prior to the change in practice brought about by the Supreme Court’s ruling in Goldtrail Travel Ltd (In Liquidation) v Aydin [2017] UKSC 57; [2017] 1 W.L.R. 3014 (as to which see para.3.1.14). For commercial reasons X did not assist C to comply with the unless order, and therefore its claim was automatically struck out in December 2012. In 2016 C commenced new proceedings (the “second action”) raising the same claims as before and D applied for an order striking out the second action as an abuse of process. The lower court struck out the second action as an abuse and C’s appeal to the Court of Appeal was dismissed.
“[6] The burden of showing that the second action is an abuse lies on the party asserting it, in this case [D], and it must be clearly shown to be an abuse. Whether an action is an abuse is not a question of discretion, but an evaluative assessment to which there can be only one
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answer. These propositions are established by several decisions of this court, including Stuart v Goldberg Linde [2008] EWCA Civ 2, [2008] 1 WLR 823 and Aktas v Adepta [2010] EWCA Civ 1170, [2011] QB 894. If it is an abuse, the court has a discretion whether to strike it out, but, as Rix LJ said in Aktas v Adepta at [53], once satisfied that the second action is an abuse of process it is likely that the court will strike it out, but it does not necessarily follow.”
Bearing in mind the principles set out in Goldtrail, the second action would be an abuse of process if C had decided not to comply with the unless order even though it could have raised sufficient funds to do so. The relevant question in this case was whether X would have provided the requisite funds if he had been requested to do so by C. The burden of proof on this sub-issue fell upon C; it was for C to show that it could not have raised the funds from X. The evidence given by X and oth- ers in the second action led the lower court to the conclusion that X had been the sole directing mind of C, had financed both C and the litigation up to December 2012, and had continued to finance C after that time. On the basis of this evidence the lower court had concluded that the decision not to comply with the unless order had been made by X in his capacity as the directing mind of C and that if, in that capacity, he had concluded that it was in the interests of C to proceed with the litigation, he would personally have provided the necessary funding. C therefore did have access to funding if it chose to seek it.
In Kishore v Revenue and Customs Commissioners [2021] EWCA Civ 505, C submitted a VAT return claiming input tax exceeding £22 million. On D’s refusal of that claim, C commenced an appeal to the First-tier Tribunal (FTT) which made a directions order. The proceedings were later struck out as a result of an unless order requiring C to comply with the directions order. Subsequently D imposed penalties exceeding £2 million on C for alleged inaccuracies in the return. C commenced new appeal proceedings in respect of the penalty assessments. The FTT made an order striking out those proceedings as an abuse of process because issues raised in the earlier proceedings (knowledge of fraud) would also be raised in the new proceedings. The Upper Tribunal (UT) set aside the order of strike out and D’s appeal to the Court of Appeal was dismissed.
“[31] ... it has not been demonstrated that Mr Kishore was guilty of intentional and contumeli- ous conduct, wholesale disregard of the rules or otherwise inexcusable conduct in the [earlier proceedings]. Mr Kishore failed to comply with the FTT’s October 2014 directions and, subsequently, the unless order made on 29 July 2015 in respect of that. I do not think those defaults can be said to represent ‘wholesale disregard of the rules’ ...” (Newey LJ).
As to the correct test to apply, the Court of Appeal upheld the UT’s decision to proceed on the basis that the Johnson v Gore Wood & Co principles (a “broad, merits-based” approach) applied ([29] and [30]). However, it was noted that, in analagous circumstances (a second action after the discontinuance of the first; r.38.7) there is a conflict of authorities at first instance as to the correct approach: Johnson v Gore Wood & Co principles or a simpler resort to the overriding objective ([26]; and see also para.38.7.1 and the cases noted therein and Davies v Carillion Energy Services Ltd (above) at [55(2)] cited in Kishore at [24]).
Collateral attacks upon earlier decisions
In Hunter v Chief Constable of the West Midlands Police [1982] A.C. 529 the House of Lords defined as a further example of abuse of process:
“... the initiation of proceedings in a court of justice for the purpose of mounting a collateral attack upon a final decision against the intending plaintiff which had been made by another court of competent jurisdiction in previous proceedings in which the intending plaintiff had full opportunity of contesting the decision in the court in which it was made.”
The prime example of a claim in which this principle may be invoked is a claim brought against lawyers for negligence in the conduct of the claimant’s defence of criminal proceedings which ended in a verdict, or a plea, of guilty. In such a case the Hunter principle overlaps with principles relating to consistency and coherence and with the doctrine as to illegality (as to which, see further Patel v Mirza [2016] UKSC 42; [2017] A.C. 467 at [99]).
“It is a rule of law and a manifestation of public policy that a civil court will not award dam- ages to compensate a claimant for a disadvantage which the criminal courts have imposed on him or her by way of punishment for a criminal act for which he or she was responsible” (Coulson LJ in Day v Womble Bond Dickinson (UK) LLP [2020] EWCA Civ 447 at [28]).
There is also a large overlap between the rule in Henderson (see para.3.4.5) and the rule in Hunter. Henderson deals with the private interest of a party not to be vexed twice for the same reason. Hunter deals with the public interest of the State in not having issues repeatedly litigated (Michael Wilson & Partners Ltd v Sinclair [2017] EWCA Civ 3; [2017] 1 W.L.R. 2646 at [48] (Simon LJ)).
In Allsop v Banner Jones Ltd [2021] EWCA Civ 7 the Court of Appeal made a distinction between a collateral attack upon an anterior criminal decision and a collateral attack upon an anterior civil (including matrimonial) decision.
“In terms of the facts and circumstances that render relitigation potentially abusive, the fol- lowing points are of particular relevance:
a) There is a public interest in criminal convictions only being challenged by way of ap- peal, and for them not otherwise to be called into question. As Lord Hoffmann put it in [Arthur JS Hall & Co v Simons [2002] 1 A.C. 615, HL] ‘...it would ordinarily be an abuse of process for a civil court to be asked to decide that a subsisting conviction was
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wrong. This applies to a conviction on a plea of guilty as well as after a trial. The resulting conflict of judgments is likely to bring the administration of justice into disrepute... On the other hand, in civil (including matrimonial cases), it will seldom be possible to say that an action for negligence against a legal adviser or representa- tive would bring the administration of justice into disrepute. Whether the original decision was right or wrong is usually a matter of concern only to the parties and has no wider implications...’
b) There is a second, important, distinction between collateral challenge to anterior criminal rather than civil decisions. As Lord Diplock emphasised in Hunter (at 540), criminal decisions do not give rise to res judicata estoppels in the way that civil deci- sions do. That is, at least in part, because there is no meaningful identity of parties between the earlier (criminal) and later (civil) decisions. That, in turn, means that the abuse doctrine has an inevitably greater role where the anterior proceedings the subject of collateral challenge are criminal rather than civil. The doctrine of res judicata estoppel does not operate in the criminal sphere as they do in the civil.” (Marcus Smith J at [44(iv)]; subpara.c) (“Thirdly, and relatedly, ...”) is quoted in para.3.4.12).
Attempts to impugn an earlier criminal decision
The meaning of the phrase “collateral attack” was explained in Smith v Linskills (A Firm) [1996] 1 W.L.R. 763 as an attack which is made in new proceedings rather than by way of appeal in the proceedings in which the impugned decision was made. In that case, the Court of Appeal upheld the striking out of a claim brought against the claimant’s former solicitors for negligence and breach of contract in the conduct of criminal proceedings, which, it was alleged, had led to his conviction and imprisonment.
In the overwhelming majority of cases concerning an earlier decision in criminal proceedings, the failure to successfully attack that decision by way of appeal in those proceedings will lead to a finding that an attempt to re-litigate the matter in subsequent proceedings is an abuse of process (Amin v Director General of the Security Service (MI5) [2015] EWCA Civ 653). Save in an exceptional case (see Walpole v Partridge & Wilson [1994] Q.B. 106, noted below) defendants who pleaded guilty to a criminal charge or were found guilty, cannot bring a civil claim alleging negligence against their former solicitor or counsel who acted for them in those proceedings without first successfully appealing the conviction.
“A conviction may be set aside as unsafe and unsatisfactory when the accused appears to have been prejudiced by ‘flagrantly incompetent advocacy’: see Reg. v. Clinton [1993] 1 W.L.R. 1181. After appeal, the case may be referred to the Court of Appeal (if the conviction was on indictment) or to the Crown Court (if the trial was summary) by the Criminal Cases Review Commission: see Part II of the Criminal Appeal Act 1995.
It follows that in my opinion it would ordinarily be an abuse of process for a civil court to be asked to decide that a subsisting conviction was wrong. This applies to a conviction on a plea of guilty as well as after a trial. The resulting conflict of judgments is likely to bring the administration of justice into disrepute. ... The proper procedure is to appeal, or if the right of appeal has been exhausted, to apply to the Criminal Cases Review Commission under sec- tion 14 of the 1995 Act. ...
Once the conviction has been set aside, there can be no public policy objection to an action for negligence against the legal advisers.” (Lord Hoffmann in Arthur JS Hall & Co v Simons [2002] 1 A.C. 615, HL (at 705 and 706).)
The rule in Hunter is not an inflexible rule to be applied to all cases which might arguably be said to fall within it. Although the mounting of an attack upon an earlier decision might be an abuse of process, it is not necessarily so. There is an abuse of process only if the new proceedings (i) would be manifestly unfair or (ii) would bring the administration of justice into disrepute. In Walpole v Partridge & Wilson [1994] Q.B. 106 a claim against solicitors was not struck out where the claimant alleged that the solicitors had given him bad advice on a point of law and had negligently failed to lodge an appeal in time (as to (i) and (ii) above, see further, para.3.4.20).
In Hunter Lord Diplock stated that a conviction might possibly be challenged in subsequent civil proceedings without being an abuse of the process of the court if the challenger could adduce “fresh evidence” such as to satisfy the test laid down by Earl Cairns LC in Phosphate Sewage Co Ltd v Molleson (1879) 4 App. Cas. 801 (noted in para.3.4.11). However, this obiter dictum should now be reconsidered in the light of Allsop v Banner Jones Ltd [2021] EWCA Civ 7 (at [32] and [44(iv)(c)] and see para.3.4.12).
In some circumstances, defendants are given a statutory right to initiate collateral attacks upon decisions made against them in criminal proceedings. Where an allegation is made under the Civil Evidence Act 1968 s.11, that a party’s conviction for an offence is evidence that they committed that offence, a response by that party that the conviction was erroneous is not, by itself, an abuse of process because s.11(2) clearly permits such a response (McCauley v Hope [1999] 1 W.L.R. 1977, CA). There is controversy as to the quality of the evidence needed to attack a conviction relied upon under this statute: must the party attacking the conviction adduce evidence that satisfies the test laid down in Phosphate Sewage Co Ltd v Molleson (see above) and, if not, can the trial court treat
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the proof of conviction as a weighty piece of evidence in its own right? In CXX v DXX [2012] EWHC 1535 (QB) Spencer J took the latter view but did so only in the context of an application for permission to appeal. As to the status of judgments granting or refusing permission to appeal, see Practice Direction (Citation of Authorities) [2001] 1 W.L.R. 1001, paras 6.1 and 6.2, noted in Vol.1 para.40MPD.2.
In Mueen-Uddin v Secretary of State for the Home Department [2022] EWCA Civ 1073, the claimant sued for libel in respect of a report published by the defendant which alleged that the claimant had committed war crimes. The defendant applied to strike out the claim as an abuse under the Hunter principle; the claimant had been convicted of war crimes by a tribunal in Bangladesh. The Court of Appeal decided (unanimously) that the Hunter principle applies to collateral attacks upon criminal convictions made by foreign courts. In this case the claimant’s opportunity to fully contest the decision of the foreign court had been impaired to such an extent that it might not have been sufficient for the defendants to rely solely upon the criminal conviction to establish an abuse of process. However, it was held (Phillips LJ dissenting on this point) that because of an overlap in this case with the Jameel principle (as to which see para.3.4.14) the libel claim did amount to an abuse of process.
Attempts to impugn an earlier civil decision: res judicata
The principle of finality of earlier civil decisions is mainly preserved by the doctrine of res judicata, that is to say, a decision pronounced by a judicial or other tribunal with jurisdiction over the cause of action and the parties, which disposes, once and for all, of all the fundamental matters decided, so that, except on appeal, they cannot be re-litigated between persons bound by the judg- ment or their privies. Under this doctrine, a party is estopped, as against any other party, from disputing the correctness of the decision, except on appeal. The estoppel may be a “cause of action estoppel” or an “issue estoppel” (a final decision which determines an issue in a cause of action as an essential step in its reasoning).
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“CPR 3.1(7) lists as one of the court’s general powers of case management the power to vary or revoke a prior order made. It is very clear that this provision cannot gener- ally be used to vary or revoke final orders (that is, orders that give rise to a res judicata estoppel) and equally clear that even interlocutory decisions will generally only be varied or revoked where either (a) there has been a material change of circumstance since the original order was made or (b) where the facts on which the original deci- sion was made were (innocently or otherwise) misstated: Tibbles v. SIG plc [2012] EWCA Civ 518, [2012] 1 WLR 2591.” (Allsop v Banner Jones Ltd [2021] EWCA Civ 7 at [24(i)])
Attempts to impugn an earlier civil decision: abuse of process
Given the breadth of res judicata in civil cases, the abuse of process doctrine has a much smaller role in preventing collateral attacks on earlier civil decisions (Allsop v Banner Jones Ltd [2021] EWCA Civ 7 at [44(iv)(c)], quoted below).
In Smith v Linskills (A Firm) [1996] 1 W.L.R. 763 (noted in para.3.4.10) it was said, obiter, that there is no abuse if the party wishing to impugn the earlier decision did not receive a full op- portunity to contest that decision before it was made; for example, where judgment is entered against the party on the ground of procedural default, or on an application for summary judgment (Smith v Linskills at 770A).
In Re Norris [2001] UKHL 34; [2001] 1 W.L.R. 1388 the House of Lords held that it was not an abuse of process for a defendant to assert her beneficial ownership of land even though, in earlier proceedings in which she had been called as a witness, her evidence as to her beneficial ownership had not been believed (and see also Shalabayev v JSC BTA Bank [2016] EWCA Civ 987; [2017] 1 W.L.R. 603, a case which is broadly similar to Norris; and Law Society v Dua [2020] EWHC 3528 (Ch)).
A claim made, or a defence raised, by a party seeking to attack a decision made in earlier civil proceedings may be struck out as an abuse even if that party is not bound by res judicata if it is shown that the new proceedings (i) would be manifestly unfair manifestly unfair to a party to the
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Apart from appeals, there are three main ways in which parties can lawfully challenge a civil decision which is otherwise binding upon them:
D an action in which a party seeks to have a judgment made in earlier proceedings set aside on grounds that it was fraudulently obtained: Takhar v Gracefield Developments Ltd [2019] UKSC 13; [2020] A.C. 450 (as to which, see further, para.3.4.5);
D an action in which a party seeks to have a judgment made in earlier proceedings set aside on the basis of new facts have come to light which fundamentally change the complexion of the case; see Phosphate Sewage Company Ltd v Molleson (1879) 4 App. Cas. 801 at 814. The new evidence must be such as to “fundamentally change the shape of the case” (Amin v Director General of the Security Service (MI5) [2015] EWCA Civ 653 at [52]). In Hunter this test was described as being more rigorous than the Ladd v Marshall test, justifying the use of fresh evidence on appeals (see para.52.21.3, below); and
D an application in the proceedings in which the earlier judgment was made, seeking an order setting aside or varying the judgment under r.3.1(7) (see para.3.1.17).
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new proceedings; or (ii) would bring the administration of justice into disrepute (Secretary of State for Trade and Industry v Bairstow [2003] EWCA Civ 321; [2004] 1 Ch. 1. However, in that case, the defendant’s challenge to an earlier civil decision made against him was held not to be an abuse; the new proceedings in that case (under the Company Directors Disqualification Act 1986) were akin to criminal proceedings affecting the business life and reputation of the defendant).
In Laing v Taylor Walton (A Firm) [2007] EWCA Civ 1146; [2008] B.L.R. 65, C had, in an earlier action, sued X, a business associate, to establish the true effect of agreements that had been made between them. There was a factual dispute about what exactly had been agreed orally that led to a later written agreement being made. The judge at the first trial rejected Mr Laing’s account of the disputed oral exchanges and accepted X’s account. C did not appeal that decision but commenced this action against D, a firm of solicitors, who, he alleged, had acted for him in preparing the writ- ten agreement. C contended that they had negligently failed to translate correctly what had been agreed orally into writing. D applied to strike out C’s claim as a collateral attack upon the decision in the C v X action which amounted to an abuse of process. In the Court of Appeal the C v D ac- tion was struck out as an abuse. Careless drafting, if proved, would not by itself establish any li- ability by D for C’s loss of the action against X. In order to win against D, C would have to prove (amongst other things) that the judge in C v X had wrongly rejected C’s evidence as to what had been agreed orally. Proof of that matter should have been raised by way of an appeal in the C v X action.
“[37] But such cases [negligence claims against legal practitioners] differ from the instant ap- peal in two important respects. Firstly, in the normal run of cases, the impugned conduct of the lawyer is independent of the factual conclusions of the court; those conclusions are only relevant to prove causation and loss. His case does not, in reality, involve any challenge to the findings or conclusion of the court. He merely contends that, in the light of the negligence of which he now complains, the court’s conclusions would have been different. But this is not so in the present case. As Buxton LJ has demonstrated (at paragraphs 19 and 27), the claimant cannot establish that his adviser’s drafting of the agreements was negligent without challeng- ing the judge’s findings as to credibility and fact. To make good the allegations of negligence, Mr Laing must show that his account of the agreements is the truth. He must demonstrate that His Honour Judge Thornton’s judgment of his credibility was wrong.
[38] Secondly, generally in actions against legal advisers arising out of litigation, the losing party’s allegations of negligence could not have been advanced in the case which he lost. They arise only after the case is concluded. But in the present case, the claimant had every opportunity during the course of the trial to raise, as he would have it, the inadequate drafting. ...” (Moses LJ).
“[25] I therefore conclude that it would bring the administration of justice into disrepute if Mr Laing were to be permitted in the second claim to advance exactly the same case as was tried and rejected by Judge Thornton. If Judge Thornton’s judgment was to be disturbed, the proper course was to appeal, rather than seek to have it in effect reversed by a court not of superior but of concurrent jurisdiction hearing the second claim. That the second claim is in substance an attempt to reverse Judge Thornton is important in the context of wider principles of finality of judgments. ...” (Buxton LJ).
In Arts & Antiques Ltd v Richards [2013] EWHC 3361 (Comm); [2014] P.N.L.R. 10, the earlier proceedings were taken against an insurer in respect of a claim made on a policy in respect of losses sustained in a robbery. The matter first proceeded by way of arbitration which resulted in a finding that C had failed to satisfy the requirements of a condition precedent in the policy (“CP2”). An attempt to appeal or set aside the award was dismissed by the court. C then brought proceed- ings against the brokers who had arranged the policy, arguing among other things that the condi- tion precedent had not validly been incorporated in the policy and that the brokers had fabricated a copy of the policy incorporating it. Hamblen J held that the second claim fell to be struck out as an abuse of process in so far as it rested on an argument that the condition precedent had not formed part of the policy.
“There is in this case no new evidence which casts doubt on the Arbitrator’s decision. ... That decision has sought to be challenged by appeal but the application has been dismissed on the basis that the decision is ‘not open to serious doubt’. For the issue to be relitigated in this court involves a collateral attack on the Arbitrator’s final and binding decision. Further, that decision relates to the terms of the contract as between A & A and Zurich, which have been determined in accordance with the agreed contractual machinery, namely by arbitration. In all the circumstances, I conclude that it would bring the administration of justice into disrepute, and would be oppressive and unfair on [the defendants], for A & A to be allowed to fight the issue of whether or not the contract contained CP2 all over again. It would ac- cordingly be an abuse of process” (Hamblen J at [46]).
In Allsop v Banner Jones Ltd [2021] EWCA Civ 7 (a claim against solicitors and counsel for professional negligence relating to a financial remedies order made against the claimant in matrimonial proceedings) the defendants sought, in respect of most of the allegations made against them, a strike out under r.3.4(2)(a) (because they disclosed no reasonable grounds for bringing the claim) or summary judgment under r.24.2 (because the claimant had no reasonable prospect of success as to them) and also a strike out under r.3.4(2)(b) as an abuse of process. The Court of Ap-
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peal ruled that, in such cases, the court should first address the applications under r.3.4(2)(a) and r.24.2 (the “not reasonably arguable” grounds); see [47(iii)]. Most of the claimant’s allegations survived the defendants’ applications at first instance. However a few were struck out as an abuse of the earlier financial remedies order on the basis that the claimant had not adduced fresh evidence which met the stringent test in Phosphate Sewage Company Ltd v Molleson (1879) 4 App. Cas. 801 (see para.3.4.11). The claimant’s appeal to the Court of Appeal succeeded as to three of the allegations disallowed on abuse grounds.
“... at least where the anterior proceedings are civil, Phosphate Sewage is of no application, and not to be used as a test for the purpose of determining whether the subsequent proceedings are abusive or otherwise” (Allsop at [44(v)]).
Properly understood, the allegations made against the defendants in Allsop did not amount to re- litigation and did not involve any attack upon the earlier decision made in the matrimonial proceedings.
“c) Thirdly, and relatedly, it is necessary to be very clear what is meant by ‘relitigation’. In my judgment, relitigation means arguing the same issue, that has already been determined in earlier proceedings, all over again in later proceedings. In civil proceedings, generally speak- ing, for an issue to be the same, it will arise as between the same parties (or their privies). That is why, in such cases, the doctrine of res judicata estoppel comes into play. The role of the doctrine of abuse of process is, correspondingly, much more limited. The abuse doctrine will only arise where one of the parties to the earlier litigation sues a stranger to that litigation. In such a case, the claim will typically be permissible and not abusive, and that will generally be because the case is not one of relitigation at all. Rather, the stranger to the earlier litigation will be the subject of the later claim because that person has done or failed to do something which (had that person behaved as he or she should) affected the terms or nature of the anterior decision. Why or how that earlier decision was affected will depend on the individual circumstances. It may be that the later claimant’s former legal advisers failed properly to prepare the case (see the example in Laing at [27] (Buxton LJ at paragraph 40 above) and [36] (Moses LJ at paragraph 41 above) or failed, in an appeal, to deploy or consider a potentially winning point (Walpole at paragraph 37 above). In all of these cases, what is being focussed on is “the impugned conduct of the lawyer [which is] independent of the...conclusions of the court” in the anterior decision (Laing at [37] (Moses LJ at paragraph 41 above)” ([44(iv)]; the preceding subparagraphs, a) and b), are quoted in para.3.4.9).
In Tinkler v Ferguson [2021] EWCA Civ 18; [2021] 4 W.L.R. 27, CA, the dispute related to a boardroom battle as a result of which C was dismissed as a director and D’s appointment as chairperson of the company was confirmed. C sued D and other directors for malicious prosecution. One week later the company sued C seeking a declaration that C had been validly dismissed. That action was tried first and the company was successful (Stobart Group Ltd v Tinkler [2019] EWHC 258 (Comm)). Nicklin J struck out the malicious prosecution claim as an abuse of process because it represented a collateral attack on key findings in Stobart Group Ltd and this decision was upheld by the Court of Appeal.
“In both sets of proceedings Mr Tinkler is making the same essential complaint about the same individuals. On the specific facts of this case, that amounts to a collateral attack on the previous findings. These features bring the case into the rare group where litigation is abusive although it is not formally between the same parties or their privies. I would reach this conclusion [even if there were any residual issues not directly covered by the judgment in Stobart Group Ltd because they] are of such small significance that they do not begin to justify the resources that would be necessary to resolve them, and I would despatch them under Jameel. Those residual issues are quintessentially part of ‘the give and take of business life’ and there is no proportionate way in which they could be determined ... the Court would have to rehear a great deal of similar evidence from the same witnesses. That would be manifestly unfair to the Respondents and an improper use of the court process. In boxing terms, the judges have scored the round and no good private or public interest is served by continuing the argument about a single punch.” (Peter Jackson LJ at [62]).
Abuse of process challenges are not limited to prohibiting attacks upon decisions made in courts. They can also be invoked to prohibit collateral attacks upon decisions made by industrial tribunals or administrative bodies such as the European Commission or the FSA (Kamoka v Security Service [2017] EWCA Civ 1665) or decisions made in arbitration proceedings (Michael Wilson & Partners Ltd v Sinclair [2017] EWCA Civ 3; [2017] 1 W.L.R. 2646).
“The touchstone for the application of the principle is not whether the earlier proceedings led to a final determination of a court of competent jurisdiction but whether the pursuit of the subsequent proceedings is manifestly unfair to a party to the litigation or would otherwise bring the administration of justice into disrepute” (Flaux LJ in Kamoka at [75]).
Challenges where the consolidation of or joint trial of linked cases was considered but reasonably rejected
In BTI 2014 LLC v PricewaterhouseCoopers LLP [2021] EWCA Civ 9, C sued D for professional negligence relating to auditing services D had carried out for a company (“A”) shortly before the transfers of funds from that company to its parent company (“S”). In respect of the same matters C
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and its parent company had already commenced proceedings against S and against the former directors of A. C attempted to have the two sets of claims tried together but D resisted that sugges- tion, as did S. C decided not to pursue an application for a joint trial, and the claim against D was stayed by consent pending the outcome of the other actions. They proceeded to trial before Rose J at which C failed totally. Although C obtained permission to appeal, no appeal was pursued because of fears as to the solvency of S. S did become insolvent and C’s parent company made no recoveries against S in respect of the multi-million pound award Rose J had made.
None of the issues raised in BTI 2014 LLC v PricewaterhouseCoopers LLP having previously been litigated between those parties, neither side was bound by any findings made by Rose J and the decisions she had made would not be admissible in evidence. However, D applied to strike out the claim on grounds of abuse (r.3.4(2)(b)) and on the grounds that the claim was not reasonably argu- able (applications under r.3.4(2)(a) and/or r.24.2). These applications were heard by Fancourt J who ruled that, in order for BTI to succeed, it would be necessary to show that Rose J’s decision as to an important matter was wrong. However, Fancourt J ruled that BTI’s claim was not an abuse of process which would bring the administration of justice into disrepute. As to the “not reasonably arguable” applications, Fancourt J rejected a submission that there was no possibility that BTI could adduce evidence which was materially different from the evidence Rose J had heard. D’s ap- peal to the Court of Appeal was dismissed.
“87. There is no question of the first limb of the Bairstow test applying, since PwC was not a party to the proceedings before Rose J, so that it cannot be said that relitigation of the same issues would be manifestly unfair to PwC or that it would vex or harass PwC for the issues to be relitigated. ...
88. It has not been suggested on behalf of PwC that BTI is pursuing these proceedings other than for the genuine purpose of seeking to recover the losses it has suffered, which it failed to recover in the first proceedings. Rather, what is contended is that, because the allegations made in these proceedings involve inviting a second judge to make findings which are contrary to those made by Rose J and thus involve a collateral attack on her judgment, the proceedings are an abuse of process; hence the considerable reliance placed by Mr Salzedo QC [for the appellant] on the decisions in Laing and Arts & Antiques [noted in para.3.4.12].
89. Despite the cogent and careful submissions advanced by Mr Salzedo QC both in opening the appeal and in reply, I am firmly of the view that the present proceedings, notwithstand- ing that they involve to a considerable extent relitigation of the same issues as decided by Rose J, do not bring the administration of justice into disrepute. My principal reason for reaching that conclusion is the procedural and case management history of the two sets of proceedings and the attempts by BTI to procure the agreement of both sets of defendants to a joint trial. I have set out that history in detail at [8] to [21] above, which I do not propose to repeat, but I would simply highlight a number of features of that procedural history which are striking and relevant.” (Flaux LJ; and see further [90]–[105]).
Pointless and wasteful litigation
Yet another form of abuse can arise in circumstances where it can be demonstrated that the benefit attainable by the claimant in the action is of such limited value that “the game is not worth the candle” and the costs of the litigation will be out of all proportion to the benefit to be achieved; see Jameel v Dow Jones and Co [2005] EWCA Civ 75; [2005] Q.B. 946; [2005] 2 W.L.R. 1614 (see below).
Jameel was a libel case but this form of abuse is not confined to such cases. However, as the cases below demonstrate, it has its limitations and the mere fact that a claim is small does not mean that it is abusive.
In Wallis v Valentine [2002] EWCA Civ 1034; [2003] E.M.L.R. 8, CA, a libel claim which arose out of a lengthy neighbour dispute was struck out as an abuse of process: in all the circumstances any damages recoverable if the claim succeeded would be nominal only and would be wholly disproportionate to the costs of the proceedings. The claim was being brought, not to vindicate a right, but to cause expense, harassment or commercial prejudice beyond that normally encountered in the course of properly conducted litigation. See para.3.4.9 below.
The Jameel case itself involved limited publication within the jurisdiction and limited damages. The claim was struck out as an abuse of process. Lord Phillips of Worth Matravers MR (as he then was) summarised the position as follows at [69]:
“If the claimant succeeds in this action and is awarded a small amount of damages, it can perhaps be said that he will have achieved vindication for the damage done to his reputation in this country, but both the damage and the vindication will be minimal. The cost of the exercise will have been out of all proportion to what has been achieved. The game will not merely not have been worth the candle, it will not have been worth the wick.”
At [54] he said:
“An abuse of process is of concern not merely to the parties but to the court. It is no longer
the role of the court simply to provide a level playing field and to referee whatever game the
parties choose to play upon it. The court is concerned to ensure that judicial and court
resources are appropriately and proportionately used in accordance with the requirements of
justice.”
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Lord Phillips said at [70]:
“It would be an abuse of process to continue to commit the resources of the English court,
including substantial judge and possibly jury time, to an action where so little is now seen to
be at stake. Normally where a small claim is brought, it will be dealt with by a proportionate
small claims procedure. Such a course is not available in an action for defamation where,
although the claim is small, the issues are complex and subject to special procedure under the
CPR.”
In Evans v Secretary of State for the Environment, Transport and the Regions [2006] EWHC 322 (QB), HH Judge Mackie QC (sitting as a judge of the High Court) having given summary judgment for the first defendant in respect of various heads of damage, struck out the balance of the claimant’s claim as an abuse of process. The second defendant (the MIB) had made an open offer to waive a costs order in its favour and the claimant’s remaining heads of damage amounted to less than this offer. The offer was still current at trial. The judge regarded the continuation of the claim as a pointless waste of time, costs and other resources.
The Jameel case was followed in the libel case of Kaschke v Gray [2010] EWHC 1907 (QB). However, in McLaughlin v Lambeth LBC [2010] EWHC 2726 (QB); [2011] E.M.L.R. 8; [2011] E.L.R. 57; [2011] H.R.L.R. 2, concerning two headteachers and chairman of school governors who brought a libel claim against the local authority responsible for the school, Tugendhat J, declined to strike out the case on the Jameel basis. Although the number of addressees of the emails complained of was small, they were all concerned with education and with the school. The judge took into account that the words complained of were in electronic form; they could be stored indefinitely, and easily searched and republished, both generally to those concerned with educa- tion, and in particular to others in the Department for Education or in the local authority defendant. The judge observed that although the damage incurred might or might not be small, the main point of defamation proceedings is vindication which included preventing or reducing the risk of future publications. The fact that the damage suffered so far may be small is no indica- tion of the extent of the damage which is prevented from occurring in the future, when a claimant in a libel action obtains a public retraction or a judgment in his favour from the court.
In Mama Group Ltd v Sinclair [2013] EWHC 2374 (QB); an application to strike out a libel claim was refused as there was a legitimate and proper purpose in pursuing the claim where the email complained of had been intended to cause damage (and the evidence suggested that damage was caused) and the claimant music festival organisers had a legitimate intention to vindicate their reputation. The wide publication of the email is to be noted.
In Ansari v Knowles [2013] EWCA Civ 1448; [2014] C.P. Rep. 9, the claimant, a university lecturer, sued in relation to the publication of a defamatory memo. The claim was settled against one of the defendants. The Court of Appeal refused to strike out the remaining claim as an abuse of process. Although the publication of the memo was limited to a few people, its nature and the identities of the people to whom it was communicated made it potentially very serious. On the question of whether, given the settlement against one defendant, it was futile to press on the Court of Appeal doubted whether it is appropriate for the court to have regard to the strength or weak- ness of the claimant’s case, except insofar as it can be seen without the need for any detailed enquiry to fall at one or other extreme of the spectrum. Moore-Bick LJ stated that an application of this kind should not be allowed to become a vehicle for an investigation into the merits of the claim. Unless it is obvious that the claim has very little prospect of success it should be taken at face value. Vos LJ stated that on an application to strike out a claim on the Jameel principle, where the question of abuse of process depends on whether the game is or is not “worth the candle”, it is not appropriate for the court to undertake any kind of mini-trial, based upon incomplete evidence, either as to liability or quantum.
In Adelson v Anderson [2011] EWHC 2497 (QB), after a slow start, a libel claim proceeded through allocation and standard disclosure but then largely went to sleep for some three years. Tugendhat J inferred from that delay, and from other evidence, that the claimant did not consider that the defamation alleged was particularly serious and also inferred that, at one stage, the claim- ant had ceased to have any intention to prosecute the matter to trial. The claim was struck out. As to the principle in Jameel, although the case had not been an abuse of the court’s process at the time of commencement, it had since become an abuse because the reputational interests subsequently at stake in the proceedings had ceased to be proportionate to the court time and the cost it would take to resolve the dispute. Strike out was also held to be appropriate applying the principle in Grovit v Doctor [1997] 1 W.L.R. 640 HL (as to which, see para.3.4.16).
The principles in Jameel and Grovit were also raised in Morrissey v McNicholas [2011] EWHC 2738 (QB) but, in that case, the strike out application was dismissed: despite a 19 month delay in the proceedings, the claim could still serve the legitimate purpose of protecting the claimant’s reputation and, because it accepted the claimant’s explanation for the delay, the court did not infer that the claimant had ceased to have an intention to progress the action to trial.
The Jameel case was considered by the Court of Appeal in Sullivan v Bristol Film Studios Ltd [2012] EWCA Civ 570; [2012] E.M.L.R 27; [2012] C.P. Rep. 34. Lewison LJ stated, obiter:
“The mere fact that a claim is small should not automatically result in the court refusing to hear it at all. If I am entitled to recover a debt of £50 I should, in principle, have access to justice to enable me to recover it if my debtor does not pay. It would be an affront to justice if
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my claim were simply struck out. The real question, to my mind, is whether in any particular case there is a proportionate procedure by which the merits of a claim can be investigated. In my judgment it is only if there is no proportionate procedure by which a claim can be adjudicated that it would be right to strike it out as an abuse of process.”
In Alsaifi v Trinity Mirror Plc [2018] EWHC 1954 (QB); [2019] E.M.L.R. 1 Nicklin J made a further comment upon the same example:
“The Court cannot strike out a claim for a £50 debt simply because, assessed against the costs of the claim, it is not ‘worth’ pursuing. Inherent in the value of any legitimate claim is the right to have a legal wrong redressed. The value of vindicating legal rights – as part of the rule of law – goes beyond the worth of the claim. The fair resolution of legal disputes benefits not only the individual litigants but society as a whole ([45]).”
In Mahtani v Sippy [2013] EWHC 285 (Ch); a claim in relation to the interpretation of a family arrangement for the division of an estate lacked utility and therefore was struck out as an abuse of process.
In Citation Plc v Ellis Whittam Ltd [2013] EWCA Civ 155, the Court of Appeal upheld the strik- ing out of a slander and malicious falsehood claim, for injunctive relief only, where there was no real risk of repetition and therefore no utility to the proceedings.
In Stanko Subotic v Ratko Knezevic [2013] EWHC 3011 (QB); and Karpov v Browder [2013] EWHC 3071 (QB), Jameel was applied and libel claims in which the claimants were unable to establish a substantial reputation in England and Wales, and therefore could not establish a real and substantial tort in the jurisdiction, were struck out as an abuse of process.
In Ames v Spamhaus Project Ltd [2015] EWHC 127 (QB); [2015] 1 W.L.R. 3409, Warby J refused to strike out a libel claim brought by a US resident on Jameel principles given that he had a real prospect of demonstrating that the publication within England and Wales might be read by people whose opinion was of serious consequence to him and his business prospects and that it had therefore caused serious harm to his reputation. The judge made the point that the assessment of whether a real and substantial tort had been committed was not a “numbers game”; even a publica- tion to a single individual could be highly damaging and make a substantial and costly libel action proportionate. Where a libel claimant had a real prospect of establishing a tort which was real and substantial, the court should be slow to find that it could not devise a proportionate means of try- ing the claim, and that the only way of dealing with it justly was to dismiss it. That was particularly so after the implementation of costs budgeting procedures to help the court perform the duty of dealing with cases justly and at proportionate cost.
The judge stated that Section 1 of the Defamation Act 2013 did not abolish the foregoing principles. It introduced a new requirement whereby there was no tort unless and until serious harm to the claimant’s reputation had either been caused or was likely to be caused by the publication. Accordingly, an assessment of whether a defamation claim in respect of a publication on or after 1 January 2014 should be dismissed on the ground that the actual or likely harm to reputation was too slight to justify the claim ought normally to start with consideration of the seri- ous harm requirements in s.1 of the 2013 Act. The question was whether one of those require- ments was satisfied or had a real prospect of being, satisfied. If the answer was no, then there was no tort and the claim would be dismissed. If the answer was yes, then it might be hard for a defendant to establish that the alleged tort failed the “real and substantial tort” test. The factors relevant to the question of whether serious harm had been caused or was likely were the same as those which came into play in assessing whether a tort was real and substantial for Jameel purposes.
In Ames Warby J provided guidance as to the appropriate procedure to adopt: issues as to (i) seri- ous harm and (ii) Jameel abuse were best resolved as preliminary issues together with (iii) any disputes as to meaning. This guidance was subsequently followed in Lachaux v Independent Print Ltd [2015] EWHC 915 (QB) (Nicola Davies J). Defendants should consider carefully whether to seek the dismissal of an action for Jameel abuse when the proceedings are at an early stage and have not reached the conclusion of statements of case (Ward v Associated Newspapers Ltd [2020] EWHC 2797 (QB) at [62]).
In Lilley v DMG Events Ltd [2014] EWHC 610 (IPEC); Jameel was applied. A claim for copyright infringement was struck out where the holder of intellectual property rights had adopted the wrong approach to calculating the damages to which they would be entitled were their claim for infringement be successful. They were unable to show that they would be entitled to more than about £83, and allocating court resources to such a claim would amount to an abuse of process.
In Sobrinho v Impresa Publishing SA [2016] EWHC 66 (QB); [2016] E.M.L.R. 12, Dingemans J, it was held that although the meaning of the words complained of in a newspaper article, which was the subject of libel proceedings brought by an international banker against a Portuguese publishing company, implied illegality on the part of the banker, publication of the article had not caused seri- ous harm to the banker’s reputation in England and Wales. The claimant’s reputation had been so effectively restored by the reporting of his and other evidence to a Parliamentary inquiry in Portugal that the pursuit of the instant proceedings was “not worth the candle” and was an abuse of process, Jameel applied.
Improper collateral purpose
It is an abuse of process to pursue a claim for an improper collateral purpose. However, what is an improper collateral purpose is not easy to define and few cases have been struck out solely on this basis.
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In Goldsmith v Sperrings Ltd [1977] 1 W.L.R. 478 CA; Bridge LJ said:
“... when a litigant sues to redress a grievance no object which he may seek to obtain can be
condemned as a collateral advantage if it is reasonably related to the provision of some form
of redress for that grievance. On the other hand, if it can be shown that a litigant is pursuing
an ulterior purpose unrelated to the subject matter of the litigation and that, but for his
ulterior purpose, he would not have commenced proceedings at all, that is an abuse of
process. These two cases are plain; but there is, I think, a difficult area in between.”
A litigant with a genuine cause of action, which he would wish to pursue in any event, would not be debarred (by stay or striking out) from proceeding because he had an ulterior purpose in mind as a desired by-product of the litigation.
In Wallis v Valentine [2002] EWCA Civ 1034; [2003] E.M.L.R. 8, CA, (see 3.4.14 above) the court approved the dicta of Simon Brown LJ in Broxton v McClelland [1995] E.M.L.R. 485 to the effect that the institution of proceedings with an ulterior motive is not of itself enough to constitute an abuse. An action is only that if the court’s processes are being misused to achieve something not properly available to the plaintiff in the course of properly conducted proceedings. The cases sug- gest two distinct categories of such misuse of process: [1] the achievement of a collateral advantage beyond the proper scope of the action; and [2] the conduct of the proceedings themselves (includ- ing the initiation of the claim itself) is not so as to vindicate a right but rather in a manner designed to cause the defendant problems of expense, harassment, commercial prejudice or the like beyond those ordinarily encountered in the course of properly conducted litigation. Only in the most clear and obvious case will it be appropriate upon preliminary application to strike out proceedings as an abuse of process so as to prevent a plaintiff from bringing an apparently proper cause of action to trial. At the interlocutory stage, the test is an objective one (and see also, JSC BTA Bank v Ablyazov [2011] EWHC 1136 (Comm); [2011] 1 W.L.R. 2996).
In Cowley v LW Carlisle & Co Ltd [2020] EWCA Civ 227, the claimant’s solicitors obtained the is- sue of a claim form naming four defendants, one of which was a non-existent company (“LWC”). Over four months later, before any application had been made to restore LWC to the register of companies, an insurer filed an acknowledgment of service purportedly on behalf of LWC and ap- plied to strike out the claim against it. By the time of the hearing of that application no progress had been made as to the restoration of LWC and the claim against it was struck out. The district judge had been entitled to strike out that part of the claim in order to exercise his case manage- ment powers as to the progress of the proceedings in respect of the other named defendants.
Delay
Rule 3.4(2)(b) is not strictly relevant where the complaint is one of delay rather than a complaint as to the form or content of a statement of case (Western Trust & Savings Ltd v Acland & Lensam (A Firm) [2000] L.T.L. 19 June 2000, QB). However, in Habib Bank Ltd v Jaffer (Gulzar Haider) [2000] C.P.L.R. 438, CA, a claim was struck out where delays were caused by a claimant acting in wholesale disregard of the norms of conducting serious litigation and doing so with full awareness of the consequences (cf. Grovit v Doctor [1997] 1 W.L.R. 640; [1997] 2 All E.R. 417, HL, noted in para.3.4.20 below). Delay, even a long delay, cannot by itself be categorised as an abuse of process without there being some additional factor which transforms the delay into an abuse (Icebird Ltd v Winegardner [2009] UKPC 24).
The principles in Grovit and Icebird were considered and applied in Adelson v Anderson [2011] EWHC 2497 (QB), as to which, see para.3.4.14, above.
In Hall v Ministry of Defence [2013] EWHC 4092 (QB) (a personal injury claim) an application for an extension of time for service of the claim form was dismissed, the action was struck out ac- cordingly and the claimant was ordered to pay costs including £3,000 on account. Some months later the claimant commenced a second action without first paying the sum ordered on account. Phillips J held (i) that the conduct of the first action had not been so wrongfully delayed as to make the issue of the second action an abuse, and (ii) that the conduct of the second action had not been rendered an abuse by the further months of delay which had occurred or by the failure to pay £3,000 on account (the Defendant’s remedy here being to seek a stay pending payment or to take steps to enforce the order).
In Wearn v HNH International Holdings Ltd [2014] EWHC 3542 (Ch), Barling J, the case was struck out under CPR r.3.4(2)(b) and r.3.4(2)(c) for delay and non-compliance with court orders. The claim had been ongoing for almost 14 years and the claimant was largely responsible for the delay. The court recognised that the guiding principle was that delay alone, even if it was inordinate and inexcusable, could not be an abuse of process. However, abuse of process might arise when delay was combined with some other relevant factor; Grovit v Doctor [1997] 1 W.L.R. 640, HL, applied. In the instant case the delay was an abuse of process as the claimant acted with wholesale disregard for court orders. A further aggravating factor was that the claimant had also sought to rely upon expert evidence which was clearly inconsistent with the requirements of CPR Pt 35 in significant respects. Allowing the expert to carry out unnecessary investigations also added consider- ably to the delay. For the matter to reach trial would require substantial further expenditure and the passage of time meant that the prospect of a fair trial was severely impaired.
Issuing and maintaining proceedings with no real intention of carrying them through to trial (“warehousing”) may amount to an abuse but the court should always examine all the circumstances,
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including the length of the delay, the degree of the claimant’s responsibility for it and the reasons given for it. In Asturion Fondation v Alibrahim [2020] EWCA Civ 32 at [61]–[64], the Court of Ap- peal having reviewed the authorities stated that the question whether “warehousing” amounted to an abuse of process depended on the reason why they had not been pursued actively and the strength of that reason, which was to be assessed objectively and with regard to the length of delay. It further held that where an application to strike out a claim that had been “warehoused” as an abuse of process required the court: first, to determine whether the claimant’s conduct was an abuse of process; and, if so, whether the discretion to strike out should be exercised.
A failure to progress a claim expeditiously following the grant of an interim injunction may well be found to be an abuse of process (Havering LBC v Persons Unknown [2021] EWHC 2648 (QB)).
In Alfozan v Quastel Midgen LLP [2022] EWHC 66 (Comm), HH Judge Pearce (sitting as a High Court judge) ruled that evidence of very long periods of procedural inactivity by the claimant often gives rise to an inference that the claimant has no real intention of progressing the claim; however, that inference can be rebutted if there is a satisfactory explanation for the delay ([41]). Although proof that the defendant has “let sleeping dogs lie” does not by itself prevent a striking out if the claimant is in fact guilty of warehousing the claim, it may prevent the court from draw- ing an inference of guilt ([39]). Proof that the defendant has not been prejudiced by the delay does not excuse the claimant but may sometimes make the sanction of strike out disproportionate ([18]).
Other forms of abuse
Most of the cases noted in paras 3.4.4 to 3.4.16 deal with particular instances of a fundamental principle that the court will not allow its process to be abused (and see also paras 3.1.17 to 3.1.17.6; the limits on the court’s power to vary or revoke orders; and paras 3.11.1 to 3.11.7 concerning the court’s powers to make civil restraint orders). The court’s objectives in all of these topics are to counteract any deliberate or incorrigible behaviour which would otherwise cause injustice and to protect litigants and also the court itself from the unnecessary waste and delay that such behaviour may cause.
Proceedings can be struck out as an abuse of process even if there has been no unlawful conduct, no breach of relevant procedural rules, no collateral attack on a previous decision and no dishonesty or other reprehensible conduct (JSC VTB Bank v Skurikhin [2020] EWCA Civ 1337 at [51]; Cable v Liverpool Victoria Insurance Co Ltd [2020] EWCA Civ 1015; [2020] 4 W.L.R. 110 noted in para.3.4.18, breach of a pre-action protocol may amount to an abuse of process). As to whether a deliberate underpayment of the court fee is payable on the issue of a claim, see the conflicting decisions in Lewis v Ward Hadaway (A Firm) [2015] EWHC 3503 (Ch); [2016] 4 W.L.R. 6 and Atha & Co Solicitors v Liddle [2018] EWHC 1751 (QB); [2018] 1 W.L.R. 4953. (In Hayes v Butters [2021] EWCA Civ 252; [2021] 1 W.L.R. 2886 Peter Jackson LJ expressed a provisional view against the disallowance of a claim on limitation grounds because of an inadvertent miscalculation of a court fee ([24]). In Citysprint UK Ltd v Barts Health NHS Trust [2021] EWHC 2618 (TCC), Fraser J ruled that an inadvertent underpayment of a court fee at the time issue of a claim form did not, in that case, invalidate the issue of the claim form. It was a minor mistake which was corrected administratively (shortly after the steps taken to serve the claim form had been taken ([7], and see further, para.3.10.4)).
A decision made by a trial court that part of a claim is dishonest or fraudulent is unlikely to lead to a striking out of the whole claim under r.3.4(2) or under the inherent jurisdiction if the court can still make a proper assessment of both liability and quantum. The draconian step of striking a claim out is always a last resort. Instead the trial court can ensure that the dishonesty does not increase the award of damages and can make orders penalising the claimant in costs, interest and by way of proceedings for contempt and criminal proceedings, it being open to a judge to refer the case to the CPS or DPP (Summers v Fairclough Homes Ltd [2012] UKSC 26; [2012] 1 W.L.R. 2004; the Supreme Court’s ruling in this case was subsequently negatived by Parliament in respect of personal injury claims: the Criminal Justice and Courts Act 2015 s.57, as to which see para.16.5.2 and Vol.2 para.3F-32.3).
Cases on forms of abuse falling outside the preceding paragraphs of this commentary are legion. Many are briefly summarised below. However it is not appropriate to treat these cases as set- tled precedents. Decisions as to abuse are extremely fact-sensitive. Whilst the circumstances of a particular case may, at first sight, raise an appearance of abuse, appearances can be deceptive. There is a two-stage test. First the court has to determine whether the claimant’s conduct was an abuse of process. Secondly, if it was, the court has to exercise its discretion as to whether or not to strike out the claim (Cable v Liverpool Victoria Insurance Co Ltd [2020] EWCA Civ 1015; [2020] 4 W.L.R. 110 at [63]). It is at the second stage that a balancing exercise, and considerations of proportionality, become relevant. The court must engage in a close “merits based” analysis of all the facts.
“This will take into account the private and public interests involved, and will focus on the crucial question: whether in all the circumstances a party is abusing or misusing the court’s process” (Michael Wilson & Partners Ltd v Sinclair [2017] EWCA Civ 3; [2017] 1 W.L.R. 2646 at [48(3)] citing two earlier judgments).
In each of the following cases a claim was struck out as an abuse.
D Carter Commercial Developments v Bedford BC [2001] EWHC Admin 669; [2001] 34 E.G. 99
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3.4.18
In Municipio De Mariana v BHP Group Plc (UK) Ltd [2022] EWCA Civ 951 the Court of Appeal reversed an order striking out a group action relating to a dam failure in Brazil which had been commenced on behalf of many thousands of individuals and organisations against companies al- leged to be indirect polluters. Similar proceedings involving many of these claimants were already on foot in Brazil against companies alleged to be direct polluters and some high-value judgments had been obtained and some compensation had been paid out to some claimants. At first instance Turner J had ruled that the enormous overlap of issues raised in both sets of proceedings rendered the proceedings in England irredeemably unmanageable and were an abuse in that they amounted to a use of the court process for a purpose or in a way which is significantly different from the ordinary and proper use of the court process (see the quotation from Attorney General v Barker [2000] 1 F.L.R 759, DC set out in para.3.4.3). However, allowing the claimants’ appeal, the Court of Appeal ruled that the mere fact that the litigation would place a significant burden on the courts could not be an independent basis for a finding of abuse ([184]). Even if the proceedings were unmanageable due to complications arising out of parallel proceedings in Brazil, or because of other procedural complexities, that would not mean that the court process was being misused, whether vexatiously, oppressively or otherwise ([185]) unless, for example, the claimants had deliberately made the litigation unmanageable with vexatious consequences for the defendants ([187]). In any event the Court of Appeal also ruled against the learned judge’s finding that the proceedings in this case were irredeemably unmanageable; no such conclusion could be reached safely at such an early stage of the proceedings ([188]).
Rule 3.4(2)(c): Failure to comply with a rule, practice direction or court order
Rule 3.4(2)(c) gives the court an unqualified discretion to strike out a claim or defence where a party has failed to comply with a rule, practice direction or court order. In Nomura International Plc v Granada Group Ltd [2007] EWHC 642 (Comm) (noted in para.3.4.3, above and para.16.2.1, below) a failure to comply with r.16.2 led to the striking out of the claim form; this was held to be the only appropriate sanction because, on the facts, the very commencement of proceedings amounted to an abuse of process.
In Walsham Chalet Park Ltd v Tallington Lakes Ltd [2014] EWCA Civ 1607, the Court of Appeal held that, in exercising its discretion under r.3.4(2)(c), the court is entitled to have regard to the Mitchell/Denton principles (which apply to applications under r.3.9, as to which, see para.3.9.2). However, in that case, the Court of Appeal stressed that the ultimate question for the court in deciding whether to impose the sanction of strike-out is materially different from that in deciding whether to grant relief from a sanction that has already been imposed. In a strike-out application under r.3.4 the proportionality of the sanction itself is in issue, whereas an application under r.3.9 for relief from sanction has to proceed on the basis that the sanction was properly imposed (and see further, para.3.4.1, above).
In Bot v Barnick [2019] 12 WLUK 371; LTL 20/12/2019 (Yip J, QBD) a medical negligence claim, the claimant failed to serve any expert evidence against the first defendant even though three years had elapsed since the issue of the claim, directions for expert evidence had been given
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(C.S.), attempting to bring a Part 8 claim instead of judicial review proceedings in order to avoid the time limits applicable to judicial review (and see Clark v University of Lincolnshire and Humberside [2000] 1 W.L.R. 1988, CA, obiter).
D Ashraf v Secretary of State for the Home Department [2013] EWHC 4028 (Admin) including an unmeritorious unlawful detention claim in judicial review proceedings solely to avoid a transfer from the Administrative Court to the Upper Tribunal.
D Nomura International Plc v Granada Group Ltd [2007] EWHC 642 (Comm); [2008] Bus. L.R. 1, issuing a claim for an illegitimate benefit, namely the prevention of further time run- ning under the Limitation Acts for a claim C could not properly identify or plead.
D Pickthall v Hill Dickinson LLP [2009] EWCA Civ 543; [2009] P.N.L.R. 31, issue of a claim by a bankrupt knowing he lacked title to do so but hoping would be assigned to him later (for contrary cases where no actual knowledge was proved, see Pathania v Adedeji [2014] EWCA Civ 681 and Munday v Hilburn [2014] EWHC 4496 (Ch); [2015] B.P.I.R. 684).
D Towler v Wills [2010] EWHC 1209 (Comm) serving particulars of claim which are so badly drafted that they fail to reveal to the defendant, or to the court, the case the defendant can expect to meet at trial in circumstances showing that even after attempting amendments, C is unable to put forward a coherently pleaded and intelligible claim (but note, (i) the word “obstruct” in r.3.4(2)(b) means “impede to a high extent” and thus the court will not strike out a statement of case merely because it raises some irrelevant issues or otherwise gener- ates some untidiness in the pleadings (Atos Consulting Ltd v Avis Europe Plc [2005] EWHC 982 (TCC)); and (ii) the importance of giving C an opportunity to amend a defective claim (Kim v Park [2011] EWHC 1781 (QB)).
D Tchenguiz v Grant Thornton UK LLP [2015] EWHC 405 (Comm); [2015] 1 All E.R. (Comm) 961, particulars of claim which, at 94 pages, failed to comply with the principles set out in the Admiralty and Commercial Court Guide (which states that statements of case must be no longer than 25 pages unless the court has given permission for a longer document); Leggatt J struck out the particulars of claim, disallowed the costs of drafting them and ordered fresh compliant particulars of claim to be served.
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and several extensions for its service had been granted. There was no information before the court to suggest that the expert evidence was likely to be forthcoming in the near future. A claim against a professional could not be maintained without expert evidence to support it and the first defend- ant should not have to wait indefinitely to see the case against him. It was appropriate to strike out the claim against the first defendant under r.3.4(2)(c) on the basis of the claimant’s failures to comply with orders even though none of them had included an unless order.
In many cases there may be alternatives to a strike out which may be more appropriate: awarding costs on the indemnity basis payable forthwith, ordering a party to pay money into to court and awarding interest at a higher or lower rate (Biguzzi v Rank Leisure Plc [1999] 1 W.L.R. 1926, CA; and see also Summers v Fairclough Homes Ltd [2012] UKSC 26; [2012] 1 W.L.R. 2004, noted in para.3.4.17). In Candy v Holyoake [2017] EWHC 373 (QB), Warby J held that, although the defend- ants had been in serious breach of their obligations under a consent order made for disclosure, and there was no good reason for the failures, it was not a just and proportionate response to strike out their defences. The admitted faults and the gravity of their failures could be reflected in costs orders. It was not suggested that the admitted defaults had prevented the possibility of a fair trial.
In Mark v Universal Coatings & Services Ltd [2018] EWHC 3206 (QB); [2019] 1 W.L.R. 2376, a personal injury claim, the claimant’s particulars of claim were served in time but, in breach of PD 16 paras 4.2 and 4.3, they were not served with a schedule of loss and a medical report. These documents were served separately some 11–12 weeks later (see at [36]). More than 13 weeks later (see [21] and [33]) the defendants successfully applied to the court for an order striking out the claim. Allowing the claimant’s appeal against that order, Spencer J held that a failure to comply with PD 16 paras 4.2 and 4.3 does not give rise to an implied sanction of strike out (see further para.3.9.15). Instead, if it is appropriate to do so, an aggrieved defendant can apply to the court for an order requiring the claimant to remedy the breach ([49]).
Where liability is not in issue, it is no longer necessary for the court to make an “all or nothing order” on a strike out application if it would be unjust to do so: instead, the court should take a careful look at all of the relevant circumstances and weigh up carefully the order that it considered it would be just to make on the facts before it: for example, restrictions may be placed upon the claimant’s right to claim interest and special damages accruing during the period of delay; the claim could be allowed to proceed to trial on the basis that the judge will assess compensation which would have been payable to the claimant had the trial not suffered delay (Walsh v Misseldine [2000] L.T.L. 18 May, CA).
In Cable v Liverpool Victoria Insurance Co Ltd [2020] EWCA Civ 1015; [2020] 4 W.L.R. 110, a personal injury claim in which liability was admitted, C’s solicitors commenced proceedings in circumstances amounting to an abuse of the relevant pre-action protocol and which led to years of delay and expense for D. Eventually C obtained, without notice to D, an order giving directions for the future conduct of the claim, which order C failed to serve on D until after the date specified in the order. The Court of Appeal held that, despite the abuse of process, it was inappropriate to strike out the claim and, as to the late service, held that C should be granted relief from sanctions under r.3.9 (as to which, see paras 3.9.3 and 3.9.15). C was ordered to pay D’s costs on the indemnity basis and it was ordered that C was disentitled to interest on special damages for the period up to the date upon which D’s application to strike out was first heard. A further order was also made in respect of the costs of the appeal.
Striking out a statement of case because of a litigant’s failure to comply with a court order for the payment of a sum of money which is beyond their means to pay may amount to a breach of the ECHR art.6(1) right of access to a court (cf. Ford v Labrador [2003] UKPC 41; [2003] 1 W.L.R. 2082. However, in Oil & Minerals Development Corp v Sajjad [2002] All E.R. (D) 319 (Apr) (Gibbs J), the defendants were ordered to pay the costs of interlocutory proceedings and failed to comply with an order for payment on account of those costs; holding that there was no possible or credible excuse for that failure, Gibbs J fixed further dates for payment on terms that, in default the defence would be struck out (see also Crystal Decisions (UK) Ltd v Vedatech Corp [2006] EWHC 3500 (Ch), Patten J and Ogiehor v Belinfantie [2018] EWCA Civ 2423 noted in para.3.1.14).
In Hayden v Charlton [2010] EWHC 3144 (QB), Sharp J, claims for libel brought by claimants, who had legal representation, against litigants in person were struck out under r.3.4(2)(c) as there had been deliberate and wholesale non compliance with the rules and orders of the court by the claimants which resulted in a serious delay to the progress of the claims including the loss of a trial window. The claimants had not been subject to any “unless” order but this was not regarded as a bar to striking out the claims. In considering whether it would be appropriate to strike out the claims, the judge took into account that this had implications for the claimant’s rights pursuant to art.6(1) of the ECHR. However the judge cited Hale LJ (as she then was) who said in Khilili v Ben- nett [2000] E.M.L.R. 996 at [50]:
“National laws are entitled to regulate their domestic procedures, and this includes prescrib- ing timetables and steps which have to be taken within a limited period. If a claimant has not complied with those rules, then normally he will not be able to complain under Article 6.”
On appeal in Hayden [2011] EWCA Civ 791, no criticism was made of the judgment at first instance. However, the claimants were permitted to adduce fresh evidence that they had not been kept informed by their then solicitors and that they had not known the true position until after the strike out had been ordered. The Court of Appeal accepted that evidence as an important factor in
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favour of granting relief. However, it also took into account other factors, including the consider- able burden the proceedings had placed upon the defendants, who were litigants in person. That hardship would have no remedy if relief was granted whereas the claimants would have an op- portunity for redress against their former solicitors if the appeal was refused. Overall, it was held that the less unfair result was for the claim to stay struck out.
In Maqsood v Mahmood [2012] EWCA Civ 251, the Court of Appeal held that the judge had been justified in striking out the claim under r.3.4(2)(c) given the failure of the claimant to comply with court orders relating to specific disclosure, exchange of witness statements and delivery of trial bundles. The claimant should have been ready for trial but attended before the judge seeking an adjournment which had been rightly refused. Given the claimant’s hopeless position following the refusal of the adjournment, his case was doomed to be dismissed. The Court of Appeal made the point that the right to a fair trial was a right enjoyed by defendants as well as claimants.
In Adams v Ford [2012] EWCA Civ 544; [2012] 1 W.L.R. 3211, solicitors sent letters to a large number of potential claimants offering to represent them in a group litigation claim about to be commenced on their behalf. Later, at a time when the limitation period was possibly about to expire, a claim form was issued naming 273 claimants even though some of them had not by then replied to the solicitors who therefore had no means of knowing whether they would wish to join in the proceedings. The claim form contained a statement of truth signed by a solicitor which stated that the claimants “believe that the facts stated in this claim form are true” and that the solicitor was “duly authorised by the claimants to sign this statement”. The claim form was later amended, prior to its service, to reduce the number of claimants to 170. Steele J held that the state- ment of truth (given on behalf of 273 persons) was false but that, in all the circumstances it would be disproportionate to strike out the claim form and the defendants’ appeal to the Court of Appeal was dismissed. Commencing proceedings without the authority of all the claimants was not neces- sarily an abuse; after the claim form had been issued some of the claimants who had been joined without their permission had ratified the solicitors’ act and thereby adopted the proceedings (Presentaciones Musicales SA v Secunda [1994] Ch. 271, CA, applied; and see further, para.3.4.16, above). The false statement and a subsequent lack of candour when questioned about it, together amounted to a serious shortcoming which the court would not condone. (As to the statements of truth the solicitor should have given, see [54] to [59].) However, it would have been disproportion- ate and contrary to justice for the amended claim form to be struck out, even if that strike out was limited to those claimants who had ratified the wrongful act.
Striking out sanction effective without need for further order (“unless” orders)
Rule 3.1(3) states that, when the court makes an order, it may (a) make it subject to conditions, and (b) specify the consequence of failure to comply with the order or a condition. This provision and r.3.4(2)(c) (when put together) confirm that the court may make a conditional order in the form of an order stating that, unless by a particular date a party complies with a procedural order made by the court (e.g. a disclosure order, or an order to give security for costs), their statement of claim shall be struck out and their claim dismissed. (The existence of such power is assumed in r.3.5 and r.3.8, see further below.) The consequence (i.e. the striking out and dismissal sanctions) follows automatically upon the party’s failure to comply with the condition, without any further order of the court. In PD 3A (Striking Out a Statement of Case) (supplementing r.3.4) it is stated in para.1.9 (inserted in October 2005) that, where an order (or a rule or a practice direction) states that a statement of case shall be struck out or will be struck out or dismissed, this means that the striking out or dismissal “will be automatic and that no further order of the court will be required” (see para.3APD.1). Obviously, the automatic imposing of the striking out and dismissal sanction can have very serious consequences for the defaulting party. In Marcan Shipping (London) Ltd v Kefalas [2007] EWCA Civ 463; [2007] 1 W.L.R. 1864; [2007] 3 All E.R. 365, CA, the Court of Ap- peal stressed that, in making a conditional (or “unless”) order containing such sanction, a judge should consider carefully whether that sanction is appropriate in all the circumstances of the case.
Where an unless order has had this effect, the court retains jurisdiction to grant the defaulting party relief (usually in the form of an extension of time for complying) if that party makes an ap- plication under r.3.8 (in which event the court will consider all the circumstances, in particular, those listed in r.3.9). (The importance of maintaining the distinction between the effect of the order itself and the exercise of the court’s jurisdiction to grant relief was stressed in the Marcan Shipping case.)
Further, where an unless order has had this effect, the defaulting party’s opponent may obtain judgment by complying with r.3.5. In such event, (a) in the circumstances provided for by r.3.5(2), the party against whom the claim was made may obtain judgment by filing a request for judgment, but (b) otherwise they must make an application in accordance with Pt 23 if they wish to obtain judgment under r.3.5 (see r.3.5(5)). In the Marcan Shipping case the Court of Appeal held that, at the hearing of such an application, (a) the court’s function is limited to deciding what order should properly be made to reflect the sanction which has already taken effect, and (b) the operation of the sanction does not lie in the discretion of the court, as it is only if there is an application under r.3.8 by the defaulting party that the court is required to consider whether, in all the circumstances, it is just to make an order granting relief from the sanction automatically imposed.
The Marcan Shipping case was cited in Kinsley v Commissioner of Police of the Metropolis [2010] EWCA Civ 953; see further under r.3.9.
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In Workman v Forrester [2017] EWCA Civ 73, the claimants had obtained a default judgment for damages to be assessed and also an order for disclosure of documents. Because the defendant persistently failed to comply with the disclosure order, the district judge made a further order that, unless the previous order was complied with, there would be judgment for the sum of £1,503,579.50, plus interest and costs. The defendant’s appeal against that order was upheld by the circuit judge and by the Court of Appeal. Although such an order was more onerous than the usual order (an unless order under which the defendant might be debarred from defending the as- sessment of damages) it was justified given that the defendant’s failure to comply with the disclosure order had been calculated to frustrate proceedings to his own advantage.
Inherent jurisdiction to strike out
In addition to the power under r.3.4, the court has an inherent jurisdiction to strike out any documents or strike out, dismiss or stay any proceedings which amount to an abuse of the court’s process (as to which, see para.3.4.3 above). This jurisdiction is preserved by r.3.1(1) and r.3.4(5). It duplicates but is not limited to the express powers to strike out which are conferred by r.3.4(2). The undoubted jurisdiction of the court to strike out material in a witness statement which was both scandalous and irrelevant should only be exercised sparingly (Sandhurst Holdings Ltd v Grosvenor As- sets Ltd [2001] L.T.L. 25/10/01, Ch D).
Where proceedings have been dismissed with costs it is an abuse for an assignee of the claimant to commence or continue fresh proceedings in respect of the same matter without paying the costs previously awarded against the assignor (Investment Invoice Financing Ltd v Limehouse Board Mills Ltd [2006] EWCA Civ 9; [2006] 1 W.L.R. 985, CA; and see further, para.3.4.23).
The court may strike out vexatious applications in an action and may, in addition, make an order prohibiting further applications being made without the court’s permission. However, such powers will now be exercised under r.3.11.
For a claimant to commence or continue litigation with no intention of bringing it to a conclu- sion can amount to an abuse (Grovit v Doctor [1997] 1 W.L.R. 640, HL; cf. Habib Bank Ltd v Jaffer (Gulzar Haider) [2000] C.P.L.R. 438, CA, noted in para.3.4.3 above).
The court may strike out a claim where the claimant was guilty of conduct which put the fair- ness of any trial in jeopardy, or which was such as to render further proceedings unsatisfactory and prevent the court from doing justice (cf. Arrow Nominees Inc v Blackledge [2000] C.P. Rep. 59; [2000] 2 B.C.L.C. 167, Ch D reversed on the facts, The Times, 7 July 2000, CA)
It is an abuse of process for a defendant to appeal against the refusal of an adjournment in circumstances in which they also have the opportunity to apply under r.39.3(3) (application for a judgment or order to be set aside made by a party who failed to attend the trial): Tennero Ltd v Arnold [2006] EWHC 1530, QB.
In Nolan v Devonport [2006] EWHC 2025 (QB), an application to set aside a default judgment was struck out on the ground that the defendant had unreasonably delayed the application until the claimant had commenced proceedings for a charging order by way of enforcement; by not mak- ing her set aside application expeditiously the defendant had failed in her duty to help the court to further the overriding objective. In striking out the application HH Judge Grenfell, sitting as a judge of the High Court, placed reliance upon r.3.1(2)(m) rather than upon the inherent jurisdic- tion; r.3.1(2)(m) enables the court to make any “order for the purpose of managing the case and furthering the overriding objective”.
Overlap with Pt 24 (summary judgment)
The rules give the court two distinct powers which may be used to achieve the summary disposal of issues which do not need full investigation at trial. Rule 3.4 enables the court to strike out the whole or part of a statement of case which discloses no reasonable grounds for bringing or defend- ing a claim (r.3.4(2)(a)), or which is an abuse of the process of the court or otherwise likely to obstruct the just disposal of the proceedings (r.3.4(2)(b)). Rule 24.2 enables the court to give sum- mary judgment against a claimant or defendant where that party has no real prospect of succeed- ing on their claim or defence. Both those powers may be exercised on an application by a party or on the court’s own initiative; see para.1.2 of the PD (Striking Out a Statement of Case). Many cases fall within both r.3.4 and Pt 24 and it is often appropriate for a party to combine a striking out ap- plication with an application for summary judgment. Indeed, the court may treat an application under r.3.4(2)(a) as if it was an application under Pt 24; Moroney v Anglo-European College of Chiropractice [2009] EWCA Civ 1560; and see, Taylor v Midland Bank Trust Co Ltd (No.2) [2002] W.T.L.R 95. However, in Ministry of Defence v AB [2010] EWCA Civ 1317; [2011] 117 B.M.L.R. 101, summary judgment sought in respect of test cases in group litigation was refused on procedural grounds: in the circumstances of that case, an informal application for summary judgment in the course of a strike out application was held to be unfair. (This point was not raised in the further appeal in this case; see AB v Ministry of Defence [2012] UKSC 9; [2012] 2 W.L.R. 643; [2012] 3 All E.R. 673.) Similarly in St Clair v King [2018] EWHC 682 (Ch) an appeal was allowed in respect of an order granting summary judgment made on an application to strike out; the hearing had been unfair to the claimant because she had not been given the 14-day notice period which is stipulated for a summary judgment application and the consequences of allowing the application to proceed as one for summary judgment had not been properly or fairly explained to her (and see also Saeed v Ibrahim [2018] EWHC 3 (Ch) at [7]–[9] (Chief Master Marsh)).
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3.4.21
CPR 3
3.4.22
A party may believe that they can show without a trial that an opponent’s case has no real prospect of success on the facts, or that the case is bound to succeed or fail, as the case may be, because of a point of law (including the construction of a document). In such a case the party concerned may make an application under r.3.4 or Pt 24 (or both) as they think appropriate; see para.1.7 PD (Striking Out a Statement of Case), para.3APD.1.
However, the overlap between r.3.4 and Pt 24 is not complete:
-
(1) unlike Pt 24, r.3.4 also applies to cases of non-compliance with a rule, practice direction or
court order;
-
(2) unlike r.3.4, Pt 24 also applies to the summary disposal of issues including preliminary is-
sues;
-
(3) there are various procedural requirements in Pt 24 which do not apply to r.3.4;
-
(4) unlike Pt 24, r.3.4 applies to all proceeding. Thus, an order akin to summary judgment
may be obtained under r.3.4 in proceedings which are excluded from Pt 24 (Shephard v Wheeler Times, 15 February 2000 noted in para.24.3.1).
In Independents’ Advantage Insurance Co Ltd v Cook [2003] EWCA Civ 1103; [2004] P.N.L.R. 3, CA, the defendant applied to strike out the claim under r.3.4(2)(a), i.e. that, even assuming the claimant could prove the facts alleged in his particulars of claim, he had no reasonable grounds for bringing a claim. The defendant did not allege any additional facts so as to justify a strike out on any other ground but did make a second application for summary judgment under r.24.2. The Court of Appeal considered the application under r.24.2 to be superfluous: if the particulars of claim had disclosed reasonable grounds for bringing a claim, both applications would fail; if the particulars of claim disclosed no reasonable grounds for bringing the claim, the court would have ample power to strike it out and enter judgment for the defendant, thereby making any recourse to r.24.2 quite unnecessary.
Consequential orders after striking out
Where an order of strike out has been made the court may enter such judgment for the other party as that party appears entitled to (PD 3A para.4.2, see para.3APD.4). Whilst it will often be ap- propriate to make an order dismissing the claim or giving judgment upon it (as the case may be) the court may instead merely give further directions. In Brown v AB [2018] EWHC 623 (QB) Pep- perall J struck out an unwieldy and unnecessarily complex defence which ran to 55 pages. However, having ruled that giving judgment on the claim would be disproportionate (because the defendant nevertheless had an arguable defence) the learned judge directed the defendant to file a fresh defence which was no longer than 25 pages in length and printed on A4 paper in not less than 11- point font and 1.5-line spacing. The giving of directions permitting the filing of an amended claim or defence are expressly provided for by PD 3A paras 2.4 and 3.2 in the case of strike outs made by the court when acting on its own initiative (see paras 3APD.2 and 3APD.3).
Where a strike out relates to only part of a statement of case the court may also give directions for the management of the remaining parts of the proceedings, for example, allocating them to a case management track.
In a claim against two or more defendants, it may be inappropriate to enter judgment against a defendant whose defence is struck out if the claim will still proceed against other defendants. In such a case the court may instead make a debarring order against the defendant whose defence is struck out. See further Michael v Phillips [2017] EWHC 1084 (QB) noted in para.29.9.2; Times Travel (UK) Ltd v Pakistan International Airlines Corp [2019] EWHC 3732 (Ch) and FCA v London Property Investments [2022] EWHC 1041 (Ch). In Tonstate Group Ltd v Wojakovski [2020] EWHC 1004 (Ch) Zacaroli J ruled that non-compliance with an order made in one action cannot justify the making of a debarring order in another action even if the two actions are being case managed together.
Staying subsequent claim until costs paid
Rule 3.4(4) applies where a claimant’s statement of case has been struck out, the claimant has been ordered to pay costs to the defendant, and before paying those costs they start another claim against the same defendant arising out of facts which are the same or substantially the same as those relating to the first claim. In such a case the defendant may apply for a stay of the second claim until the costs of the first claim have been paid. The term “stay” is defined in the Glossary. As to the expression “arising out of facts which are the same or substantially the same” see the commentary to r.17.4 in which similar words are used. As to the circumstances in which a subsequent claim may be struck out as an abuse of the court process, see para.3.4.3 above and Securum Finance Ltd v Ashton [2001] Ch. 291; [2000] 3 W.L.R. 1400, CA.
It has been held that a stay of subsequent proceedings until the costs of earlier proceedings have been paid does not, if reasonably imposed, amount to an infringement of ECHR art.6(1) (Stevens v School of Oriental and African Studies, The Times, 2 February 2001).
In Investment Invoice Financing Ltd v Limehouse Board Mills Ltd [2006] EWCA Civ 9; [2006] 1 W.L.R. 985, CA, C1 presented a winding up petition against D in respect of certain alleged debts which D disputed. The petition was dismissed with costs assessed at £18,000. C1 then commenced new proceedings against D in respect of the same alleged debts which debts it then purported to assign to C2 who was joined as a claimant. C1 was ordered to give security for future costs and for
3.4.23
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PART 3 THE COURT’S CASE AND COSTS MANAGEMENT POWERS
the costs of the winding up and, on C1’s failure to comply with that order, C1’s claim was struck out with costs assessed at £5,000. The Court of Appeal upheld an order staying C2’s claim until the costs awarded against C1 totalling £23,000 had been paid. The court had an inherent jurisdiction to make such an order which was analogous to an order under r.3.4(4). Even though C2 had not commenced the proceedings it was an abuse for him, as successor in title to C1, to continue the proceedings whilst the costs orders against C1 remained unsatisfied.
As to the orders appropriate for failure to comply with an order to pay costs of interlocutory proceedings see Oil & Minerals Development Corp v Sajjad [2002] EWHC 1258, noted in para.3.4.18 above, Reed v Oury (No.2) [2002] EWHC 369 (Ch), and CIBC Mellon Trust Co v Mora Hotel Corp NV [2002] EWCA Civ 1688; [2003] 1 All E.R. 564 (Ch) noted below.
In Reed v Oury (No.2) (above) breach of trust claims were made against the defendant, an ac- countant who counterclaimed in respect of fees for work done and services provided. Although judgment by consent was entered against the defendant for damages and costs on the claim, no payments were made under that judgment and, some months later, the defendant sought to reactivate his counterclaim. It was held that, having regard to the conduct of the litigation, the weakness of the counterclaim, the cost of having it determined and the likelihood that even if it was successful, he would continue to owe a very large sum to the claimants, the proportionate way of achieving the overriding objective was to stay his counterclaim until he had paid the amount incontestably due from him by way of damages and costs. The decision in Reed v Oury was cited with approval in Ali v Hudson [2003] EWCA Civ 1793; [2004] C.P. Rep. 15; (noted in para.3.1.5, above).
In CIBC Mellon Trust Co v Mora Hotel Corp NV (above), as a result of extremely protracted proceedings in various courts in England and New York, the claimants obtained English freezing orders and default judgments which were recognised by the courts of New York. After a two-year delay an application was made, funded by the controlling shareholder of the defendants, to set aside the default judgments. The claimants applied for a stay of that application unless and until certain sums were paid by way of damages and costs. The claimants refused to permit payment of those sums out of assets secured for them by the freezing orders. The Court of Appeal lifted a stay imposed by the lower court which required the payment of £1.5 million in respect of past orders for costs; as a matter of discretion, it was inappropriate to order a stay which retrospectively improved the claimant’s position in relation to costs orders where to do so would indirectly compel substantial payments to be made by a non-party who was not otherwise liable to pay those costs.
Investment Invoice Financing Ltd v Limehouse Board Mills Ltd [2006] EWCA Civ 9; [2006] 1 W.L.R 985, CA, was applied in Powel Entertainment v Ryder [2011] EWHC 2957 (Ch), (Briggs J). In Powel proceedings were stayed on the basis that it was an abuse of process for substantially identical claimants to commence fresh proceedings where the indemnity costs of earlier dismissed proceed- ings remained unpaid. In a similar case (Wahab v Khan [2011] EWHC 908 (Ch)) Briggs J held that, generally speaking, an order striking out the subsequent proceedings would be a disproportionate sanction for this type of abuse: instead the proceedings were stayed until the costs awarded in the earlier proceedings were paid.
Vexatious litigants
Paragraphs 7.1 to 7.10 of the practice direction supplementing r.3.4 contains provisions that ap- ply where a “civil proceedings order” or an “all proceedings order”, as defined under the Senior Courts Act 1981 s.42(1A), is in force against a person (see para.3APD.7). Those paragraphs are headed “Vexatious litigants”. Such orders should be distinguished from civil restraint orders (see para.3.4.10, and r.3.11 and commentary following).
The term “vexatious litigant” is used to describe a person who has habitually and persistently and without reasonable ground instituted vexatious proceedings, whether in the High Court or an inferior court, made vexatious applications in such proceedings or instituted vexatious prosecutions. In respect of such a person an order may be made under SCA 1981 s.42 requiring them to obtain the permission of a High Court judge to begin or continue or to make any application in proceed- ings covered by the order (see Vol.2, para.9A-148). Where a person subject to an order under s.42 wishes to apply for leave to institute or continue, or to make an application in, any civil proceedings they should follow the procedure stated in paras 7.1 to 7.10.
Normally, the civil proceedings which the person subject to the order is prevented from institut- ing or continuing, or from making an application in, will include claims for judicial review. CPR r.54.4 states that the court’s permission to proceed is required in a claim for judicial review. (Ap- plications for such permission are normally dealt with on paper.) Where a person subject to a civil proceedings order wishes to bring a claim for judicial review, they will require the leave of court under s.42. Therefore, in these circumstances, two quite distinct applications for permission are involved; one for leave to institute the proceedings under s.42 made in accordance with Pt 23 (see para.7.10), and the other for permission to proceed with the claim under r.54.4. The applications, though raising distinct issues, may be dealt with together.
In Ewing v DPP [2010] EWCA Civ 70, it was held that proposed proceedings for judicial review in a criminal cause or matter were civil proceedings and therefore an application to bring those proceedings was itself a civil proceeding and a person subject to a civil proceedings order required permission under the Senior Courts Act 1981 s.42(3) before they could make such an application.
3.4.24
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CPR 3
3.5
3.5—(1) (a)
(b)
This rule applies where—
the court makes an order which includes a term that the statement
of case of a party shall be struck out if the party does not comply
with the order; and
the party against whom the order was made does not comply with
it.
SECTION A CIVIL PROCEDURE RULES 1998
3.4.25
It is conceivable that a person’s application for leave under s.42 may be, not for permission to institute a judicial review claim, but to be joined as a co-claimant to judicial review proceedings for which there is a concurrent application for permission to proceed under r.54.4 by a competent claimant. In R. (Ewing) v Office of the Deputy Prime Minister (Practice Note) [2005] EWCA Civ 1583; [2006] 1 W.L.R. 1260, CA, the Court of Appeal explained how the two applications should be handled in these unusual circumstances (above at [33] et seq. per Carnwath LJ).
Paragraph 7 of PD 3A, see para.3APD.7 sets out what is required to be stated in applications for permission and how such applications may be dealt with. No appeal shall lie from a decision of the High Court refusing permission (s.42(4)).
The provision in para.7.6(3) of PD 3A, to the effect that an application for leave to institute proceedings may be determined by a High Court judge, without an oral hearing, is neither ultra vires nor a violation of the right of access to the Court under art.6 of the European Convention on Human Rights (R. (Ewing) v Department for Constitutional Affairs [2006] EWHC 504 (Admin); [2006] 2 All E.R. 993 (Sullivan J).
Rule 3.4(6): Where a claim is “totally without merit”
By the Civil Procedure (Amendment No.2) Rules 2004 (SI 2004/2072), r.3.11, which refers to the court’s power of the court to make civil restraint orders (CRO), was added to Pt 3 (see further para.3.11.1).
By r.3.4(6), where, in striking out a claimant’s case, the court considers that the claim or applica- tion is “totally without merit”, the court is required “at the same time” to consider whether it is ap- propriate to make a CRO. In addition, whether or not it makes a CRO, in its order the court must record the fact that it did consider that the claim or application was totally without merit. Obvi- ously, that finding may become relevant on a subsequent occasion. Rule 3.3(7) makes it clear that the court is under similar obligations when, of its own initiative, it strikes out a statement of case or dismisses an application.
In R. (Grace) v Secretary of State for the Home Department [2014] EWCA Civ 1091; [2014] 1 W.L.R. 342, the Court of Appeal stated that the proper meaning of “totally without merit” is simply “bound to fail”. The court made the point that no judge would certify an application as totally without merit unless he was confident that the case was truly bound to fail. Grace was followed in R. (Wasif) v Secretary of State for the Home Department [2016] EWCA Civ 82. However, in Wasif, the court warned that an application should not be labelled as being totally without merit merely because it was unsuccessful. The court should distinguish between an unsuccessful application in respect of which some rational argument could be raised and an unsuccessful application in sup- port of which no rational argument could be raised. Whilst it might be said that both types of claim were “bound to fail”, the making of a “totally without merit” certificate was appropriate only in the latter case (see [15] to [17]).
Judgment without trial after striking out1
(2) A party may obtain judgment with costs by filing a request for judg- ment if—
-
(a) the order referred to in paragraph (1)(a) relates to the whole of a statement of case; and
-
(b) where the party wishing to obtain judgment is the claimant, the claim is for—
-
(i) a specified amount of money;
-
(ii) an amount of money to be decided by the court;
-
(iii) delivery of goods where the claim form gives the defendant the alternative of paying their value; or
-
(iv) any combination of these remedies.
-
(3) Where judgment is obtained under this rule in a case to which
paragraph (2)(b)(iii) applies, it will be judgment requiring the defendant to deliver goods, or (if the defendant does not do so) pay the value of the goods as decided by the court (less any payments made).
1 Amended by the Civil Procedure (Amendment) Rules 2000 (SI 2000/221) and the Civil Procedure (Amendment) Rules 2014 (SI 2014/407).
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PART 3 THE COURT’S CASE AND COSTS MANAGEMENT POWERS
(4) The request must state that the right to enter judgment has arisen because the court’s order has not been complied with.
(5) A party must make an application in accordance with Part 23 if they wish to obtain judgment under this rule in a case to which paragraph (2) does not apply.
Rule 3.5: Effect of rule
This rule applies where a striking out occurs automatically because of non-compliance with the terms of a court order, for example an unless order. In such circumstances this rule enables the other party to obtain judgment with costs.
In the cases falling within r.3.5(2) the judgment can be obtained by filing a request stating that the right to enter judgment has arisen because the court’s order has not been complied with. The request may be in Form PF84A (as renumbered in April 2016). In other cases the party entitled to judgment under this rule must make an application in accordance with Pt 23 (General rules about applications for court orders).
In Apex Global Management Ltd v FI Call Ltd [2013] EWHC 3752 (Ch), it was held that in relation to judgments obtained pursuant to r.3.5(2), the abandonment of claims for relief which were not monetary claims was a permissible way of reducing a pleaded claim so as to make it fall within the scope of that provision.
Where the court makes an order directly striking out a statement of case it may also make any consequential order it thinks appropriate (r.3.4(3)) including entering such judgment for the other party as that party appears entitled to (PD supplementing r.3.4, para.4.2, see para.3APD.4). Rule 3.5 does not apply in these circumstances.
In Marcan Shipping (London) Ltd v Kefalas [2007] EWCA Civ 643; [2007] 1 W.L.R. 1864; [2007] 3 All E.R. 365, CA, the Court of Appeal stated that, at the hearing of an application made under r.3.5(5), the court’s function is limited to deciding what order should properly be made to reflect the striking out sanction which has already taken effect. The court rejected the submission that, at such a hearing, it was open to the defaulting party to contend that striking out could not be justi- fied unless the breach of the order was so serious as to prevent there being a fair trial (see further para.3.4.19). It is only if there is an application under r.3.8 by the defaulting party that the court is required to consider whether, in all the circumstances, it is just to make an order granting relief from the sanction automatically imposed. See Marcan further under 3.8.1.
In Richardson v Langtree Group Plc [2004] EWCA Civ 1447, acting on own motion and in the absence of the parties, a district judge ordered that unless the claimant complied with a direction as to disclosure of documents by a particular their “claim will be struck out without further order”. The claimants did not comply but the defendant made no attempt to request judgment against the claimant until the start of the trial, by which time disclosure had been made. The Court of Appeal referred to the question whether r.3.5 applied in these circumstances. The defendant’s contention that it did not was based on the argument that the district judge’s “springing” order was not merely an order which included a term that the claimant’s case should be struck out, but an order actually striking out the claim once the date for compliance had passed. The defendant further argued that r.3.5 did not apply because he was not seeking a “judgment with costs”. The court managed to dispose of the appeal on other grounds but it doing so doubted the validity of the defendant’s arguments as to the application of r.3.5.
Judgment without trial after striking out a claim in the County Court Money Claims Centre1
3.5A—(1) If a claimant files a request for judgment in the County Court Money Claims Centre in accordance with rule 3.5, in a claim which includes an amount of money to be decided by the court, the claim will be sent to the preferred hearing centre.
(2) If a claim is sent to a preferred hearing centre pursuant to paragraph (1), any further correspondence should be sent to, and any further requests should be made at, the hearing centre to which the claim was sent.
Rule 3.5A: Effect of rule
This rule was substituted by the Civil Procedure (Amendment) Rules 2014 (SI 2014/407), as a consequence of the coming into force of provisions in the Crime and Courts Act 2013 s.17 and Sch.9 creating the single County Court, with effect from the commencement date for those provisions. Under the new court structure, in the circumstances provided for in this rule (and in others), proceedings will not be “transferred” from court to court, but will be “sent” from one
1 Amended by the Civil Procedure (Amendment No.4) Rules 2011 (SI 2011/3103) and the Civil Procedure (Amendment) Rules 2014 (SI 2014/407).
3.5.1
3.5A
3.5A.1
115
CPR 3
3.6A
3.6A.1
3.7
SECTION A CIVIL PROCEDURE RULES 1998
3.6
3.6.1
“hearing centre” to another. The County Court Money Claims Centre (CCMCC) is the administra- tive office for the management of money claims which fall within para.4A.1 of PD 7A (formerly referred to as “designated money claims”) up to the stage at which directions questionnaires have been filed or a hearing is required. The CCMCC is not a County Court hearing centre and so if a hearing is required the claim must be sent to a hearing centre. See further para.7.2.2 above and commentary following r.26.2A. Note also r.12.6 and r.14.7A.
Setting aside judgment entered after striking out
3.6—(1) A party against whom the court has entered judgment under rule 3.5 may apply to the court to set the judgment aside.
(2) An application under paragraph (1) must be made not more than 14 days after the judgment has been served on the party making the application. (3) If the right to enter judgment had not arisen at the time when judg-
ment was entered, the court must set aside(GL) the judgment.
(4) If the application to set aside(GL) is made for any other reason, rule
3.9 (relief from sanctions) shall apply.
Rule 3.6: Effect of rule
This rule applies to a judgment entered under r.3.5, i.e. a judgment with costs entered where a statement of case has been struck out automatically as a consequence of non-compliance with the terms of a court order. It does not apply to orders directly striking out a statement of case (for example, a striking out under r.3.4).
The party against whom the judgment under r.3.5 was entered may apply to the court to set the judgment aside (r.3.6(1)). The application must be made promptly, within 14 days of service of the judgment on the applicant (r.3.6(2); as to the calculation of time periods under these rules, see r.2.8 and the commentary thereto). If the judgment was entered prematurely, the court must set it aside. In other cases the court has a discretion, to be exercised after considering all the circumstances (r.3.6(4) which refers to r.3.9 (relief from sanctions)).
Where the court has made an order directly striking out a statement of case (for example, an order under r.3.4(2)(c) the party against whom that order was made may apply under r.3.9 for relief from that order.
3.6A1 If—
-
(a) a party against whom judgment has been entered under rule 3.5
applies to set the judgment aside;
-
(b) the claim is for a specified sum;
-
(c) the claim was started in the County Court Money Claims Centre;
and
-
(d) the claim has not been sent to a County Court hearing centre, the
claim will be sent to—
(i) if the defendant is an individual, the defendant’s homecourt; and
(ii) if the defendant is not an individual, the preferred hearing
centre.
Rule 3.6A: Effect of rule
This rule was inserted by the Civil Procedure (Amendment) Rules 2014 (SI 2014/407), as a consequence of the coming into force of provisions in the Crime and Courts Act 2013 s.17 and Sch.9 creating the single County Court, with effect from the commencement date for those provisions. Under the new court structure, in the circumstances provided for in this rule (and in others), proceedings will not be “transferred” from court to court, but will be “sent” be sent from one “hearing centre” to another.
Sanctions for non-payment of certain fees by the claimant2
3.7—(1) Except where rule 3.7A1 applies, this rule applies to fees payable by the claimant where—
1 Introduced by the Civil Procedure (Amendment) Rules 2014 (SI 2014/407).
2 Amended by the Civil Procedure (Amendment No.4) Rules 2000 (SI 2000/2092), the Civil Procedure (Amendment) Rules 2002 (SI 2002/2058), the Civil Procedure (Amendment No.2) Rules 2003 (SI 2003/1242), the Civil Procedure (Amendment) Rules 2008 (SI 2008/2178), the Civil Procedure (Amendment) Rules 2013 (SI 2013/262), the Civil Procedure (Amendment No.7) Rules 2013 (SI 2013/1974), and the Civil Procedure (Amendment) Rules 2017 (SI 2017/95).
116
(5)
(6)
(7)
Where an application for—
-
(a) full or part remission of a fee is refused, the court will serve notice
on the claimant requiring payment of the full fee by the date speci-
fied in the notice; or
-
(b) part remission of a fee is granted, the court will serve notice on
the claimant requiring payment of the balance of the fee by the
date specified in the notice.
If the claimant does not pay the fee by the date specified in the notice—
-
(a) the claim will automatically be struck out without further order of the court; and
-
(b) the claimant will be liable for the costs which the defendant has incurred unless the court orders otherwise.
If—
-
(a) a claimant applies to have the claim reinstated; and
-
(b) the court grants relief,
PART 3 THE COURT’S CASE AND COSTS MANAGEMENT POWERS
-
(a) [Omitted]
-
(b) [Omitted]
-
(c) [Omitted]
-
(d) the court has made an order giving permission to proceed with a
claim for judicial review; or
-
(e) the fee payable for a hearing specified by the Civil Proceedings
Fees Order 2008 (Fees Order 2008) is not paid.
(Rule 54.12 provides for the service of the order giving permission to proceed with a claim for judicial review.)
(2) The court will serve a notice on the claimant requiring payment of the fee specified in the Fees Order 2008 if, at the time the fee is due, the claimant has not paid it or made an application for full or part remission.
(3) The notice will specify the date by which the claimant must pay the fee.
(4) If the claimant does not—
-
(a) pay the fee; or
-
(b) make an application for full or part remission of the fee,
by the date specified in the notice—
-
(i) the claim will automatically be struck out without further
order of the court; and
-
(ii) the claimant will be liable for the costs which the defendant
has incurred unless the court orders otherwise.
(Rule 44.9 provides for the basis of assessment where a right to costs arises under this rule and contains provisions about when a costs order is deemed to have been made and applying for an order under section 194(3) of the Legal Services Act 2007.)
the relief will be conditional on the claimant either paying the fee or filing evidence of full or part remission of the fee within the period specified in paragraph (8).
(8) The period referred to in paragraph (7) is—
-
(a) if the order granting relief is made at a hearing at which the claim-
ant is present or represented, 2 days from the date of the order;
-
(b) in any other case, 7 days from the date of service of the order on
the claimant.
The relevant fees
Rule 3.7 makes provision concerning the fees payable by a claimant in the circumstances speci- fied in r.3.7(1). Paragraphs (a) to (c) of this sub-rule were omitted by the Civil Procedure (Amend- ment) Rules 2017 (SI 2017/95) following the abolition of the court fee to which they related. These paragraphs applied to what used to be Fee 2.1 in the Civil Proceedings Fees Order 2008, a court fee linked to the time for service of a pre-trial checklist or listing questionnaire. As a result of changes made by the Civil Proceedings Fees (Amendment) Order 2016 (which came into force on the 6 March 2017) Fee 2.1 now provides for a fee payable in cases in which the court fixes a trial
3.7.1
117
CPR 3
3.7A1
SECTION A CIVIL PROCEDURE RULES 1998
3.7.2
date or trial period. The sanctions for non-payment of the new Fee 2.1 are now set out in the revised r.3.7A and the new r.3.7AA (see below).
Paragraph (d) of r.3.7(1) applies to the fee payable in judicial review cases under Fee 1.9(b) and/or 1.9(c) of the Civil Proceedings Fees Order 2008. Paragraph (e) of r.3.7(1) applies to any other fee payable for a hearing, for example, Fee 10.5 of the Civil Proceedings Fees Order 2008. Rule 3.7 as now amended does not apply to any fees payable by a defendant. Sanctions for non- payment of fees by defendants are now provided by Rule 3.7A which duplicates r.3.7 in respect of a fee payable by a defendant for a hearing, and r.3.7AA which duplicates r.3.7A1 in respect of a fee payable by a defendant in cases in which the court fixes a trial date or trial period.
As to the amounts payable in the circumstances specified in paras (d) and (e) of r.3.7(1), and as to applications for full or part remission, see Vol.2 para.10-1.
The amendments made to this rule by the Civil Procedure (Amendment) Rules 2017 (SI 2017/ 95) came into effect on 6 March 2017. Under the transitional provisions included in that statutory instrument the amendments have no effect in relation to a case in which the court gives notice of the trial date or the start of the trial period before 6 March 2017 (r.13(1)). Rule 3.7 (together with r.3.7A1 and r.3.7AA) is supplemented by PD 3B (Sanctions for non-payment of fees); see para.3BPD.1.
Consequences of non-payment
If the claimant fails to pay these fees and does not apply for full or part remission in respect of them, the court will serve a notice on them requiring payment and specifying the date of payment. If the claimant fails to pay the fee or apply for full or part remission by that date:
-
(1) the claim will be automatically struck out without any further order of the court; and
-
(2) the claimant will be liable for the defendant’s costs of the claim unless the court otherwise
orders.
A similar procedure applies where an application for full or part remission is made but is refused. Where a claim is automatically struck out under this rule the claimant can apply under r.3.9 (relief from sanctions) to have it reinstated on the strict terms set out in r.3.7(7).
If a claim is struck out under this rule the court will send a notice to the defendant stating that the claim has been stuck out and explaining the effect that has upon any interim injunction granted (PD supplementing r.3.7, see para.3BPD.1). The defendant must file this notice if it becomes necessary to commence proceedings for a detailed assessment of costs (see r.44.9(1)(a) and PD 47 para.13.3).
An explanatory note to r.3.7(4) mentions two provisions relevant to orders for costs. The first provision is r.44.9 which provides that the deemed order for costs in favour of the defendant which may arise under r.3.7 will be an order for costs to be assessed on the standard basis. The second provision mentioned in the explanatory note to r.3.7(4) is “section 194(3) of the Legal Services Act 2007” which deals with orders for costs in favour of a party with pro-bono representation (see further, Vol.2, para.9B-550).
As to applications for relief from the sanctions imposed by r.3.7 see R. (DPP) v Stratford Magistrates’ Court 22 March 2017, unrep., DC noted in para.3.9.21.
Sanctions for non-payment of the trial fee by the claimant1
3.7A1—(1) In this rule and in rule 3.7AA—
-
(a) “Fees Order 2008” means the Civil Proceedings Fees Order 2008;
-
(b) “fee notice” means a notice of—
-
(i) the amount of a trial fee;
-
(ii) the trial fee payment date; and
-
(iii) the consequences of non-payment of the trial fee;
-
-
(c) “trial date” means the date of the trial in relation to which the trial fee is payable, and if the trial in relation to which the trial fee is payable is scheduled to commence during the course of a specified period, “trial date” means the date of the Monday of the first week
of that specified period;
-
(d) “trial fee” means fee 2.1 set out in the Table in Schedule 1 to the
Fees Order 20082
and payable for the trial of a case on the multi-track, fast track or small claims track;
1 Introduced by the Civil Procedure (Amendment) Rules 2017 (SI 2017/95).
2 Schedule 1 was substituted by S.I. 2014/874, article 2(1), (5), Schedule, and there are relevant amendments in relation to fee 2.1 in the Civil Proceedings Fees (Amendment) Order 2016 (S.I. 2016/1191), with saving provisions in article 3.
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PART 3 THE COURT’S CASE AND COSTS MANAGEMENT POWERS
-
(e) “trial fee payment date” means the date by which the trial fee must be paid, calculated in accordance with the Fees Order 2008;
-
(f) “revised trial fee payment date” means, if an application for fee remission is denied in whole or part, the revised date by which the fee or part of it is to be paid, calculated in accordance with the Fees Order 2008.
(2)
the claimant and the court notifies the parties in writing of the trial date.
This rule applies in relation to trial fees where that fee is to be paid by
(3) When the court notifies the parties in writing of the trial date, the court must also send a fee notice to the claimant.
(4) The fee notice may be contained in the same document as the notice of trial date, or may be a separate document.
(5) Where an application for full or part remission of a trial fee is refused, when the court sends written notice to the claimant of the refusal, the court must also notify the claimant in writing—
-
(a) that the claimant is required to pay the full trial fee by the revised trial fee payment date; and
-
(b) of the consequences of non-payment of the trial fee.
(6) Where part remission of a fee is granted, when the court sends written notice to the claimant of the part remission, the court must also notify the
claimant in writing—
-
(a) that the claimant is required to pay the balance of the trial fee by
the revised trial fee payment date; and
-
(b) of the consequences of non-payment of the balance of the trial fee.
(7) If—
-
(a) the claimant has had notice in accordance with this rule to pay the
trial fee;
-
(b) the claimant has not applied to have the trial fee remitted in whole
or part; and
-
(c) the trial fee has not been paid on or before the trial fee payment
date,
the claim will automatically be struck out without further order of the court, and unless the court orders otherwise, the claimant will be liable for the costs which the defendant has incurred.
(8) If—
-
(a) the claimant has had notice in accordance with this rule to pay the
trial fee;
-
(b) the claimant has applied to have the trial fee remitted in whole or
part;
-
(c) remission is refused or only part remission of the trial fee is
granted;
-
(d) following the decision on remission, the claimant has had notice in
accordance with this rule to pay the full trial fee or balance of it;
and
-
(e) the full trial fee or balance of it (as appropriate) has not been paid
on or before the revised trial fee payment date,
the claim will automatically be struck out without further order of the court, and, unless the court orders otherwise, the claimant will be liable for the costs which the defendant has incurred.
(Rule 44.9 provides for the basis of assessment where a right to costs arises under this rule and contains provisions about when a costs order is deemed to have been made and applying for an order under section 194(3) of the Legal Services Act 2007.)
(9) If—
-
(a) a claimant applies to have the claim reinstated; and
-
(b) the court grants relief,
119
CPR 3
3.7A1.1
3.7A1.2
3.7A1.3
the relief must be conditional on the claimant either paying the trial fee or filing evidence of full or part remission of that fee within the period speci- fied in paragraph (10).
(10) The period referred to in paragraph (9) is—
-
(a) if the order granting relief is made at a hearing at which the claim-
ant is present or represented, 2 days from the date of the order;
-
(b) in any other case, 7 days from the date of service of the order on
the claimant.
(11) If a fee is not paid for a claim where there is also a counterclaim, the
counterclaim will still stand.
Editorial introduction
This rule was inserted in Pt 3 by r.5(5) of the Civil Procedure (Amendment) Rules 2017 (SI 2017/95), and came into effect on 6 March 2017. The transitional provision in that statutory instrument applicable to the enactment of r.3.7A1 states that the rule has no effect in relation to a case in which the court gives notice of the trial date or the start of the trial period before 6 March 2017 (r.13(1)). Rule 3.7A1 (together with r.3.7 and r.3.7AA) is supplemented by PD 3B (Sanctions for non-payment of fees); see para.3BPD.1.
The relevant fees
This rule makes provisions concerning the fee payable by a claimant once the court has fixed a trial date or trial period for the case. The new r.3.7AA makes similar (but not identical)_provisions concerning the fee payable by a defendant once the court has fixed a trial date or trial period for a case which is proceeding only as to a counterclaim (see Fee 2.1 in the Civil Proceedings Fees Order 2008, as amended by the Civil Proceedings Fees (Amendment) Order 2016, which came into force on the 6 March 2017).
Consequences of non-payment
In all four of the rules as to non-payment of fees (i.e., rr.3.7, 3.7A1, 3.7A and 3.7AA) no sanc- tion is imposed unless the party in default has received a notice from the court concerning the fee in question (the “fee notice”). The primary difference between rr.3.7A1 and 3.7AA on one side and rr.3.7 and 3.7A on the other, concerns the date when the fee notice is served. Under rr.3.7 and 3.7A it is not served until the deadline for payment has passed. Under this rule and r.3.7AA the fee notice is served when the court notifies the parties in writing of the trial date and, indeed it may be contained in the same document as the notice of trial date (r.3.7A1(3) and (4) and r.3.7AA(2) and (3)). The trial fee payment date must be specified in the fee notice (r.3.7A1(1) which sub-rule also applies to r.3.7AA). In most cases the trial fee payment date must be at least 28 days before the date fixed for trial (see the notes to Fee 2.1 in the Civil Proceedings Fees (Amend- ment) Order 2016 (2016/1191)). A fee notice remains valid even if the date specified in it allows the claimant more than the minimum amount of time (Boodia v Yatsyna [2021] EWCA Civ 1705; [2021] 4 W.L.R. 142, citing r.3.10).
If, having received a valid fee notice, the claimant fails to pay the fee or apply for full or part remission by the trial fee payment date:
-
(1) the claim will be automatically struck out without any further order of the court; and
-
(2) the claimant will be liable for the defendant’s costs of the claim unless the court otherwise
orders.
A similar procedure applies where an application for full or part remission is made but is refused. (On a refusal the court must send a second fee notice which must specify a revised trial fee payment date (r.3.7A1(1)(f) and r.3.7A1(6)(a)).) Where a claim is automatically struck out under this rule the claimant can apply under r.3.9 (relief from sanctions) to have it reinstated on the strict terms set out in r.3.7A1(9) and (10).
If a claim is struck out under this rule the court will send to both the claimant and the defend- ant a notice stating that the claim has been struck out and explaining the effect that has upon any interim injunction granted (PD 3B; see para.3BPD.1). The defendant must file this notice if it becomes necessary to commence proceedings for a detailed assessment of costs (see r.44.9(1)(a) and PD 47 para.13.3).
An explanatory note to r.3.7(4) mentions two provisions relevant to orders for costs. The first provision is r.44.9 which provides that the deemed order for costs in favour of the defendant which may arise under r.3.7 will be an order for costs to be assessed on the standard basis. The second provision mentioned in the explanatory note to r.3.7(4) is “section 194(3) of the Legal Services Act 2007” which deals with orders for costs in favour of a party with pro-bono representation (see further, Vol.2 para.9B-550).
In Badejo v Cranston [2019] EWHC 3343 (Ch) the trial fee was not paid on the due date but the claimant’s solicitor applied for relief against sanctions nearly three weeks before the trial date. The County Court did not expedite the hearing of that application; but instead vacated the trial date because of the automatic strikeout. On appeal, Fancourt J granted relief from sanctions. Had the
SECTION A CIVIL PROCEDURE RULES 1998
120
(5)
Where an application for—
-
(a) full or part remission of a fee is refused, the court will serve notice
on the defendant requiring payment of the full fee by the date
specified in the notice; or
-
(b) part remission of a fee is granted, the court will serve notice on
the defendant requiring payment of the balance of the fee by the
PART 3 THE COURT’S CASE AND COSTS MANAGEMENT POWERS
application been heard swiftly relief would have been granted. While it was not always possible for the court to process an application swiftly, that should not be held against litigants.
In Boodia v Yatsyna [2021] EWCA Civ 1705; [2021] 4 W.L.R. 142, a fee notice was given in respect of a fast track trial listed for hearing in June 2018. The trial fee was not paid in accordance with that notice. The court office did not comply with the obligation to serve notice of strike out (see para.3BPD.1). The June date was later adjourned because there was no judge available to hear it on that day. In September 2018 the trial was relisted for a date in January 2019 and a fee notice requiring payment in December 2018 was given and that fee was paid before the December date. At the trial, the defence submitted that the claim had been automatically struck out before June 2018 but the trial judge ruled that subsequent events had amounted to an extension of the time for payment. The trial ended in judgment for the claimant. On the first appeal, the circuit judge ruled that it had not been open to the trial judge to grant a retrospective extension of time unless an ap- plication had, at that time, been made. On a second appeal to the Court of Appeal, the trial judg- ment was restored. The making of an application for relief from sanctions is not an essential prerequisite to the grant of relief ([55] to [58]). As to the third stage of the test in Denton (see para.3.9.3), Lewison LJ listed various factors ([73]); see in particular:
“x) It would be grossly disproportionate to invalidate the trial of that claim, and thus either cause both parties to incur yet further legal costs (some of which may be duplicated); or prevent Mrs Boodia from having her claims heard at all if, as seems likely, both claims would now be statute-barred. Moreover, the court would itself have to devote more time and resources to managing any new proceedings, with only partial recovery of the cost of doing so. That would put a strain on an already overstretched system.”
Sanctions for non-payment of certain fees by the defendant1
3.7A—(1) Except where rule 3.7AA applies, this rule applies to fees pay- 3.7A able by the defendant where—
-
(a) a defendant files a counterclaim without—
-
(i) payment of the fee specified by the Civil Proceedings Fees
Order 2008 (Fees Order 2008); or
-
(ii) making an application for full or part remission of the fee;
or
-
-
(b) the proceedings continue on the counterclaim alone and—
-
(i) [Omitted]
-
(ii) [Omitted]
-
(iii) [Omitted]
-
(iv) the fee payable for a hearing specified by the Fees Order 2008 is not paid.
-
(2) The court will serve a notice on the defendant requiring payment of the fee specified in the Fees Order 2008 if, at the time the fee is due, the defendant has not paid it or made an application for full or part remission.
(3) The notice will specify the date by which the defendant must pay the fee.
(4) If the defendant does not—
-
(a) pay the fee; or
-
(b) make an application for full or part remission of the fee,
by the date specified in the notice, the counterclaim will automatically be struck out without further order of the court.
date specified in the notice.
(6) If the defendant does not pay the fee by the date specified in the
notice, the counterclaim will automatically be struck out without further order of the court.
1 Amended by the Civil Procedure (Amendment) Rules 2013 (SI 2013/262) and the Civil Procedure (Amendment) Rules 2017 (SI 2017/95).
121
CPR 3
3.7A.1
3.7A.2
The relevant fees
This rule makes provisions concerning the fee payable by a defendant for a hearing other than a trial, for example, Fee 10.5 of the Civil Proceedings Fees Order 2008. This rule was amended (in line with the amendments to r.3.7) by the Civil Procedure (Amendment) Rules 2017 (SI 2017/95) which came into effect on 6 March 2017. Under the transitional provisions included in that statu- tory instrument the amendments have no effect in relation to a case in which the court gives notice of the trial date or the start of the trial period before 6 March 2017 (r.13(1)). As to the amount pay- able and as to applications for exemption or remission, see the Civil Proceedings Fees Order 2008 (SI 2008/1053), as amended (Vol.2, para.10-1).
Consequences of non-payment
If the defendant fails to pay this fee and does not apply for exemption or remission in respect of it, the court will serve a notice on them requiring payment and specifying the date of payment. If the defendant fails to pay the fee or apply for exemption or remission by that date the defence will be automatically struck out without any further order of the court. A similar procedure applies where an application for exemption or remission is made but is refused. Where a defence is automatically struck out under this rule the defendant can apply under r.3.9 (relief from sanctions) to have it reinstated on the strict terms set out in r.3.7A(7).
Rule 3.7A does not make a defendant whose counterclaim has been struck out liable for the claimant’s costs of the counterclaim (contrast the sanctions provided by rr.3.7 and 3.7A1 where a claimant fails to pay certain fees, and the sanctions provided by r.3.7B where a claimant or defend- ant pays any court fee by a cheque which is subsequently dishonoured).
Sanctions for non-payment of the trial fee by the defendant, where proceedings continue on the counterclaim alone1
3.7AA—(1) This rule applies in relation to trial fees where that fee is to be paid by the defendant and the court notifies the defendant in writing of the trial date.
(Definitions contained in rule 3.7A1(1) apply to this rule also.)
(2) When the court notifies the parties in writing of the trial date, the court must also send a fee notice to the defendant.
(3) The fee notice may be contained in the same document as the notice of trial date, or may be a separate document.
(4) Where an application for full or part remission of a trial fee is refused, when the court sends written notice to the defendant of the refusal, the court must also notify the defendant in writing—
-
(a) that the defendant is required to pay the full trial fee by the revised trial fee payment date; and
-
(b) of the consequences of non-payment of the trial fee.
(5) Where part remission of a fee is granted, when the court sends written notice to the defendant of the part remission, the court must also notify the
defendant in writing—
-
(a) that the defendant is required to pay the balance of the trial fee by
the revised trial fee payment date; and
-
(b) of the consequences of non-payment of the balance.
1 Introduced by the Civil Procedure (Amendment) Rules 2017 (SI 2017/95).
3.7AA
SECTION A CIVIL PROCEDURE RULES 1998
(7) If—
-
(a) the defendant applies to have the counterclaim reinstated; and
-
(b) the court grants relief,
the relief will be conditional on the defendant either paying the fee or filing evidence of full or part remission of the fee within the period specified in paragraph (8).
(8)
The period referred to in paragraph (7) is—
-
(a) if the order granting relief is made at a hearing at which the
defendant is present or represented, 2 days from the date of the
order;
-
(b) in any other case, 7 days from the date of service of the order on
the defendant.
122
(9)
The period referred to in paragraph (8) is—
-
(a) if the order granting relief is made at a hearing at which the
defendant is present or represented, 2 days from the date of the
order;
-
(b) in any other case, 7 days from the date of service of the order on
the defendant.
PART 3 THE COURT’S CASE AND COSTS MANAGEMENT POWERS
(6) If—
-
(a) the defendant has had notice in accordance with this rule to pay
the trial fee;
-
(b) the defendant has not applied to have the trial fee remitted in
whole or part; and
-
(c) the trial fee has not been paid on or before the trial fee payment
date,
the counterclaim will automatically be struck out without further order of the court.
(7) If—
-
(a) the defendant has had notice in accordance with this rule to pay
the trial fee;
-
(b) the defendant has applied to have the trial fee remitted in whole
or part;
-
(c) remission is refused or only part remission of the trial fee is
granted;
-
(d) following the decision on remission, the defendant has had notice
in accordance with this rule to pay the full trial fee or balance of
it; and
-
(e) the full trial fee or balance of it (as appropriate) has not been paid
on or before the revised trial fee payment date,
the counterclaim will automatically be struck out without further order of the court.
(8) If—
-
(a) a defendant applies to have the counterclaim reinstated; and
-
(b) the court grants relief,
the relief will be conditional on the defendant either paying the trial fee or filing evidence of full or part remission of the fee within the period specified in paragraph (9).
Editorial introduction
This rule was inserted in Pt 3 by r.5(9) of the Civil Procedure (Amendment) Rules 2017 (SI 2017/95), and came into effect on 6 March 2017. The transitional provision in that statutory instrument applicable to the enactment of r.3.7AA states that the rule has no effect in relation to a case in which the court gives notice of the trial date or the start of the trial period before 6 March 2017 (r.13(1)). Rule 3.7AA (together with r.3.7 and r.3.7A1) is supplemented by PD 3B (Sanctions for non-payment of fees); see para.3BPD.1.
The relevant fees
This rule makes provisions concerning the fee payable by a defendant once the court has fixed a trial date or trial period for the case which is proceeding only as to a counterclaim. It makes provi- sions which are similar (but not identical) to r.3.7A1 concerning the fee payable by a claimant once the court has fixed a trial date or trial period (see Fee 2.1 in the Civil Proceedings Fees Order 2008 (SI 2008/1053), as amended by the Civil Proceedings Fees (Amendment) Order 2016 (SI 2016/ 1191), which came into force on 6 March 2017).
Consequences of non-payment
In all four of the rules as to non-payment of fees (i.e., rr.3.7, 3.7A1, 3.7A and 3.7AA) no sanc- tion is imposed unless the party in default has received a notice from the court concerning the fee in question (the “fee notice”). The primary difference between rr.3.7A1 and 3.7AA on one side and rr.3.7 and 3.7A on the other, concerns the date when the fee notice is served. Under rr.3.7 and 3.7A it is not served until the deadline for payment has passed. Under this rule and r.3.7A1 the fee notice is served when the court notifies the parties in writing of the trial date and, indeed it may be contained in the same document as the notice of trial date (r.3.7A1(3) and (4) and r.3.7AA(2) and (3)). The trial fee payment date must be specified in the fee notice (r.3.7A1(1) which sub-rule also
3.7AA.1
3.7AA.2
3.7AA.3
123
CPR 3
3.7B.1
the paying party.
(6) For the purposes of this rule, “claimant” includes a claimant in a
counterclaim or other additional claim and “claim form” includes a counterclaim or other additional claim.
Rule 3.7B: Effect of rule
This rule specifies the procedure to be followed where a claimant or defendant pays a court fee by cheque and the cheque is subsequently dishonoured; the court will serve a notice on them requiring payment and specifying the date of payment. (The court is not required to invite the making of an application for exemption or remission in respect of the fee; contrast the provisions of rr.3.7 and 3.7A.) If the paying party is the claimant and the fee is not paid by the date specified in the notice:
-
(1) the claim will be automatically struck out without any further order of the court; and
-
(2) the claimant will be liable for the defendant’s costs of the claim unless the court otherwise
orders.
If the paying party is the defendant and the fee is not paid by the date specified in the notice:
-
(1) the defence will be automatically struck out without any further order of the court; and
-
(2) the defendant will be liable for the claimant’s costs of the defence unless the court otherwise
orders.
A party whose claim or defence has been automatically struck out under this rule can apply
1 Amended by the Civil Procedure (Amendment No.7) Rules 2013 (SI 2013/1974) and the Civil Procedure (Amendment) Rules 2023 (SI 2023/105).
(5)
The period referred to in paragraph (4) is—
(a) if the order granting relief is made at a hearing at which the pay-
ing party is present or represented, 2 days from the date of the
order;
(b) in any other case, 7 days from the date of service of the order on
SECTION A CIVIL PROCEDURE RULES 1998
3.7B
applies to r.3.7AA). In most cases the trial fee payment date must be at least 28 days before the date fixed for trial (see the notes to Fee 2.1 in the Civil Proceedings Fees Order 2008, as amended by the Civil Proceedings Fees (Amendment) Order 2016).
If, having received a valid fee notice, the defendant fails to pay the fee or apply for full or part remission by the trial fee payment date the counterclaim will automatically be struck out without further order of the court. As under r.3.7A, a strike out of the counterclaim made under r.3.7AA does not carry with it any obligation to pay the claimant’s costs of the counterclaim (contrast rr.3.7, 3.7A1 and 3.7B).
This rule contains provisions similar to r.3.7A1 concerning the service by the court of a revised fee notice if an application for remission is made but refused, and concerning applications for reinstatement by way of relief from the sanction of strike out.
Sanctions for dishonouring cheque1
3.7B—(1) This rule applies where any fee is paid by cheque and that cheque is subsequently dishonoured.
(2) The court will serve a notice on the paying party requiring payment of the fee which will specify the date by which the fee must be paid.
(3) If the fee is not paid by the date specified in the notice—
(a) where the fee is payable by the claimant, the claim will automati-
cally be struck out without further order of the court;
(b) where the fee is payable by the defendant, the defence will
automatically be struck out without further order of the court, and the paying party shall be liable for the costs which any other party has incurred unless the court orders otherwise.
(Rule 44.9 provides for the basis of assessment where a right to costs arises under this rule.)
(4) If—
-
(a) the paying party applies to have the claim or defence reinstated;
and
-
(b) the court grants relief,
the relief shall be conditional on that party paying the fee within the period specified in paragraph (5).
124
PART 3 THE COURT’S CASE AND COSTS MANAGEMENT POWERS
under r.3.9 (relief from sanctions) to have it reinstated on the strict terms set out in r.3.7B(4). An explanatory note to r.3.7B(3) states that, where a right to costs arises under r.3.7B “rule 44.12 provides for the basis of assessment”. This note requires amendment to take account of the amend- ments made in April 2013 (what was r.44.12 is now r.44.9). However, curiously neither r.44.9, nor its predecessor, r.44.12, mentions orders for costs under r.3.7B (contrast their references to orders for costs under r.3.7).
Sanctions have effect unless defaulting party obtains relief1
3.8—(1) Where a party has failed to comply with a rule, practice direction or court order, any sanction for failure to comply imposed by the rule, practice direction or court order has effect unless the party in default applies for and obtains relief from the sanction.
(Rule 3.9 sets out the circumstances which the court will consider on an ap- plication to grant relief from a sanction.)
(2) Where the sanction is the payment of costs, the party in default may only obtain relief by appealing against the order for costs.
(3) Where a rule, practice direction or court order—
-
(a) requires a party to do something within a specified time, and
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(b) specifies the consequence of failure to comply,
the time for doing the act in question may not be extended by agreement between the parties except as provided in paragraph (4).
(4) In the circumstances referred to in paragraph (3) and unless the court orders otherwise, the time for doing the act in question may be extended by prior written agreement of the parties for up to a maximum of 28 days, provided always that any such extension does not put at risk any hearing date.
Coronavirus variation
Practice Direction 51ZA (April 2020) varied r.3.8(4) as from 2 April 2020 to 30 October 2020. The variation substitutes 56 days for 28 days, thus extending the time for which parties can agree extensions of time. The Practice Direction further enjoins courts to take account of the impact of the Coronavirus epidemic, in so far as that is consistent with the proper administration of justice, in considering any applications for extensions of time whether agreed by the parties or otherwise.
Rule 3.8: Effect of rule
In this and other rules the term sanction refers to any adverse consequence imposed upon a party because of his failure to comply with a rule, practice direction or court order (see Summit Navigation Ltd v Generali Romania Assigurare Reasigurare SA [2014] EWHC 398 (Comm) at [27]; [2014] 1 W.L.R. 3472). Many rules, practice directions and orders specify a sanction which will come into operation in the case of non-compliance. If no sanction is specified, one may be imposed by an order obtained by the non-defaulting party on an application under r.3.4(2)(c) (“failure to comply with a rule, practice direction or court order”; and see para.3.4.18, above and 3.9.10, below).
This rule confirms the validity of any sanction imposed by a rule, practice direction or court order whilst at the same time providing that the party in default may apply for relief from the sanction. In most cases an application for relief can be made under r.3.9. However, if the sanction is an order for the payment of costs the party in default may obtain relief only by way of appealing against the order for costs (r.3.8(2)).
This rule also removes the right which the parties would otherwise have (r.2.11) to extend by agreement the time for doing an act specified in a rule, practice or court order where the rule, practice direction or court order also specifies the time for doing that act and the consequences of failure to comply (r.3.8(3)).
In Marcan Shipping (London) Ltd v Kefalas [2007] EWCA Civ 463; [2007] 1 W.L.R. 1864, CA, the court stated that r.3.1(3)(b) expressly gives the court the power when making an order to specify the consequences of failure to comply with its terms; and that r.3.8(1) expressly provides that where a party has failed to comply with an order any sanction imposed by the order has effect unless the party in default applies for and obtains relief from the sanction. No further order is required to render the sanction effective; on the contrary, the onus is on the defaulting party to take steps to obtain relief; Moore-Bick LJ at [28].
Note also PD 3A para.1.9 at 3APD.1 which states that: “where a rule, practice direction or order states ‘shall be struck out or dismissed’ or ‘will be struck out or dismissed’ this means that the strik-
1 Amended by the Civil Procedure (Amendment) Rules 2013 (SI 2013/262) and the Civil Procedure (Amendment No.5) Rules 2014 (SI 2014/1233).
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ing out or dismissal will be automatic and that no further order of the court is required.”
Relief from sanction without an application
In Marcan (above) it was further held that the court has jurisdiction to give relief from sanction on its own its own initiative despite the wording of r.3.8(1) which assumes that the party in default will make an application for relief; Keen Phillips v Field [2006] EWCA Civ 1524; [2007] 1 W.L.R. 686, CA, followed in this respect. The court in Marcan recognised that the jurisdiction is one which is likely to be exercised only rarely because it will usually be necessary for evidence to be placed before the court to enable it to consider the various matters to which rule 3.9 refers; see [33]. In Nelson v Circle Thirty Three Housing Trust Ltd [2014] EWCA Civ 106, the Court of Appeal confirmed that the court could consider relief from sanctions of its own motion under r.3.9.
The case of Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537; [2014] 1 W.L.R. 795 (as to which, see para.3.9.2) resulted in a large number of applications to the court for orders recording the parties’ agreement for extensions of time to serve witness statements or other documents. Busy courts, with limited resources, could not cope with this influx. The applications themselves resulted in costs being needlessly incurred. In the King’s Bench Division, Central Of- fice, the designated clinical negligence Masters introduced what has become widely known as a “buffer” direction and this was adopted in many other courts. The standard direction is as follows:
“The Parties may, by prior agreement in writing, extend time for a Direction in this Order by up to 28 days and without the need to apply to Court. Beyond that 28-day period, any agreed extensions of time must be submitted to the Court by email including a brief explanation of the reasons, confirmation that it will not prejudice any hearing date and with the draft Consent Order in Word format. The Court will then consider whether a formal application and hearing is necessary. Any retrospective agreement to extend time is to submitted to the Court in like manner.”
The Civil Procedure (Amendment No.5) Rules 2014 (SI 2014/1233), which came into force on 5 June 2014, sanctioned this approach at least in relation to prospective agreements. Although the new r.3.8(4) does not relate to retrospective agreements to extend time, it is submitted that the standard direction (which does include retrospective agreements) may sensibly be adopted given the judicial scrutiny involved.
Relief from sanctions1
3.9—(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need—
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(a) for litigation to be conducted efficiently and at proportionate cost; and
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(b) to enforce compliance with rules, practice directions and orders.
(2) An application for relief must be supported by evidence.
Impact of coronavirus on applications for relief from sanction
Practice Direction 51ZA (April 2020) required, from 2 April 2020 to 30 October 2020, courts to take account of the impact of the Coronavirus epidemic, in so far as that is consistent with the proper administration of justice, in considering applications for relief from sanction.
Rule 3.9: Effect of rule in general terms
This rule sets out the court’s general discretion to give relief from any sanction imposed for failure to comply with any rule, practice direction or court order. The sanction imposed may be the entry of judgment against the defaulting party (for example, an unless order, as to which, see further, para.3.4.19, above) or the loss of the right to call a witness (for example, r.32.10; consequence of failure to serve a witness statement, as to which see Primus Telecommunications Netherlands BV v Pan European Ltd [2005] EWCA Civ 273) or the loss of a right to participate in a hearing (for example, a debarring order, or, in detailed assessment proceedings, the penalty under r.47.9(3) (consequences of late service of points of dispute; see further, Hallam Estates v Baker [2014] EWCA Civ 661; [2014] 4 Costs L.R. 660. In some cases specific rule provision is made for relief from particular sanctions (for example, Pt 13 (setting aside or varying default judgment) and r.39.3(3) setting aside judgment entered on failure to attend trial). Rule 3.9 does not apply where the sanction imposed is an order for the payment of costs; in that instance the party in default may only obtain relief by appealing against the order for costs (r.3.8(2)).
In Momson v Azeez [2009] EWCA Civ 202 it was held that the refusal to grant relief against a debarring sanction would not contravene art.6 of the European Convention on Human Rights provided that such refusal was proportionate and was for a legitimate purpose. The Court of Ap-
1 Amended by the Civil Procedure (Amendment) Rules 2013 (SI 2013/262).
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peal held that any other conclusion would mean that litigants could with impunity avoid compli- ance with court orders made for the purpose of the holding of a fair trial.
It should be noted that r.3.9 comes into play, not merely where a party has failed to comply with any rule, etc., but only where a sanction is imposed as a result of that failure. The rule in its cur- rent form was first implemented in April 2013 (see further, para.3.9.2). The new wording gave rise to an avalanche of new cases in respect of which the Court of Appeal has now clearly re-stated how the courts should deal with applications under r.3.9 (the Denton principles, as to which see paras 3.9.3 to 3.9.7). These principles now underscore the court’s approach to rule-compliance in all circumstances whether or not r.3.9 itself is engaged (see further on this, paras 3.9.8 (“Effect Denton principles on applications to set aside default judgments”) and 3.9.23 (“Effect of Denton principles in all cases of non-compliance”).
Formulation of rule since April 2013
As originally drafted, r.3.9 required a court hearing an application for relief against sanctions to consider all the circumstances including nine particular circumstances which were derived from pre-CPR case authorities. By the Civil Procedure (Amendment) Rules 2013, r.3.9(1) was substantially re-cast following recommendations made in Review of Civil Litigation Costs: Final Report (December 2009, see p.397). When the amended r.3.9(1) is read in conjunction with the contemporaneous amendments made to r.1.1 (Overriding objective), it is clear that the intention was to encourage the courts to be less ready than they previously were to grant relief from sanc- tions for procedural defaults. Under the new r.3.9(1) the court is required to consider “all the circumstances of the case, so as to enable it to deal justly with the application”. Two circumstances are specifically mentioned (factor (a) the need for litigation to be conducted efficiently and at proportionate cost and factor (b) the need to enforce compliance with rules, practice directions and court orders).
Some aspects of the Court of Appeal’s first decision on the re-formulated r.3.9 (Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537; [2014] 1 W.L.R. 795) led to an avalanche of new cases on the principles it laid down and substantial criticism and debate among practitioners and academics. In Denton v TH White Ltd [2014] EWCA Civ 906; [2014] 1 W.L.R. 3296, the Court of Appeal, dealing with three appeals, with the Bar Council and the Law Society intervening, clarified and further explained the guidance given in Mitchell. The guidance was very much needed. As the Court of Appeal itself stated, the judgment in Mitchell had been misunderstood and misapplied by some courts. The Court of Appeal expressed the hope that the further guidance will avoid the need in future to resort to the earlier decisions.
In Patterson v Spencer [2017] EWCA Civ 140, the refusal of relief from sanctions was overturned where the judge (before the guidance in Denton had been given) had erred in his approach by rely- ing extensively on Mitchell. The judge had erred, albeit understandably and the matter was considered afresh with the benefit of the guidance given in Denton.
Summary of guidance given in Denton
The guidance given in Denton may be summarised as follows: a judge should address an applica- tion for relief from sanctions in three stages. The first stage is to identify and assess the seriousness and significance of the “failure to comply with any rule, practice direction or court order” which engages r.3.9(1). If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages. The second stage is to consider why the default occurred. The third stage is to evaluate all the circumstances of the case, so as to enable the court to deal justly with the application including r.3.9(1)(a) (b). The court also gave guidance as to the importance of penalising parties who unreasonably oppose applications for relief from sanctions.
The first stage: assess seriousness and significance of breach
As far as the first stage is concerned, the Court of Appeal recognised that the use of the word “trivial” in the guidance previously given in Mitchell had given rise to some difficulty and semantic disputes. The court said that it would be preferable if in future the focus of the enquiry at the first stage should not be on whether the breach has been trivial. Rather, it should be on whether the breach has been serious or significant. The court stated that in many circumstances whether or not a breach imperilled future hearing dates or otherwise disrupts the conduct of litigation (including litigation generally) would be the most useful measure of whether a breach has been serious or significant. However, the court added that there were breaches which are serious although they are incapable of affecting the efficient progress of the litigation: e.g. the failure to pay court fees. The court stated that the concepts of seriousness and significance are not hard-edged and that there are degrees of seriousness and significance. At the first stage, the assessment of the seriousness or significance of the breach should concentrate on the very breach in respect of which relief from sanction is sought. Considerations of the defaulter’s previous conduct in the litigation (for example, if the breach is the latest in a series of failures to comply) should be left to the third stage.
If a judge concludes that a breach is not serious or significant, then relief from sanctions will usually be granted and it will usually be unnecessary to spend much time on the second or third stages. If, however, the court decides that the breach is serious or significant, then the second and third stages assume greater importance.
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stage, the claimant gave the defendants a notice of funding as required by para.9.3 of the PD, Pre- Action Conduct, then in force and the former r.44.15(1) (see Vol.2 para.7B-16) but failed to repeat that notice once proceedings were issued as was required by para.19.2 of the former Costs PD. Relief from sanction was given: on the facts, Warby J held that the breach in this case was not a serious or practically significant one.
British Gas Trading Ltd v Oak Cash and Carry Ltd [2016] EWCA Civ 153; [2016] 1 W.L.R. 4530; [2016] 4 All E.R. 129, involved an unless order following a failure to file a pre-trial checklist. The Court of Appeal held that in assessing the seriousness or significance of the breach of an unless order it was also necessary to look at the underlying breach. It was not possible to look at an unless order in isolation. The reference in the first sentence of [27] in Denton to “unrelated failures” is a reference to earlier breaches of rules or orders which the applicant has committed during the course of the litigation. The phrase “the very breach” in [27] of Denton, when applied to an unless order, means: the failure to carry out the obligation which was (a) imposed by the original order or rule and (b) extended by the unless order. Jackson LJ, giving the leading judgment, added that the very fact that a party has failed to comply with an unless order (as opposed to an “ordinary” order) is undoubtedly a pointer towards seriousness and significance. However, it was acknowledged that not every breach of an unless order is serious or significant. See para.3.9.6 for the court’s considera- tion of the third stage.
In Khandanpour v Chambers [2019] EWCA Civ 570, on D’s application to set aside a default costs certificate, the court made an order setting aside the certificate which was conditional upon D pay- ing £10,000 on account to C by 16.00 on a specified date and upon D also serving points of dispute by 16.00 on that date. D served points of dispute and paid £4,000 to C on time but failed to pay the remaining £6,000 until the following morning. The Court of Appeal held that, for the purposes of determining D’s application for relief from sanctions, the conditional order made in this case should not be treated as if it was an unless order.
“[39] ... even if the payment condition was imposed in the light of the appellant’s long- standing failure to pay the judgment debt and a history of leaving things until the last minute, he was not in breach of any previous order as to costs. It was not, therefore, a case such as described by Jackson LJ [in British Gas Trading] where, having been in breach of previous orders for payment on account of costs, the appellant was now being given a final chance. At stage one, therefore, this was a minor breach, not one which was serious or significant.”
In Diriye v Bojaj [2020] EWCA Civ 1400; [2021] 1 W.L.R. 1277, an unless order was made requiring C to file and serve, by a specified date, a reply which was explicit as to C’s case on a specified issue. A reply was served two days late but C did not then, or later, provide the explicit information required by the order. C submitted that a delay of two days, although serious, was not significant and that the failure to give the explicit information was not significant because it did not imperil the trial timetable. The Court of Appeal ruled against both submissions. As to the two- day delay, there was no room in Stage 1 to consider the degrees of seriousness of a serious breach.
Where applications for relief from sanctions are made in respect of two separate sanctions the court should consider each breach separately at the first stage but should consider both of them together at third stage (McTear v Englehard [2016] EWCA Civ 487; [2016] 4 W.L.R. 108; especially at [33], [34], [41] and [42]).
The second stage: why the default occurred
The second stage is particularly important where the breach is serious or significant. The court declined to give any examples of good and bad reasons for a failure to comply with rules, practice directions or court orders. The court did not disapprove of the examples previously given in Mitchell but stated that they are no more than examples. In Mitchell, the examples given were as follows: the fact that the defaulting party or his solicitor suffered from a debilitating illness or was involved in an accident ([41]); later developments in the course of the litigation process if they show that the period for compliance originally imposed was unreasonable, although the period seemed to be reasonable at the time and could not realistically have been the subject of an appeal ([41]) “...good reasons are likely to arise from circumstances outside the control of the party in default...” ([43]).
If some good reason is shown for the failure to comply with a rule, practice direction or order, the court will usually grant relief from any sanction imposed because of it. See, for example, Sum- mit Navigation Ltd v Generali Romania Assigurare Reasigurare SA [2014] EWHC 398 (Comm); [2014] 1 W.L.R. 3472, at [27] (failure to deliver an insurance bond in time caused by the difficulties encountered in getting the underwriter’s signature to the bond); Cranford Community College v Cranford College Ltd [2014] EWHC 349 (IPEC), HH Judge Bacon, (one of the defaulting party’s key witnesses had been pre-occupied with caring for and visiting his very ill wife in hospital); Service Insurance Co Ltd v Beacon [2014] EWHC 2435 (QB), Andrews J, (non-compliance with a consent order to issue a new claim form by 21 September 2013; although the claimant had delivered the new claim form to the court office in good time, the court office had not issued it until 25 September 2013, i.e. nine days after receipt and four days after the deadline; such a delay was outside the control of the claimant).
The third stage: all the circumstances of the case, including r.3.9(1)(a) and (b)
The Court of Appeal highlighted what had been an important misunderstanding of Mitchell: it is wrong to assume that, if (i) there is a non-trivial (now serious or significant) breach and (ii) there
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is no good reason for the breach, the application for relief from sanctions will automatically fail. That is not so. Rule 3.9(1) requires that, in every case, the court will consider “all the circumstances of the case, so as to enable it to deal justly with the application”. The Court of Appeal regarded this as the third stage.
Two circumstances which are specifically mentioned in r.3.9 are (a) the need for litigation to be conducted efficiently and at proportionate cost and (b) the need to enforce compliance with rules, practice directions and court orders and are referred to in Denton as factors (a) and (b). The court stated that factor (a) makes it clear that the court must consider the effect of the breach in every case. If the breach has prevented the court or the parties from conducting the litigation (or other litigation) efficiently and at proportionate cost, that will be a factor weighing in favour of refusing relief. Factor (b) emphasises the importance of complying with rules, practice directions and orders. The court observed that this factor received insufficient attention in the past. However, the old lax culture of non-compliance is no longer tolerated.
Other factors or circumstances mentioned in Denton are the need to consider whether the sanc- tion imposed is proportionate to the breach in question (see the ruling given in Decadent Vapours Ltd v Bevan a case which was heard with Denton), whether the application for relief from sanctions was made promptly, and whether the defaulting party has a poor record as to compliance with proper court procedures: other past or current breaches of the rules, practice directions and court orders may also be taken into account as a relevant circumstance.
The majority of the Court of Appeal (Lord Dyson MR; Vos LJ) expressed the view that, whilst factors (a) and (b) may not be of paramount importance, they are of particular importance and should be given particular weight at the third stage when all the circumstances of the case are considered. However, this is not what the rule actually says. Jackson LJ dissented on this point and expressed the view that the rule does not require the courts to give factors (a) and (b) any greater weight than any other circumstances. All that the rule requires is that they are specifically considered in every case.
The more serious or significant the breach the less likely it is that relief will be granted unless there is a good reason for it. Where there is a good reason for a serious or significant breach, relief is likely to be granted. Where the breach is not serious or significant, relief is also likely to be granted. Relief has been granted even in respect of the breach of an unless order (as to which, see para.3.9.4) where the breach was neither serious nor significant (Utilise TDS Ltd v Davies [2014] EWHC 834 (Ch), a delay of only 45 minutes; Michael v Lillitos [2019] EWHC 2716 (QB); [2019] Costs L.R. 1615, breach held to be near the bottom of the range of seriousness for several reasons including the fact that when the unless order had been imposed, there had been no underlying breach of a rule or court order (see [54] of the judgment)).
In British Gas Trading Ltd v Oak Cash and Carry Ltd [2016] EWCA Civ 153; [2016] 1 W.L.R. 4530; [2016] 4 All E.R. 129 (noted in paras 3.9.4 and 3.9.17), the Court of Appeal regarded the defendant’s lack of promptness in applying for relief from sanction as the critical factor for consideration at the third stage. Had the application been made promptly, it would have been granted. However, when the delay in applying for relief was added to all the other factors, it could be seen that the defendant’s default had substantially disrupted the progress of the action. The ap- plication for relief was refused.
In Depp v News Group Newspapers Ltd [2020] EWHC 1734 (QB) an order for disclosure was made against C shortly before the date fixed for the start of the trial. Four days later, C was granted a two-day extension of the time limit for compliance. The extension order was in the unless form, stating that, if C failed to make the disclosure ordered, “the claim is struck out”. C made some disclosure within time but subsequently that disclosure was held to be incomplete. C immediately completed the disclosure and applied for and was granted relief from sanction. Nicol J held that the unless order had not been made because C had been recalcitrant but because the trial had been imminent and necessitated a tight timeline. The breach was not deliberate but occurred because of the solicitors’ erroneous view of the nature of the disclosure obligations. Accordingly, although the breach was serious, there was scope for other considerations to play a more significant role in the assessment of what justice required. The first of several considerations mentioned was that the claim was far advanced, the trial was imminent and, notwithstanding the breach, the trial would not be unfair.
In Diriye v Bojaj [2020] EWCA Civ 1400; [2021] 1 W.L.R. 1277 (as to which see further, para.3.9.4) a two-month delay in applying for relief from sanctions was held to militate strongly against the grant of relief. “The need to act promptly if a party is or might be in breach of an order is axiomatic” ([65] citing PD 23A para.2.7). In mid-April, with a trial date fixed for November, allowing weeks and months to go by before even making the application for relief from sanctions was unsupportable.
The importance of discouraging opportunism by the non-defaulting party
The Court of Appeal in Denton went on to state that litigation cannot be conducted efficiently and at proportionate cost without fostering a culture of compliance with rules, practice directions and court orders, and cooperation between the parties and their lawyers. Rule 1.3 provides that “the parties are required to help the court to further the overriding objective”. Parties who op- portunistically and unreasonably oppose applications for relief from sanctions take up court time
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and act in breach of this obligation. The court made it plain that it is wholly inappropriate for litigants or their lawyers to take advantage of mistakes made by opposing parties in the hope that relief from sanctions will be denied and that they will obtain a windfall strike out or other litiga- tion advantage. In a case where (a) the failure can be seen to be neither serious nor significant, (b) where a good reason is demonstrated, or (c) where it is otherwise obvious that relief from sanctions is appropriate, parties should agree that relief from sanctions be granted without the need for further costs to be expended in satellite litigation. The parties should in any event be ready to agree limited but reasonable extensions of time up to 28 days as envisaged by the new r.3.8(4). The court will be more ready in the future to penalise opportunism. It is as unacceptable for a party to try to take advantage of a minor inadvertent error, as it is for rules, orders and practice directions to be breached in the first place. Heavy costs sanctions should, therefore, be imposed on parties who behave unreasonably in refusing to agree extensions of time or unreasonably oppose applica- tions for relief from sanctions.
In Viridor Waste Management Ltd v Veolia ES Ltd [2015] EWHC 2321 (Comm), Popplewell J, the claimant was awarded costs on the indemnity basis as a defendant had taken unreasonable advantage of the claimant’s default in its late service of its particulars of claim in the hope of obtaining a windfall strike-out when it was obvious that relief from sanctions was appropriate (and see also Freeborn v Marcal [2017] EWHC 3046 (TCC); [2017] 6 Costs LR 1103 noted in para.3.13.1).
In R. (Idira) v The Secretary of State for the Home Department [2015] EWCA Civ 1187; [2016] 1 W.L.R. 1694, on the question of costs, Lord Dyson, MR, acknowledged that, in Denton, the court had said that parties should not “adopt an unco-operative attitude in unreasonably refusing to agree extensions of time and in unreasonably opposing applications for relief from sanctions” and that “it is unacceptable for a party to try to take advantage of a minor inadvertent error...”. However, he emphasised the words “unreasonably” and “minor inadvertent”. He stated that a party is not required to agree to an extension of time in every case where the extension will not disrupt the time-table for the appeal or will not cause him to suffer prejudice. If the position were otherwise, the court would lose control of the management of the litigation: [80]. It is important to put the comments of the Master of the Rolls in context. The court was concerned with a serious delay in the filing of the respondent’s notice in judicial review proceedings. That delay did not put the hearing date at risk or cause the applicant prejudice. However, the lack of prejudice did not mean that the applicant should have consented to the respondent’s application. The Master’s deci- sion at an interim hearing extending time for the filing of the respondent’s notice but ordering the respondent to pay the applicant’s costs on an indemnity basis was upheld.
In Diriye v Bojaj [2020] EWCA Civ 1400; [2021] 1 W.L.R. 1277 (as to which see further, paras 3.9.4 and 3.9.6) the Court of Appeal warned applicants for relief from sanctions not to overstate the need for restraint on the part of the opposing party. It is not opportunistic to oppose the grant of relief where the breach is serious or significant, where no good reason for it has been demonstrated and where it is not obvious that relief from sanctions is appropriate. The threat of a costs penalty to restrain opportunism:
“... was emphatically not designed to give carte blanche to a defaulting party to blame the
other side for the delays caused by its own breach” (at [69]).
Unless the respondent had opportunistically adopted an uncooperative attitude, or was otherwise
unreasonable, the costs of an application for relief from sanctions are usually ordered against the applicant whether relief is granted or refused (Swivel UK Ltd v Tecnolumen GmbH [2022] EWHC 825 (Ch)).
Effect of Denton principles on applications to set aside default judgments
This paragraph concerns applications under r.13.3, which relates to the setting aside of a default judgment (other than a judgment wrongly entered, which can be set aside as of right under r.13.2) and applications under r.47.12(2), which relates to the setting aside of a default costs certificate (other than a certificate wrongly issued, which can be set aside as of right under r.47.12(1)). In Blakemores LDP v Scott [2015] EWCA Civ 999; [2016] C.P. Rep 1, the Court of Appeal applied the Denton principles on an appeal from an order dismissing a set aside application made under r.13.3. In Blakemores the claimant, a solicitors firm, sued upon a bill it had delivered to three former clients, the defendants in these proceedings. On 5 February 2013 a default judgment had been entered against one defendant, B. Although the claim form had been validly served on B neither the claim form nor the default judgment had come to his attention until 6 February 2014. The other defendants, A and C, filed a defence and counterclaim denying liability on the basis that the claimant had given negligent advice. On 13 March 2014 the claimant applied for summary judg- ment against A and C. On 14 March 2014 B applied for an order setting aside the default judg- ment against him. Both applications came before a circuit judge who awarded summary judgment against A and C and dismissed the application to set aside the default judgment against B. The Court of Appeal set aside both the summary judgment and the default judgment. As to the sum- mary judgment, the court disagreed with the circuit judge’s finding that, because of a limitation is- sue, the defendants had no reasonable prospects of success. As to the default judgment, it was com- mon ground that the Denton principles were properly applicable. The Court of Appeal held that, plainly, B’s delay had been serious or significant. However there was a reasonable excuse for the delay up to 6 February 2014 (when he had first become aware of the proceedings and the default
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judgment) and there was also good reason explaining his subsequent delay of 36 days before mak- ing the set aside application (during this period B had sought to trace a former solicitor and had applied for legal aid).
“[61] The third stage of the Denton analysis is to consider all the circumstances of the case giving particular weight to factors (a) and (b). Applying that test, I have no hesitation in concluding that the default judgment should in this case be set aside. [B] was faced unexpect- edly with a very difficult situation. Even having particular regard to the need for litigation to be conducted efficiently and at proportionate cost and to the need to enforce compliance with the rules, his delay was explicable and excusable in his very special circumstances. It would be unjust ... for the judgment to stand against him, whilst his co-defendants were allowed to proceed with their defence. Accordingly, in my view, the judge was wrong to refuse to set aside the default judgment...” (Vos LJ, with whose judgment Underhill and Moore-Bick LJJ agreed).
In Gentry v Miller [2016] EWCA Civ 141; [2016] 1 W.L.R. 2696, a road accident claim was notified to the defendant’s insurer in April 2013. On 8 August 2013 the claimant obtained judgment in default of an acknowledgment of service and later, on 17 October 2013, at an unopposed hearing, the damages payable were assessed at £75,089. The insurer was informed as to that assessment in late October 2013. On 25 November 2013 the defendant’s insurer made a set aside application under r.13.3 in respect of the default judgment. On 10 February 2014 the solicitors nominated by the insurer made a further application to cease acting for the defendant and for an order joining the insurer as a second defendant in order to allege that the claim was fraudulent. After some further proceedings, including an application made under r.39.3, the orders sought in the Febru- ary application were made, the default judgment was set aside on an application under r.13.3 and the judgment for £75,089 was set aside under r.39.3 (judgment at trial obtained in the absence of a party). The claimant’s first appeal as to these set asides were heard and dismissed. On the claimant’s second appeal, the Court of Appeal reinstated both the default judgment and the judgment for £75,089. It was held that the Denton principles were relevant to the application to set aside a default judgment and also to the application under CPR r.39.3 once the express requirements of those rules had been considered (see [23] and [24]).
As to r.13.3 the insurer had shown real prospects of success but could not show that it had acted promptly once it knew or ought to have known of the default judgment. It had inexcusably delayed action for more than two months. The defendant’s insurer first knew of the possibility of a claim in April 2013 and of the commencement of proceedings in July 2013 and knew or ought to have known of the default judgment on 19 September 2013 if not earlier, but did not make a set aside application until 25 November 2013 (see [31]). As to r.39.3 the court must first consider the three mandatory requirements of CPR r.39.3(5), before considering the question of whether relief from sanctions is appropriate, applying the Denton principles. The promptness of the application is a pre- condition under CPR r.39.3(5)(a). In this case the insurer had not applied promptly but had delayed for approximately four months, from October to February (see [40]).
Had the court had to apply the Denton principles, questions of delay would also have been considered at the outset but not in respect of the failure to apply promptly. The sanction from which relief was sought in respect of the default judgment would have been the failure to file an acknowledgment of service. The sanction from which relief was sought in respect of the judgment for £75,089 would have been the failure to attend the trial. The promptness of the application would have been considered only at stage three (as part of all the circumstances). On the facts, the insurer’s allegations of fraud would not have been a determinative factor under the Denton principles. Thus, as to the fraud allegation, the insurer would have to pursue what remedies it could by way of a new fraud action (see [41]).
In Cunico Resources NV v Daskalakis [2018] EWHC 3382 (Comm); [2019] 1 W.L.R. 2881 at [38] to [41], Andrew Baker J declared, obiter, that the entry of a default judgment does not amount to a sanction for procedural non-compliance by the defendant and stated that, properly understood, some of the cases mentioned above, including Gentry v Miller, did not constitute binding authorities requiring the court to determine an application under r.13.3 by applying the Denton principles. The learned judge made it clear that the views he had expressed on this matter were obiter; in Cunico the court was not in fact hearing an application under r.13.3.
See further paras 3.9.14, 3.9.15 and 3.9.15.1.
Relief from sanctions cases after the re-formulation of the rule in April 2013
The Court of Appeal’s decision in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537; [2014] 1 W.L.R. 795 gave rise to an avalanche of new cases on the scope and application of the principles it laid down. In Denton v TH White Ltd [2014] EWCA Civ 906; [2014] 1 W.L.R. 3296; [2014] 4 Costs L.R. 752, the Court of Appeal expressed the hope that the further guidance given in that case will avoid the need in future to resort to the earlier decisions. Nevertheless, several of these decisions provide useful illustrations of the current law. In the following sub-paragraphs these cases are grouped together under various headings. The titles to these sub-paragraphs are provided for convenience only and should not be treated as a rigid classification: some cases could properly be placed under more than one heading.
Conduct complained of did not bring sanction into operation
Filing a costs budget which, although signed by the solicitor, did not contain the full words of the required statement of truth did not amount to a breach of the requirement in r.3.13 to “file a
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budget as required by the rules” (Bank of Ireland v Philip Pank Partnership [2014] EWHC 284 (TCC); [2014] 2 Costs L.R. 301). Similarly, serving a list of documents which was deficient did not by itself amount to a failure to comply with an unless order to give standard disclosure provided that the list was not illusory (Lakatamia Shipping Co Ltd v Nobu Su [2014] EWHC 275 (Comm); [2014] 2 Costs L.R. 307); a list would be illusory if the court could infer lack of good faith where it was obvious, from deficiencies in the list that it had been prepared in apparent but not real compliance with the obligation to give disclosure) and see also Euro-Asian Oil SA v Abilo (UK) Ltd [2015] EWHC 1741 (Comm) and Griffith v Gourgey [2017] EWCA Civ 926. The terminology of compliance that is “il- lusory” and the test of good faith derive from the judgment of Devlin J in Reiss v Woolf, which was approved by the Court of Appeal, [1952] 2 Q.B. 557 at 559, 560 and see also QPS Consultants Ltd v Kruger Tissue (Manufacturing) Ltd [1999] C.P.L.R. 710; [1999] B.L.R. 366, Simon Brown LJ at 371R. However, in Re Bankside Hotels Ltd [2015] EWHC 1080 (Ch) Simons J expressed, obiter, some doubt as to whether these pre-CPR cases are still of continuing authority (see [39]—[55]).
Filing a costs budget which was not signed the party’s senior legal representative as required by PD 3D para.1 (see 3DPD.1) did not bring into operation the sanction imposed by r.3.14 where the budget was signed by a costs draftsman; the document suffered only from an irregularity (as to which, see r.3.10 and para.3.10.1) and r.3.14 was not applicable (Americhem Europe Ltd v Rakem Ltd [2014] EWHC 1881 (TCC); [2014] 4 Costs L.R.682).
The rules governing service of a claim form do not impose a duty upon a claimant to serve a claim form once it is issued. They are simply conditions which if satisfied, will render the defend- ant subject to the jurisdiction of the court. Accordingly r.3.9 does not give the court power to grant any relief to a claimant who has failed to satisfy those conditions (Barton v Wright Hassall LLP [2018] UKSC 12; [2018] 1 W.L.R. 1119, (at [8]); Woodward v Phoenix Healthcare Distribution Ltd [2019] EWCA Civ 985 at [48]).
See also paras 3.9.14, 3.9.15 and 3.9.15.1.
The statement by Andrew Baker J in Cunico (that the entry of a default judgment is not a sanc- tion and therefore an application to set aside a default judgment can be determined without refer- ence to the three-stage test in Denton) has been considered in two other High Court cases: Ince Gordon Dadds LLP v Mellitah Oil & Gas BV [2022] EWHC 997 (Ch) in which Hugh Sims QC (sitting as a Deputy Judge of the High Court) did not follow Cunico (see esp. [7] and [68]); and C v D [2022] 5 WLUK 99 (6 May 2022) in which Dexter Dias QC (sitting as a Deputy Judge of the High Court) followed and applied the view expressed by Andrew Baker J, both Cunico and Ince Gordon Dadds having been cited to him.
Breach avoided by an in-time application for extension of time which was granted
An in-time application for extension of time refers to an application which is received by the court office before the relevant time limit has been reached. In Re Guidezone Ltd [2014] EWHC 1165 (Ch); [2014] 1 W.L.R. 3728, Nugee J adopted this term as a clearer alternative to “a prospec- tive application for extension of time” because it often happens that, if such applications proceed to a hearing, that hearing will not take place until after the relevant time limit has expired and, therefore, the extension sought is to that extent retrospective. Subsequently, the term was adopted and used by the Court of Appeal (see Hallam Estates v Baker [2014] EWCA Civ 661; [2014] 4 Costs L.R. 660). In that case, the Court of Appeal held that (what are now the Denton principles) do not apply to an in-time application: instead the guidance given by the Court of Appeal in Robert v Momentum Services Ltd [2003] EWCA Civ 299; [2003] 1 W.L.R. 1577 remains good law. In such cases the court’s discretion to vary a time limit or deadline is to be exercised having regard to the overriding objective (as to which, see r.1.1) and without reference to r.3.9(1)(a) and (b) (i.e., the two considerations which are to be treated as having paramount importance). The addition of subpara.1.1(2)(f) into the overriding objective (“enforcing compliance with rules, practice directions and orders”) does not require courts to refuse reasonable extensions of time, which neither imperil hearing dates nor otherwise disrupt the proceedings.
The decision in Kagalovsky v Balmore Investment Ltd [2014] EWHC 108 (QB), Turner J, provides an example of an in-time application for an extension of time which was refused. In that case the eighth defendant had been found to be in contempt of court. He applied for an extension of time to file an appellant’s notice on the last day on which the notice should have been filed. The ap- plication was refused. It was held that it was not appropriate to grant an extension of time despite the potential seriousness of the consequences for him and the absence of prejudice to the claimants. It should also be noted that the judge exercised a discretion taking a number of factors adverse to the application into account. The case is not authority for the proposition that extensions of time should never be granted.
The decision in Jalla v Shell International Trading and Shipping Co Ltd [2021] EWCA Civ 1559 provides an example of an in-time application for an extension of time which was refused. In that case, in March 2020, the claimants had been ordered to supply dates and supporting evidence relat- ing to limitation issues to be determined at the trial which was subsequently listed for hearing in February 2022. In July 2021, after the expiry of substantial agreed extensions of time, the claim- ants made an application to the court for a further extension, but this was refused both at first instance and on appeal, thereby bringing to an end claims made by nearly 28,000 claimants. For an earlier example, see also Kagalovsky v Balmore Investment Ltd [2014] EWHC 108 (QB) noted in para.52.12.3).
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Matters of form, not substance
A mistake of form rather than substance is one of the examples given in Mitchell (at [40]) of a case where the non-compliance can be regarded as (in Denton parlance) “neither serious nor significant” . In Forstater v Python (Monty) Pictures Ltd [2013] EWHC 3759 (Ch); [2014] 1 Costs L.R. 36, the receiving party failed to serve a notice of funding pursuant to the old r.44.3B (see Vol.2 para.7B-12) the sanction for which is the loss of most of the recoverable success fees otherwise payable. Although there was no good reason for this failure the receiving party did belatedly give some of the required information to its opponent by letter. Norris J held that, from the date of the informal notice by letter, the receiving party’s breach was largely a matter of form not substance and so granted relief from sanctions from that date onwards. In Adlington v ELS International Lawyers LLP (In Administration) [2014] 1 Costs L.R. 105 (QB), seven out of 132 claimants applied for relief from an Unless order striking out their claims because of their failure to meet a deadline for the filing and serving of individual particulars of claim. His Honour Judge Oliver-Jones QC considered the non-compliance to be a matter of form not substance: the names of the seven claim- ants could easily be moved into a different schedule of claimants in respect of whom the Unless order did not apply.
Breach which does not imperil future hearing dates or otherwise disrupt the case in hand or litigation generally
In Denton the Court of Appeal accepted that, in many cases, a court might conclude that a breach is not serious or significant if it does not imperil future hearing dates and does not otherwise disrupt this case or litigation generally. Nevertheless it declined to adopt this as a test of seriousness and significance, holding that some breaches are serious even though they are incapable of affect- ing the efficient progress of litigation, e.g. a failure to pay court fees (see judgment at [26] and see Joshi and Welch Ltd v Taj Foods Ltd [2015] EWHC 3905 (QB), Green J).
In Decadent Vapours Ltd v Bevan [2014] EWCA 906; [2014] 1 W.L.R.3296, an appeal heard at the same time as Denton and reported with it, the claimant failed to comply with an Unless order by sending a cheque for a court fee one day late. The cheque went astray, either before or after delivery to the court office but the claimant’s solicitor remedied the breach promptly once the loss of the cheque came to light. The Court of Appeal set aside the lower court’s refusal to grant relief: (i) the failure in this case was near the bottom of the range of seriousness, (ii) there was no good reason for the breach but (iii) both factor (a) (the need for litigation to be conducted efficiently and at proportionate cost) and (b) (the need to enforce compliance with rules, practice directions and court orders) pointed in favour of the grant of relief. The breach only affected the orderly conduct of the litigation because of the approach adopted by the defendants’ failure to consent to relief be- ing given, and by the approach taken by the lower courts (see at [58] to [66]).
In Utilise TDS Ltd v Davies [2014] EWCA Civ 906; [2014] 1 W.L.R. 3296, another appeal heard at the same time as Denton and reported with it, the claimant failed to comply with an Unless order by filing a costs budget 45 minutes late and, subsequently, failed to comply with another order (in respect of which no sanction applied) by notifying the court of the outcome of certain negotiations 13 days late. The claimant’s solicitor promptly applied for relief in respect of the Unless order but was refused on the basis of the cumulative effect of the breaches. The Court of Appeal set aside the lower court’s refusal to grant relief: (i) the 45 minute delay was trivial: it did not imperil any future hearing date or otherwise disrupt the conduct of this or other litigation. In the circumstances there was no need for the district judge to spend much time on either of the second or third stages, (ii) there was no good reason for the breach but (iii) both factor (a) (the need for litigation to be conducted efficiently and at proportionate cost) and (b) (the need to enforce compliance with rules, practice directions and court orders) pointed in favour of the grant of relief. It was only at the third stage that the courts should have considered the subsequent breach (as to which there was no specified sanction); this subsequent breach was of itself neither serious nor significant and so did not outweigh the other factors. The Court of Appeal considered that the defendants ought to have consented to the grant of relief from sanctions (see at [67] to [80]).
In Caliendo v Mishcon de Reya (A Firm) [2015] EWCA Civ 1029; [2015] 5 Costs L.R. 849, the Court of Appeal upheld the decision of Hildyard J; the claimants failed by several months to give the intended defendants a notice of funding as required by para.9.3 of the PD, Pre-Action Conduct, then in force and the former r.44.15(1) (see Vol.2 para.7B-16). Subsequently proceedings were is- sued and served on the defendants together with an application for relief from sanctions. Hildyard J had granted relief against sanctions: earlier notification would not have altered the defendant’s position as regards any potential settlement, so that the default had not had a serious or significant adverse effect on the efficient conduct and progress of the litigation. The Court of Appeal held that Denton had been correctly applied and that in all the circumstances of the case it was prefer- able to grant relief rather than encourage what would inevitably be satellite litigation involving claimants suing their solicitors.
In Falmouth House Ltd v Abou-Hamdan [2017] EWHC 779 (Ch) the court, when re-fixing a trial date, ordered that if the defendant did not “attend in person” on the date so re-fixed, his Defence would be struck out and judgment entered for the claimant. At that stage in the proceedings the defendant had been acting in person and the purpose of the order was to ensure that the trial would be effective on the re-fixed date and would not be adjourned a second time. On the re-fixed
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date the defendant did not attend in person but was represented by solicitors and counsel who were ready to proceed with the trial. Counsel for the defendant applied for relief from sanctions for non-compliance with the order but that was refused by the trial judge and judgment was entered for the claimant. The defendant’s appeal against the refusal of relief from sanctions was allowed; when considering the seriousness or significance of the breach, the trial judge should have considered the purpose of the order and the practical consequences of its breach in terms of the efficiency or conduct of the trial. Although the failure to attend in person was inevitably a breach, it was not a serious or significant one; it had neither imperilled the trial date, nor in any way militated against the purpose for which it had been made.
Where the breach in question is serious or significant, the fact that it has not imperilled the trial date will not by itself lead to the grant of relief from sanctions. Factors (a) and (b) of r.3.9(1) are still of particular importance (albeit not conclusive) in all cases where serious breaches affect the ef- ficient progress of the litigation. In Clearway Drainage Systems Ltd v Miles Smith Ltd [2016] EWCA Civ 1258, a high-value commercial claim, the claimants delayed serving any witness statements for over two months, and served them less than one month before the trial date. This delay, and a similar delay in making a formal application for relief, had caused the pre-trial review to be adjourned twice. The Court of Appeal upheld the learned judge’s decision to refuse relief from sanctions: the prolonged failure over a period of months had been viewed by the court as serious or significant even though it had not imperilled the trial date. No good reason for it had been shown. Whilst the loss of the opportunity to rely upon witness evidence (which effectively terminated the claimant’s case) clearly weighed in favour of granting relief, it did not in all the circumstances, outweigh other factors including factors (a) and (b) and the lack of promptness in the application.
Clearway Drainage was distinguished in Castle Trustee Ltd v Bombay Palace Restaurant Ltd, 21 June 2017, unrep., QBD (TCC) (Jefford J). It was held that the defendant’s inability to fund its solicitors was not a good reason for its failure to comply with court directions. However, relief from sanctions was granted on the basis that the trial could proceed without any prejudice to the claimant coupled with the fact the defendant’s failure to comply with directions did not amount to a disreputable course of conduct or a deliberate flouting of the court’s orders for tactical reasons.
In Gladwin v Bogescu [2017] EWHC 1287(QB), a low value road accident claim, liability had been admitted and the claim was proceeding to a trial as to the assessment of damages, listed for 8 February 2017. Although a direction for service of witness statements by 3 November 2016 had been made, the claimant did not serve a witness statement until 5 January 2017 and did not apply for relief from sanctions until less than one week before trial. The application was made on the basis that, if relief was granted, the trial would be adjourned. In the lower court, relief from sanc- tions and an adjournment of the trial was granted on the basis that the sanction (no oral evidence allowed) would not prevent the claimant relying upon the witness statement as hearsay evidence, thereby depriving the defendant of the advantage of cross-examination. The defendant’s appeal against the grant of relief and the adjournment was granted and the claim was struck out. Although liability had been admitted, the additional expenses generated by an adjournment were likely to be significant bearing in mind the modest value of the claim. The non-compliance with rules and orders was serious and no good reason for it had been given. Had the court not exercised its power to strike out under r.3.4(2)(c) it would have had ample power under r.32.1(2) to prevent the reli- ance on hearsay evidence in a claim in which oral evidence was prohibited.
Substantial breach of a deadline
This sub-paragraph deals with cases in which in a rule, practice direction or order requires a party to perform a procedural direction by a stated deadline and also states a sanction which will take effect in the case of non-compliance and the defaulting party cannot show that the deadline was only narrowly missed (i.e., a delay which is neither serious nor significant) and cannot show some good reason for the non-compliance (as to which, see para.3.9.5, above).
In Durrant v Chief Constable of Avon & Somerset [2013] EWCA Civ 1624; [2014] 2 All E.R. 757, an order was made specifying the deadline for filing and service of any witness statements the defend- ant wished to rely upon at trial on terms that the defendant would not be permitted to rely upon any witness evidence “other than that of witnesses whose statements have been so served”. The defendant did not make an in-time application for an extension of time (as to which, see para.3.9.11, above) and without good reason failed to serve all but two witness statements until six weeks after the expiry of the deadline; the Court of Appeal held that no relief from that sanction should be allowed (as to the other two witness statements, see also, para.3.9.17).
In Denton v TH White Ltd [2014] EWCA Civ 906; [2014] 1 W.L.R. 3296; [2014] 4 Costs L.R. 752, the deadline for serving witness statements expired in June 2013 and the trial was fixed for ten days starting in mid-January 2014. In late November and early December 2013 the claimants served six further witness statements. At the pre-trial review on 23 December 2013 the judge granted relief from the sanction contained in r.32.10 and adjourned the trial. The Court of Appeal set aside that order and directed the trial be listed for trial at the earliest practicable date: (i) the service of witness statements so long after the deadline was serious and significant because it caused the trial date to be vacated and therefore disrupted the conduct of the litigation; (ii) there was no good reason for the breach; the issues dealt with in the new evidence had been known
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about since August 2013 at the latest, with most of the information being available since 2012; (iii) both factor (a) (the need for litigation to be conducted efficiently and at proportionate cost) and (b) (the need to enforce compliance with rules, practice directions and court orders) militated heavily or strongly in favour of refusing relief and there was very little to weigh in the balance in favour of granting relief. The adjournment of the proceedings caused a waste of court resources and gener- ated substantial extra costs for the parties. It caused inconvenience to a large number of busy people (including six experts and numerous factual witnesses) who had carved out space in their diaries for the anticipated trial (see at [46]–[57]).
In Kimathi v Foreign & Commonwealth Office [2017] EWHC 939 (QB) Stewart J, the applicants sought relief from sanctions so that their claims could be added to the register under a GLO after the cut-off date which was in May 2014. The application was made in November 2016. There was no good reason for the delay. Applying Denton, and looking at all the circumstances of the case, relief from sanction was refused. Although the addition of the personal injury claims would not af- fect the trial timetable or prejudice the ongoing group litigation trial, the court had to bear in mind the need for compliance with orders. The register had closed two-and-a-half years before the application was issued; there had since been numerous hearings and the trial had been underway for six months. There would be prejudice to the FCO in allowing the applications as extra time and costs would be incurred. The uncertainty over whether there had been valid reason for the solici- tors not registering the applicants’ claims also went to prejudice to the FCO, which could have to spend resources weeding out individual claims which should fail.
Extension of time: out-of-time application
The term out-of-time application refers to an application for an extension of a time limit speci- fied by a rule, practice direction or order which is not made until after the relevant time limit has expired. Some rules, practice directions and, on occasions, orders expressly state a time limit for the taking of a procedural step but do not expressly state what sanction applies if step in question is not taken in time. For r.3.9 to apply, the sanction in question has to be specified in the rule, practice direction or order in question. Nevertheless, the law and practice as to r.3.9 should be ap- plied to such cases. A party’s inability to take the procedural step in question once the time limit has expired does not amount to an express sanction. However, for the applicant seeking an exten- sion of the time limit, the consequences are exactly the same as if it did (Sayers v Clarke Walker [2002] 1 W.L.R. 3095; [2002] 3 All E.R. 490, CA. For over a decade now, out-of-time applications for an extension of time have been treated as if they were the same as applications for relief from sanctions (Altomart Ltd v Salford Estates (No.2) Ltd [2014] EWCA Civ 1408). The principles involved here have come to be known as the “implied sanction” doctrine.
The Privy Council expressed disapproval of the “implied sanction” doctrine in Attorney General of Trinidad & Tobago v Matthews [2011] UKPC 38 (a case in which no reference is made to the deci- sion in Sayers v Clarke Walker). However, in R. (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633; [2015] 1 W.L.R. 2472, the Court of Appeal reconsidered many of the case authorities on this topic and held that the “implied sanction” doctrine is now too well established to be overturned. Moreover, it may be that the decision in Mitchell has established an additional, independent line of authority for the doctrine. The Court of Appeal therefore held that out-of- time applications for extensions of time to file notices of appeal under r.3.1(2)(a) have to be determined using the principles governing applications for relief from sanctions under r.3.9.
In Mark v Universal Coatings & Services Ltd [2018] EWHC 3206 (QB); [2019] 1 W.L.R. 2376 it was held that the “implied sanction” doctrine did not apply to a breach of PD 16 paras 4.2 and 4.3, a failure to serve a medical report or a schedule of loss and damage at the same time as serving particulars of claim. Moreover, it would not be appropriate to apply the doctrine to every instance where the CPR provided that something “must” be done. Spencer J at [52] went on to explain that the reason why the breach of some rules carries an “implied sanction” is due to the significant nature of the consequences of breach flowing from the default position that applies in the absence of compliance, i.e. the failure to serve a notice of appeal means that no appeal can be brought.
In Manning and Napier Fund Inc v Tesco Plc [2020] EWHC 2106 (Ch) a trial limited to liability was listed for October 2020. In July 2020, just before a pre-trial review, C served further witness statements on D which dealt with an issue C had previously believed, wrongly, would not be determined until a subsequent trial on quantum. C made an out-of-time application for permission which, if granted, would also necessitate further disclosure being given. Applying the Denton criteria, Hildyard J ruled that C’s failure to serve evidence on this issue earlier was both serious and significant and no good reason had been shown for it. However relief from sanctions was granted conditionally on terms which would not be satisfied unless: (i) C provided sufficient disclosure in a digestible form within three weeks; (ii) the extra work which that disclosure required of D was fairly and proportionately manageable; and (iii) the disclosure did not result in a justified need for expert evidence.
In Excotek Ltd v City Air Express Ltd [2021] EWHC 2615 (Comm), after the issue and service of a claim form in the Commercial Court, the parties agreed a general stay of proceedings terminable by either party on 28 days’ notice. The claimant failed to comply with PD 58 para.7 (a requirement to notify the court of the agreed stay). Just over 12 months later, in order to remedy the position, the claimant made an out-of-time application for an extension of time to serve particulars of claim.
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Granting that application and dismissing the defendant’s application to strike out the claim, Henshaw J took into account the parties’ agreement for a stay and the fact that a refusal of relief would result in a claim for some £770,000 becoming time barred. The failure to serve particulars of claim on time was consistent with the gist of the parties’ (reasonable) consensus and had not been shown to have had adverse consequences for the defendant, or the court’s processes in general, such as to make it appropriate to refuse relief from sanctions, because a refusal would bring the claim to an end ([80]).
Cases to which Denton does not apply
The Denton principles apply to cases concerning the breach of an obligation stated in a rule, practice direction or order which imposes an express sanction, for example, r.3.14 (Failure to file a budget), r.32.10 (Consequence of failure to serve witness statement or summary) and Unless orders (see paras 3.1.14 and 3.9.4) or an implied sanction (an inability to progress the defaulting party’s claim or defence without the court’s permission), for example, r.13.3 (the court’s power to set aside a default judgment, see para.3.9.8).
3.9.16
The Denton principles do not apply to an application under r.3.1(2)(a) for a retrospective exten- sion of time for the service of a judicial review claim (R. (the Good Law Project Ltd) v Secretary of State for Health and Social Care [2022] EWCA Civ 355; [2022] 1 W.L.R. 2339).
No good reason for breach
Case examples of reasons held not to be good reasons explaining a failure to comply with a rule, practice direction or order include the following: “...overlooking a deadline will rarely be a good reason” (Mitchell at [41]); “...well-intentioned incompetence, for which there is no good reason, should not usually attract relief from a sanction unless the default is trivial” (Mitchell at [48]). See also Newland Shipping & Forwarding Ltd v Toba Trading FZC [2014] EWHC 210 (Comm); [2014] 2 Costs L.R 279; Hamblen J (the loss of legal representation as a result of a dispute over fees payable in respect of it); British Gas Trading Ltd v Oak Cash & Carry [2014] EWHC 4058 (QB) (upheld on appeal; [2016] EWCA Civ 153; [2016] 1 W.L.R. 4530; [2016] All E.R. 129; (noted in para.3.9.4, above and 3.9.17), McGowan J (personal difficulties suffered by the applicant’s solicitor whose wife was subject to ongoing medical problems, where the solicitor was a member of a firm large enough to enable work to be delegated to other fee earners with sufficient experience and skill to ensure that tasks were properly completed; and see also, Intellimedia Systems Ltd v Richards 1 February 2017, unrep., (Ch), Warren J, noted in para.3.14.1).
Inability to pay for legal representation cannot be regarded as a good reason for delay (R. (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633; [2015] 1 W.L.R. 2472). Being a litigant in person with no previous experience of legal proceedings is not a good reason for failing to comply with the CPR (R. (Hysaj), above) or court orders, (Elliott v Stobart Group Ltd [2015] EWCA Civ 449; [2015] C.P. Rep. 36).
The fact that a litigant was awaiting a funding decision by the Legal Aid Agency does not, by itself, amount to a good reason for missing a deadline; it is no more than a factor which may be
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There is a growing list of cases in which the High Court has held that a party’s failure to comply with a particular rule or practice direction paragraph does not require that party to seek relief from sanctions because the breach does not, by itself, jeopardise that party’s further progress in the proceedings. Instead, in these cases, it is left to any other party who is aggrieved by the non- compliance, to apply for an Unless order under the court’s general powers of case management (r.3.1(2)(m) and 3.1(3)) or for an order striking out the respondent’s statement of case under r.3.4(2)(c) (see para.3.4.18).
D Tenaga Nasional Berhad v Frazer-Nash Research Ltd [2018] EWHC 2970 (QB); [2019] 1 W.L.R. 946 at [34] and [35]: on an interim application, failure to serve documents in compliance with PD 23A paras 6.11 and 6.13. But see Gama Aviation (UK) Ltd v Taleveras Petroleum Trading DMCC [2019] EWCA Civ 119 at [39]; and Soriano v Forensic News LLC [2021] EWHC 873 (QB) at [45]–[56] concerning PD 23A para.9.4 (evidence for use on interim applications). (Rule 32.10 applies to witness statements and summaries “for use at a trial”.)
D Mark v Universal Coatings & Services Ltd [2018] EWHC 3206 (QB); [2019] 1 W.L.R. 2376 (noted in para.3.9.15): in a personal injury claim, failure to serve a medical report and schedule of loss and damage at the same time as serving particulars of claim as required by PD 16 paras 4.2 and 4.3. Alternatively, despite the use of the word “must” in these paragraphs, the consequences of their breach are not of such significance as to require them to be construed as imposing implied sanctions.
D Tyburn Film Productions Ltd v British Telecommunications Plc [2021] EWHC 334 (Ch) (noted in para.3.9.11): non-compliance with PD 52B para.4.2(d) (requiring grounds of appeal to be set out on a separate sheet, to be attached to an appellant’s notice) does carry an implied sanction; however, in this case the appellant made an in-time application for an extension of time to file grounds of appeal, to which the Denton principles do not apply. On that ap- plication the court had made an order in the unless form but that order was not served on the appellant. In those circumstances, when considering whether to grant relief from the sanction of the unless order, it was inappropriate to apply the Denton principles.
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taken into account (R. (Kigen) v Secretary of State for the Home Department [2015] EWCA Civ 1286; [2016] 1 W.L.R. 723). To hold otherwise would place those who apply for and obtain legal aid in a better position than those who, through no fault of their own, are forced to represent themselves (Moore-Bick LJ at [18]).
Whilst a party’s lack of representation will often justify the making of allowances in setting case management decisions and in conducting hearings (see r.3.1A, above) the lack of representation will not usually justify applying to litigants in person a lower standard of compliance with rules or court orders (Barton v Wright Hassall LLP [2018] UKSC 12; [2018] 1 W.L.R. 1119). The overriding objective requires the courts so far as practicable to enforce compliance with the rules (r.1.1(2)(f)). The rules do not in any relevant respect distinguish between represented and unrepresented parties. In Nata Lee Ltd v Abid [2014] EWCA Civ 1652; [2015] 2 P. & C.R. 3, Briggs LJ stated that the fact that a party is not professionally represented is not of itself a reason for the disapplication of rules and orders. There may be cases in which the fact that a party is a litigant in person has some consequence in the determination of applications for relief from sanctions, but this is likely to operate at the margins; see [53]. In Chadwick v Burling [2015] EWHC 1610 (Ch); [2015] 3 Costs L.R. 589, Warren J, citing Nata Lee, stated that the court was not obliged to enquire into the state of knowledge and intellectual capacity of every litigant in person who said that he did not understand the process or realise that he had certain rights. The fact that the court was dealing with a litigant in person could only be relevant at the margins, where, for example, there was some extremely complex factor or complicated order which a lay person might find it difficult to understand; see [42]. In EDF Energy Customers Ltd v Re-Energised Ltd [2018] EWHC 652 (Ch) HH Judge Mathews held that the granting of a special indulgence to a litigant in person may be justified where a rule is hard to find or difficult to understand, or ambiguous; and that some leeway may be given to a litigant in person at the margins when the court is considering relief from sanctions or promptness in applying to set aside an order.
Rule 3.1A requires the court, when exercising any powers of management, to have regard to the fact that a party is unrepresented. This may sometimes cause the court to specify longer time limits in procedural directions than would have been specified if all parties had been represented (see further, r.3.1A(1), above). However, r.3.1A does not expressly assist litigants in person to obtain relief from sanctions in respect of a breach of a time limit.
Even in the case of a breach which is serious nor significant, the absence of any good reason explaining why it occurred need not be fatal to an application for relief from sanctions. Although the court will not usually grant relief in such a case, in some circumstances it may do (see further, Decadent Vapours Ltd v Bevan [2014] EWCA Civ 906, an appeal heard at the same time as Denton and reported with it, noted in para.3.9.13, and see also para.3.9.18). However, the weaker the reason, the more likely the court will be to refuse to grant relief (see Mitchell at [42]).
Delay in applying for relief
“Every application should be made as soon as it becomes apparent that it is necessary or desir- able to make it” (PD 23A para.2.7; see 23APD.2). However, although the promptitude of applica- tion is a material factor in all relief from sanctions hearings it is never a pre-requisite to the grant of relief (Chartwell Estate Agents Ltd v Fergies Properties SA [2014] EWCA Civ 506; [2014] 3 Costs L.R. 588, at [34]; Denton v TH White Ltd [2014] EWCA Civ 906; [2014] 1 W.L.R. 3296; [2014] 4 Costs L.R. 752, at [36], [64] and [72]). In a case in which the relevant breach is neither serious nor significant, promptitude of application, and the other circumstances and the question why the breach occurred, are matters which the court is unlikely to need to spend much time considering (Denton at [24]).
In Durrant v Chief Constable of Avon & Somerset [2013] EWCA Civ 1624; [2014] 1 W.L.R. 4313; [2014] 2 All E.R.757, the Court of Appeal held reversed a judge’s decision to grant relief from sanctions in respect of the late service of witness statements in breach of an order akin to an Unless order. The deadline for exchange was 12 March 2013 and the trial date was set for 10 June 2013. The defendant served two witness statements one day late and, six weeks later, in May 2013, made an application for relief from sanctions. The defendant then served four further witness statements and, five days before the trial was due to start, made a further application for relief from sanctions in respect of two further witness statements. In respect of most of the witness statements the period of delay was substantial. In relation to the two witness statements which had been served one day late, relief from sanction was refused on the basis that the application for relief from sanctions had not been made promptly.
In British Gas Trading Ltd v Oak Cash and Carry Ltd [2016] EWCA Civ 153; [2016] 1 W.L.R. 4530; [2016] 4 All E.R. 129 the defendants failed to comply with an unless order concerning the filing of a pre-trial checklist (see further on this case, para.3.9.4, above) and subsequently their defence was struck out and judgment was entered against them. Their application for relief was delayed for 31 days in circumstances such that, had the court granted the relief requested it would have had to fix a new trial date some time after the original trial window. The Court of Appeal upheld the lower court’s decision to refuse relief from sanctions.
In Apex Global Management Ltd v Global Torch Ltd [2017] EWCA Civ 315; [2017] C.P. Rep. 28; it was held that it was possible to make a late application for a stay of proceedings in certain circumstances. Such an application would be treated as an application for relief from sanctions.
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That said, the judge’s refusal of a stay of execution based upon a challenge to the jurisdiction was upheld. The appellants’ failure to make the application at the earliest opportunity was serious. The application was made two weeks after judgment was handed down. There was no good reason for the delay. Challenges to jurisdiction should be made as early as possible. The appellants should have reserved their position on jurisdiction at the outset of the litigation.
Failure to comply which is intentional
In HRH Prince Abdulaziz Bin Mishal Bin Abdulaziz Al Saud v Apex Global Management Ltd [2014] UKSC 64; [2014] 1 W.L.R. 4495 (proceedings which involved claims and counterclaims of serious financial misconduct relating to companies) the owner of one of the companies was a member of the royal family of Saudi Arabia. He denied the claims made against him and contended that the money claimed had been repaid. At a case management conference it was ordered that the parties “file and serve a statement, certified by a statement of truth signed by them personally”. The prince refused to sign the statement personally, on the grounds that there was a Saudi Arabian protocol that members of the royal family should not become personally involved in litigation or sign court documents. An order was then made that unless the prince complied with the order and signed the statement of truth his defence would be struck out and judgment would be entered. The prince maintained his refusal and judgment was entered. The prince applied for relief from sanctions under r.3.9 which was refused by the judge. Both the Court of Appeal and the Supreme Court dismissed his appeal. Lord Neuberger PSC stated that once a court order is disobeyed, the imposition of a sanction is almost always inevitable if court orders are to continue to enjoy the respect which they ought to have. However, in a particular case, the court may be persuaded by special factors to reconsider the original order, or the imposition or enforcement of the sanction.
Where failure to comply was caused by the legal representative only
Sometimes the failure to comply with a rule, practice direction or order is not caused by a litigant but is solely the fault of his legal representative. Is this a factor which makes the grant of relief from sanctions more likely? Guidance on this was given by Peter Gibson LJ in Training in Compliance Ltd v Dewse [2001] C.P. Rep 46 at [66], CA:
“Of course, if there is evidence put before the court that a party was not consulted and did not give his consent to what the legal representatives had done in his name, the court may have regard to that as a fact, though it does not follow that it would necessarily, or even prob- ably, lead to a limited order against the legal representatives. It seems to me that, in general, the action or inaction of a party’s legal representatives must be treated under the Civil Procedure Rules as the action or inaction of the party himself. So far as the other party is concerned, it matters not what input the party has made into what the legal representatives have done or have not done. The other party is affected in the same way; and dealing with a case justly involves dealing with the other party justly. It would not in general be desirable that the time of the court should be taken up in considering separately the conduct of the legal representatives from that which the party himself must be treated as knowing, or encouraging, or permitting.”
However, Training in Compliance Ltd (above) did not directly concern r.3.9. In other cases the court has taken into account in favour of the party seeking relief the fact that the fault was one for which their legal representative only was responsible. In one case, the court took into account the detri- ment the claimant could suffer if the current proceedings were brought to an end and he was left to sue his legal representative instead (Hansom v E Rex Makin & Co [2003] EWCA Civ 1801, CA and Flaxman-Binns v Lincolnshire CC [2004] EWCA Civ 424; [2004] 1 W.L.R. 2232, CA at para.[41]). However, these cases were decided before the re-formulation of r.3.9 in April 2013 (and see further as to this, Clearway Drainage Systems Ltd v Miles Smith Ltd [2016] EWCA Civ 1258 at [71]; and Gladwin v Bogescu [2017] EWHC 1287(QB); both cases are noted at 3.9.13, above).
In Welsh v Parnianzadeh [2004] EWCA Civ 1832; [2004] All E.R. (D) 170, the Court of Appeal indicated that “a claimant who is reduced to a claim which would perforce be on a percentage basis for loss of a chance against her legal advisers is not only suffering a real loss in the sense of being caused further delay and expense, but is also suffering a real reduction in the value of her claim” (per Mance LJ). In that case the claim was allowed to proceed and one of the features was that there was no prejudice to the defendant.
In Hayden v Charlton [2011] EWCA Civ 791, the claimants sued the defendants for libel in respect of allegations made on a website. The claimants failed to comply with directions or with subsequent unless orders and eventually the judge struck out the claim on the basis that the claim- ants had lost interest in it and to continue it would be an abuse. On appeal, the claimants were permitted to adduce evidence that they had not been kept informed by their then solicitors, despite their attempts to contact them, and they had not known the true position until after the strike out had been ordered. The Court of Appeal accepted that evidence as an important factor in favour of granting relief. However, it also took into account other factors, including the considerable burden the proceedings had placed upon the defendants, who were litigants in person. That hardship would have no remedy if relief was granted whereas the claimants would have an opportunity for redress against their former solicitors if the appeal was refused. Overall, it was held that the less unfair result was for the claim to stay struck out.
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In reported applications for relief from the sanction imposed by r.3.14 (budgeted costs deemed not to exceed the sum of court fees paid) no mention has been made of the fact that the culpability for the breach of the rule (failing to file and serve a budget on time) fell solely upon the lawyers not the litigants. The explanation for this may be that the obligation to file and serve budgets under r.3.13 falls only upon litigants who are legally represented and in such cases, the loss caused by a breach of r.3.14 will fall upon the legal representatives. It is difficult to imagine many cases in which a litigant would expressly instruct his representatives not to file a budget, or to file it late.
Whether the defaulting party’s claim or defence has merit
The Supreme Court has held that the substantive merits of the defaulting party’s claim or defence may only be taken into account in limited circumstances (HRH Prince Abdulaziz Bin Mishal Bin Abdulaziz Al Saud v Apex Global Management Ltd [2014] UKSC 64; [2014] 1 W.L.R. 4495, noted in para.3.9.18, above). Lord Neuberger PSC stated that the strength of a party’s case on the ultimate merits of the proceedings is generally irrelevant when it comes to case management issues such as the imposition of sanctions or relief from sanctions. It was said that it would be thoroughly undesirable if, every time the court was considering the imposition or enforcement of a sanction, it could be faced with the exercise of assessing the strength of the parties’ respective cases: it would lead to such applications costing much more and taking up much more court time than they already do. However, Lord Neuberger PSC stated that one possible exception: a party who has a strong enough case to obtain summary judgment might, as an exception to the general rule, be entitled to rely on that fact in relation to case management decisions. His lordship concluded by stating that nothing in the judgment was intended to impinge upon the decisions or reasoning of the Court of Appeal in Denton.
The extent to which it was appropriate to consider substantive merits in applications for relief from sanctions was further considered in R. (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633; [2015] 1 W.L.R. 2472. In that case it was held that applications for exten- sions of time to file notices of appeal under r.3.1(2)(a) had to be determined using the principles governing applications for relief from sanctions under r.3.9 (see further, para.3.9.15, above). It was stated that in most cases, the merits of the substantive appeal would have little to do with whether it was appropriate to grant an extension of time. The merits would only have a significant part to play when it came to balancing the various factors that had to be considered. In most cases, the court should decline to embark on an investigation of the merits and firmly discourage argument directed to them. A robust exercise of the jurisdiction in relation to costs was appropriate to discourage those who would otherwise seek to impress the court with the strength of their cases.
Relevance of “all the circumstances”
On an application for relief from sanctions, all the circumstances have to be considered but the rule makes express reference to (a) the need for litigation to be conducted efficiently and at proportionate cost and (b) the need to enforce compliance with rules, practice directions and court orders. In Denton v TH White Ltd [2014] EWCA Civ 906; [2014] 1 W.L.R. 3296 the Court of Ap- peal decided by a majority (Lord Dyson MR and Vos LJ) that these two factors “are of particular importance and should be given particular weight at the third stage when all the circumstances of the case are considered” (see [32]; Jackson LJ, dissenting on this point: “What the rule requires is that the two factors be specifically considered in every case. The weight to be attached to those two factors is a matter for the court having regard to all the circumstances” (see [85])). Nevertheless, the Court of Appeal in Denton was unanimous in its desire to discourage courts from taking an unduly draconian approach to r.3.9(1) and (at [37]) repeated the passage from the 18th Implementation Lecture on the Jackson reforms;
“It [the relationship between justice and procedure] has changed not by transforming rules and rule compliance into trip wires. Nor has it changed it by turning the rules and rule compliance into the mistress rather than the handmaid of justice. If that were the case then we would have, quite impermissibly, rendered compliance an end in itself and one superior to doing justice in any case” (Lord Dyson MR, 22 March 2013).
Decisions as to whether or not to grant relief from sanctions are always discretionary and are highly case-sensitive. Appeal courts will not interfere with a lower court’s decision on such matters unless satisfied that the lower court erred in law, erred in fact or reached a conclusion which falls outside the generous ambit within which reasonable disagreement is possible (Abdulle v Commis- sioner of Police of the Metropolis [2015] EWCA Civ 1260; 2016 1 W.L.R. 898; and see para.52.11.4). The fact that “other circumstances” may influence the court’s decision even where the two speci- fied factors militate in favour of refusing relief may be taken as an indication that the court’s new policy in respect of non-compliance with rules, practice directions and orders is one of low toler- ance rather than no tolerance.
In Chartwell Estate Agents Ltd v Fergies Properties SA [2014] EWCA Civ 506; [2013] 3 Costs L.R. 588, the “other circumstances” which justified relief in that case were the fact that both parties had been in default, the refusal of relief would have had the disproportionate effect of ending the claim, its grant would not lead to an adjournment of the trial date and would not cause any significant extra cost.
The fact that the non-compliance has caused the loss or adjournment of a trial date is often fatal to the grant of relief (see for example British Gas Trading Ltd v Oak Cash & Carry Ltd [2016] EWCA
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Civ 153; [2016] 4 All E.R. 129, trial date lost because a trainee solicitor filed a directions question- naire in mistake for a listing questionnaire, thereby breaching an unless order; the loss of the trial date was regarded as a matter of grave concern bearing in mind the impact that it would have not only on the conduct of this case but also on other cases awaiting dates for hearings). Whilst the loss of an appeal hearing might not be as serious as losing a trial date, it is still a factor weighing against the grant of relief. Where there had been a serious breach for no reason and an appeal hearing date had been lost, very significant factors are required to tip the scales in favour of grant- ing relief Motley v Shadwell Park Ltd, CA (Civ Div) 9 November 2017, unrep.
In Manning and Napier Fund Inc v Tesco Plc [2020] EWHC 2106 (Ch) relief from sanctions for the late service of evidence was granted conditionally on terms which would be satisfied only if it transpired that the late service would not cause a loss of the trial date and would not cause material prejudice to the opposing party (see further, para.3.9.15).
In R. (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633; [2015] 1 W.L.R. 2472, the Court of Appeal held that the importance to the public at large of the issues raised in the proceedings (whether in public law cases or private law cases) is a factor which may increase the likelihood of relief being granted. In R. (DPP) v Stratford Magistrates’ Court 22 March 2017, unrep., DC, the DPP was granted relief from sanctions in judicial review proceedings after its claim was struck out for the inadvertent failure to pay a court fee. Relief from that sanction was granted. The case fell towards the bottom of the scale of seriousness. The underlying issue was not frivolous and was potentially of general public importance. The judicial review was on a question of law and there would be no forensic disadvantage to the interested parties and relatively little time would be lost (and see also, R. (Muir) v Wandsworth LBC, 23 March 2017, unrep.).
Circumstances which favour of the grant of relief from sanctions arise where the defaulting party is a defendant wishing to raise defences or counterclaims which his co-defendants will raise whether or not he is allowed relief from sanctions (see for example, Blakemores LDP v Scott [2015] EWCA Civ 999, noted in para.3.9.8, above; application to set aside a default judgment entered against one of three defendants; and Kishenin v Von Kalkstein-Bleach [2015] EWCA Civ 1184; request for extension of time for appealing made at the hearing of an appeal launched by a co- defendant).
Allegations of fraud do not give rise to any exemption from of the application of the Denton principles even where those allegations have real prospects of success (Gentry v Miller [2016] EWCA Civ 141; [2016] 1 W.L.R. 2696, noted in para.3.9.8, above).
In Michael v Phillips [2017] EWHC 142 (QB) Green J, the defendants who had seriously breached an unless order requiring them to disclose documents by a certain date had their defence and counterclaim struck out and were debarred from defending the claim. Their application for relief from sanctions under r.3.9 was refused as the way in which they had lost and/or suppressed data was profoundly unsatisfactory, and significantly and unfairly prejudiced the claimants’ ability to prepare for trial in a case turning on the forensic analysis of that data.
As to the circumstances in which it may be appropriate to take into account (in favour of a claim- ant applicant) the risk of a time bar defence if relief is not granted; see Excotek Ltd v City Air Express Ltd [2021] EWHC 2615 (Comm) noted in para.3.9.15 and Boodia v Yatsyna [2021] EWCA Civ 1705 at [73(x)] quoted in para.3.7A1.3.
Orders granting partial relief from sanctions
As an alternative to seeking full relief from a sanction imposed upon him, an applicant may invite the court to allow partial relief, such as, for example: permission to rely upon some if not all the new witness statements served late; or a disallowance of some rather than all future costs in excess of court fees. In some cases the court may grant relief on terms where the circumstances make that appropriate; for example, terms as to costs payable by the defaulting party; or interest, whether payable by or to the defaulting party; or terms requiring a payment into court to secure a claim for compensation, or to secure the non-defaulting party’s costs. A consideration of all the circumstances, including factors (a) and (b), may sometimes make it appropriate to grant partial relief, or to grant relief on terms. As to the granting of relief subject to a condition, see further, r.3.1(3) and para.3.1.14, above.
In Riff Trading Ltd (in liquidation) v Saunders (deceased) [2014] EWHC 2116 (Ch) (Edward Bartley Jones QC) defendants who had failed to file evidence in time in compliance with an Unless order were given relief from sanctions and allowed further time to serve evidence conditional upon the following terms: (a) in respect of the new time limit for serving their evidence, time was to be of the essence; (b) they were to pay the claimant’s costs of the application for relief within a defined period, time being of the essence; (c) even if they were successful at trial, they would not be able to recover any costs from the claimant or its liquidator.
In Motor Vessel Coal Hunter v Motor Vessel Yusho Regulus [2014] EWHC 4406 (QB) (Admlty) Teare J, on an application heard two weeks before the start of a trial listed for six days, the claimant ap- plied for relief from a sanction imposed by r.32.10 for its failure to serve a particular witness state- ment in time. The claimant had delayed obtaining a witness statement from a vessel’s pilot in rela- tion to a shipping accident because it had been led to believe that the pilot was not available. Applying Denton, Teare J granted the claimant permission to rely on the statement of the pilot to the extent that his account was unlikely to prejudice the defendant. However, where the defendant
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was significantly prejudiced in so far as it could not investigate specific facts asserted by the pilot in the short time left before trial, permission was refused. Accordingly, evidence of navigation was admissible subject to the proviso that the claimant and the pilot were not entitled to say that the pilot’s navigation was the standard practice followed by all pilots.
Effect of Denton principles in all cases of non-compliance
The Denton principles now underscore the court’s approach to rule-compliance generally whether or not a particular failure to comply with a rule, practice direction or court order has resulted in the imposition of an express sanction. As to applications to strike out a statement of case under r.3.4(2)(c) see Walsham Chalet Park Ltd v Tallington Lakes Ltd [2014] EWCA Civ 1607; [2015] C.P. Rep 16, noted in para.3.4.1, above. As to applications to set aside default judgments, see para.3.9.8, above. As to out-of-time applications for extensions of time (implied sanction cases) see R. (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633; [2015] 1 W.L.R. 2472 noted in para.3.9.15. As to applications under r.39.3 to set aside a judgment at trial made in the applicant’s absence, see Gentry v Miller [2016] EWCA Civ 141; [2016] 1 W.L.R. 2696 noted in para.3.9.8. As to applications for retrospective permission to continue a derivative claim, see Wilton UK Ltd v Shut- tleworth [2018] EWHC 911 (Ch) (noted in para.19.9A.8, below). As to an application to lift a stay imposed under r.15.11(1), see Bank of Beirut (UK) Ltd v Sbayti [2020] EWHC 557 (Comm), noted in para.15.11.1. In Martland v HMRC [2018] UKUT 178 (TCC) the Upper Tribunal held that the ap- proach to relief from sanctions under r.3.9 applied to applications for permission to appeal the First-tier Tribunal outside the relevant time limit.
The Denton principles do not apply to every application to the court for an indulgence of one kind or another. They do not apply to applications to amend pleadings, even where such an amendment is sought at a very late stage (Ahmed v Ahmed [2016] EWCA Civ 686 at [16] as to which, see further, para.17.3.8). The Denton principles do not apply to in-time applications for extensions of time (see para.3.9.11), there being no non-compliance in such cases. As to how the Denton principles affect the court’s approach to cases falling within r.3.10 (General power of the court to rectify matters where there has been an error of procedure), see para.3.10.3. As to how the Denton principles affect requests in a detailed assessment for a departure from an agreed or approved budget, see para.3.18.3. As to cases concerning the breach of an obligation stated in a rule, practice direction or order which does not impose an express sanction and where the breach does not, by itself, jeopardise that party’s further progress in the proceedings, see para.3.9.15.1.
The Denton principles do not fetter or overlay the discretion given to the court by s.33 of the Limitation Act 1980 to disapply a limitation period otherwise applicable to a personal injury or death claim (Ellis v Heart of England NHS Foundation Trust [2018] EWHC 3505 (Ch); [2019] P.I.Q.R. P8). Nor do they apply when the court is considering whether to uphold a “limitation amnesty” agreed by the parties to an Inheritance Act claim (Cowan v Foreman [2019] EWCA Civ 1336).
Application to be supported by evidence
Rule 3.9(2) states that an application for relief against sanctions must be supported by evidence. Such applications are normally made under Pt 23 with a witness statement in support. However, the court has discretion to grant relief from sanctions where no formal application notice has been issued, but an application is made informally at a hearing; and also where no application is made, even informally, but the court acts of its own initiative (Hadi v Park [2022] EWCA Civ 581; [2022] 4 W.L.R. 61; see also Boodia v Yatsyna [2021] EWCA Civ 1705; [2021] 4 W.L.R. 142 noted in para.3.7A1.3; and see para.3.8.2).
“The discretion must of course be exercised consistently with the overriding objective. The court, therefore, should initially consider why there has been no formal application notice, or no application at all; whether the ability of another party to oppose the granting of relief (including, if appropriate, by the adducing of evidence in response) has been impaired by the absence of notice; and whether it has sufficient evidence to justify the granting of relief from sanctions (though the general rule in CPR r32.6 does not impose an inflexible requirement that the evidence be in the form of a witness statement). It follows, from the need for those initial considerations, that the discretion will be exercised sparingly” (Park at [49], which see further).
Consequence if relief from sanctions is refused
If an application for relief from sanctions fails, the sanction in question has effect (see r.3.8(1)). Subsequent compliance with the obligation which led to it will not, by itself, amount to a material change of circumstances for the purposes of an application under r.3.1(7) (Thevarajah v Riordan [2015] UKSC 78; [2016] 1 W.L.R. 76, SC, and see para.3.1.17.1 above).
Where a sanction has effect which makes it impossible or impracticable for a claimant to continue the proceedings, the claimant may discontinue them, pay the defendant’s costs to date and apply to the court for permission to bring a new claim (see further, r.38.7 and the commentary thereto and see also para.3.4.8).
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3.10
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General power of the court to rectify matters where there has been an error of procedure
3.10 Where there has been an error of procedure such as a failure to comply with a rule or practice direction—
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(a) the error does not invalidate any step taken in the proceedings un- less the court so orders; and
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(b) the court may make an order to remedy the error.
Effect of non-compliance
Rule 3.10 states that errors of procedure do not nullify the proceedings or any step taken in them. Thus, any step taken which is permitted by the CPR is valid even if it is taken defectively, in breach of a rule or practice direction. In most circumstances, r.3.10 gives the court a general power to remedy errors or procedure (i.e. by making orders to correct or waive any irregular step, docu- ment or order). It is now firmly established that this general power cannot be used to correct or waive errors such as the late service or defective service of a claim form (see para.3.10.4). However, errors such as these will be waived if the defendant in question fails to challenge the court’s jurisdiction before taking any step in the action save as permitted by Pt 11 generally and para.11.1.3.
On the question whether the commencement of proceedings in the name of a dead person is a nullity which is not curable on an application under r.3.10, see para.19.8.2, below, noting Milburn- Snell v Evans [2011] EWCA Civ 577; [2012] 1 W.L.R. 41 and subsequent cases.
As to the power of an appeal court to allow an appeal where decision of lower court was unjust because of serious procedural irregularity, see r.52.21(3)(b).
Meaning of “error of procedure”
Rule 3.10 gives examples of procedural errors but does not attempt a definition. It has been held that procedural errors are not confined to the examples given in r.3.10, failures to comply with a rule or practice direction; it can apply to any procedural step taken in error, including a step which was permitted by the rules or practice directions. In Steele v Mooney [2005] EWCA Civ 96; [2005] 1 W.L.R. 2819; [2005] 2 All E.R. 256, CA the claimant took a procedural step which was permitted by the rules (an application for an extension of time for service of particulars of claim) but, by mistake, failed to apply also for an extension of time for service of the claim form. The Court of Appeal held that this mistake was a procedural error which was capable of being remedied under r.3.10. This was so even though at the time relief was sought under r.3.10, an extension of the time for service of the claim form was prohibited by r.7.6(3). Whilst the Court of Appeal ac- cepted that r.3.10 cannot be successfully invoked so as to circumvent the prohibition of late applica- tions for extension (as to this, see Vinos v Marks & Spencer Plc [2001] 3 All E.R. 784, CA, noted in para.3.10.4) a distinction must be drawn between: (a) making an application which contains an er- ror (as occurred in Steele); and (b) erroneously not making an application at all (as occurred in Vinos).
Rectifying procedural errors other than errors as to the service of claim forms
Under r.3.10(b) the court has the power to remedy errors of procedure which occur in the conduct or defence of any claim if persuaded that it is just to do so. This power must be exercised in accordance with the overriding objective of dealing with cases justly and at proportionate cost (r.1.1(1)). There are three possible lines the court may take in order to remedy a procedural error; the court may: (i) invalidate (i.e. cancel the effect of) any step, document or order made which is irregular; (ii) make orders or directions on such terms as the court thinks fit in order to correct the error and compensate parties for any injustice it has caused; or (iii) simply waive the error: declar- ing a step, document or order which is irregular, to be valid despite its irregularity because, for example, it has caused no unfairness.
An order under r.3.10 which declares a step, document or order to be invalid because of some procedural error is akin to an order under r.3.4(2)(c) (an order striking out a statement of case where there has been a failure to comply with a rule, practice direction or order, as to which, see para.3.4.18). In Walsham Chalet Park Ltd v Tallington Lakes Ltd [2014] EWCA Civ 1607; [2015] C.P. Rep. 15, the Court of Appeal held that, when considering whether to make an order under r.3.4(2)(c), the court is entitled to have regard to the Denton principles (which apply to applications under r.3.9; and see further, para.3.9.3). Thus, save as explained below, when considering whether to invalidate, correct or waive any irregularity, the court might first consider whether the procedural error in question was serious or significant, then consider why the error occurred and, if appropri- ate, then take into account all the circumstances of the case including: (a) the need for litigation to be conducted efficiently and at proportionate cost; and (b) the importance of compliance with rules, practice directions and court orders.
The court is likely to invalidate any irregular step, document or order if the error affecting is such as to justify a striking out under r.3.4(2)(c).
If an error has caused prejudice to another party but is not such as to justify a striking out under r.3.4(2)(c), the court may take the middle course of declaring the step, document or order irregular but then making orders or directions on such terms as the court thinks fit in order to cor-
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rect the error and compensate parties for any injustice caused. Such an order is akin to an order under r.3.1(3) (a case management order which imposes conditions and specifies the consequences of failure to comply with the order or condition (see further, para.3.1.14)). Note also r.3.1(5): the court’s power to order a party to pay a sum of money into court if that party has, without good reason, failed to comply with a rule, practice direction or a relevant pre-action protocol.
An order under r.3.10 which simply waives the error is likely to be made in cases in which the defect is neither serious nor significant and has had no prejudicial effect on the other party.
Errors which are remedied by correction or waiver are ones which do not disrupt the case in hand or litigation generally. In rectifying them the court refuses to place reliance upon form over substance (Integral Petroleum SA v SCU-Finanz AG [2014] EWHC 702 (Comm), Popplewell J at [37]).
In Reddy v General Medical Council [2012] EWCA Civ 310, it was held that, where a party, intend- ing to initiate an appeal, uses a form other than the appropriate prescribed form, and the form used contains all the necessary information and could fairly be construed as informing the court and the respondent that by filing it at the court the party intends to commence appeal proceedings, that error could be treated as a procedural error capable of being remedied under r.3.10. In LD Commodities Rice Merchandising LLC v Owners and/or Demise Charterers of the Styliani Z [2015] EWHC 3060 (Admlty); [2016] 1 Lloyd’s Rep. 395, Teare LJ held that the inadvertent issue of an in personam claim form, when an in rem claim was intended, was an error of procedure which could be remedied by the court under r.3.10.
In Thompson v Reeve, 20 March 2017, unrep., Master Yoxall held that r.3.10 could be used to remedy a defect in the method of service of a Part 36 withdrawal notice (service by email where the opponent had not indicated a willingness to accept service by email). The court accepted that Pt 36 was a self-contained code. However, it was not completely freestanding as shown by the fact that the respondents themselves had relied on an outside rule, r.6.20, to submit that service was irregular.
In Ealing LBC v Persons Unknown [2021] EWHC 2132 (QB) the claimant issued proceedings and applied for an interim injunction but failed to apply for an order for service by an alternative method. Provision was made for such service in para.1 of the order granting an interim injunction but that part of the order had not been drawn to the judge’s attention and was itself irregular in that it failed to specify the date upon which the claim form would be deemed to be served and failed to specify the period for filing an acknowledgment of service. Steps to effect service in the manner described by the order were taken. Subsequently the claimant applied for an order waiving the irregularities in para.1 of the order and validating the steps to effect service taken under it. Dismissing the application, Nicklin J distinguished Steele on the basis that the claimant had made neither a formal application nor an oral application for order for service by an alternative method. The terms of para.1 of the order appeared to have been included, not as a result of any conscious decision-making after argument, but by default. Thus, the circumstances were more akin to Vinos, “erroneously making no application at all” ([26]–[28]). Alternatively, if the court did have jurisdic- tion to correct the defects in para.1 of the order it would not be appropriate to do so. The steps taken pursuant to that paragraph could not have brought the proceedings to the attention of the very large number of people who fell within the definition of persons unknown in this case. Thus, had an application actually been made for an order for alternative service specifying those steps, it would have been refused ([31] and [32]).
In Pitalia v NHS Commissioning Board [2022] EWHC 1636 (QB), C purported to serve a sealed copy of the claim form on D after the time limit allowed for such service (see r.7.5) had expired. D promptly lodged an acknowledgment of service and, a few days later, applied for an order under r.3.4(2)(c) setting aside the claim form for non-compliance with r.7.5. C submitted that D’s applica- tion was not an application made under CPR r.11(1) (an application for an order declaring that the court has no jurisdiction to try the claim) and therefore D had accepted the jurisdiction of the court and thereby waived the right to challenge the procedural validity of the claim (see CPR r.11(5)). D’s application had been made within the time limit for an application under CPR r.11(1) and had sought an order which can be made on such an application (the setting aside of the claim form; r.11(6)) but did not refer to CPR r.11(1) and did not seek the primary order usually made on such an application (a declaration that the court has no jurisdiction). HH Judge Pearce held that these errors were errors of form, not substance, which the court should rectify by the exercise of its power under r.3.10.
Court’s powers to rectify errors concerning the service of claim forms
The CPR contain three provisions relevant to the remedying of errors such as the defective service or late service of claim forms: r.6.15(2) (retrospective validation of service by an alternative method); r.6.16 (an order dispensing with service); and r.7.6(3) (an order granting retrospectively an extension of time for service). It is now clearly established that these specific provisions cannot be circumvented by an application under the general provision in r.3.10.
In Vinos v Marks & Spencer Plc [2001] 3 All E.R. 784 the claim form had not been issued until a few days before the expiry of the relevant limitation period and, by oversight, was not served until nine days after its period of validity for service had expired. The Court of Appeal upheld the lower court’s ruling that r.3.10 did not apply. Rule 7.6(3) limited the court’s power to extend the time for serving the claim form in this case “only if” the stipulated conditions are fulfilled, which they were not. The court’s general power to extend time periods (r.3.1(2)(a)) did not apply because of its introductory words “except where these rules provide otherwise”.
3.10.4
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(2)
A practice direction may set out—
-
(a) the circumstances in which the court has the power to make a civil
restraint order against a party to proceedings;
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(b) the procedure where a party applies for a civil restraint order
against another party; and
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(c) the consequences of the court making a civil restraint order.
SECTION A CIVIL PROCEDURE RULES 1998
3.11
3.11.1
“The general words of Rule 3.10 cannot extend to enable the court to do what rule 7.6(3) specifically forbids, nor to extend time when the specific provision of the rules which enables extensions of time specifically does not extend to making this extension of time. What Mr Vinos in substance needs is an extension of time—calling it correcting an error does not change its substance” (May LJ at [20]).
In Boxwood Leisure Ltd v Gleeson Construction Services Ltd [2021] EWHC 947 (TCC) (O’Farrell J) the claimant’s solicitors’ first attempt to serve the proceedings was sent, by letter, to the correct ad- dress, within the time for service, but that letter referred only to the service of the particulars of claim and a response pack and did not refer to or include a copy of the claim form. This mistake was not remedied within the deadline for service. The claimant’s application for (amongst other things) an order pursuant to rr.3.10, 1.2 and 3.1(2)(m) exercising the court’s general powers to rectify an error of procedure was dismissed (see especially [48]–[51]).
In Ideal Shopping Direct Ltd v Mastercard Inc [2022] EWCA Civ 14, C sent sealed copies of 14 dif- ferent claim forms to D for the purpose of information only. In each case, extensions of time for service were agreed pending a decision by the Supreme Court in linked proceeding. That decision was published more than four weeks before the final date for service. In the light of that decision C decided to amend the claim forms before service. The amended forms were filed electronically via the CE-File on the last day for service. In respect of all 14 cases C sent unsealed copies of the claim forms to D, hours after receiving from the court the automatic notifications acknowledging submission. One of the claim form also achieved Acceptance on that day but the others did not achieve Acceptance for another three or five days. At first instance Morgan J held that the service of unsealed copies of the claim forms was irregular and refused to make orders rectifying this er- ror under rr.6.15(2), 6.16 or 3.10. C appealed the rulings as to irregularity and as to r.3.10 (no ap- peal being made as to the rulings as to rr.6.15(2) or 6.16). The Court of Appeal dismissed the appeal.
“[146] ... the appellants are asking the Court to do the very thing which Vinos and the line of authority which follows it does not permit. The general provision in rule 3.10 cannot be used to override a specific provision, here rule 6.15 or rule 6.16. The appellants could not satisfy the ‘good reason’ or ‘exceptional circumstances’ criteria under those two rules and they are not permitted to use rule 3.10 to bypass the requirements of those specific provisions. Likewise, since the appellants could not have satisfied condition (b) of rule 7.6(3), as they could not have shown that they had taken all reasonable steps to comply with rule 7.5 or that they had been unable to do so, they cannot be permitted to use rule 3.10 to bypass the requirements of rule 7.6(3)” (Sir Julian Flaux C).
This decision settled a long running controversy as to the breadth of the court’s powers under r.3.10 which had led to a plethora of conflicting High Court cases concerning irregularities in the service of claim forms. The Court of Appeal cited with approval the decisions in Piepenbrock v As- sociated Newspapers Ltd [2020] EWHC 1708 (QB) (the decision which Morgan J had followed in this case) Boxwood (noted above) and Serbian Orthodox Church v Kesar & Co [2021] EWHC 1205 (QB). Whilst other High Court cases on this point (including Bank of Baroda, GCC Operations v Nawany Marine Shipping FZE [2016] EWHC 3089 (Comm), Dory Acquisitions Designated Activity Co v Frangos [2020] EWHC 240 (Comm) and Citysprint UK Ltd v Barts Health NHS Trust [2021] EWHC 2618 (TCC)) “may be correct on their own particular facts, they should not be followed in relation to the scope of rule 3.10” ([153]).
Orders restraining civil proceedings1
3.11—(1) A “civil proceedings order” and an “all proceedings order” under section 42(1A) of the Senior Courts Act 1981 shall include provision for ap- plying to begin, continue or make any application in any civil proceedings.
Civil restraint orders (CROs)
This rule was added to Pt 3 by the Civil Procedure (Amendment No.2) Rules 2004 (SI 2004/ 2072) and came into effect on 1 October 2004. The Civil Procedure (Amendment No.2) Rules 2022 (SI 2022/783) amended the original heading to the rule to the heading shown above, inserted r.3.11(1) and numbered the subsequent text as r.3.11(2). The rule puts on to a statutory basis the court’s inherent jurisdiction to prevent abuse of its process, as explained by the Court of Appeal in Bhamjee v Forsdick (Practice Note) [2003] EWCA Civ 1113; [2004] 1 W.L.R. 88, CA. Rule 2.3
1 Amended by the Civil Procedure (Amendment No.2) Rules 2022 (SI 2022/783).
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(Interpretation) states that “civil restraint order” means an order restraining a party (a) from mak- ing any further applications in current proceedings (a “limited civil restraint order” [or “limited CRO”]), (b) from issuing any further applications or making certain applications in specified courts (an “extended civil restraint order” [or “ECRO”]), or (c) from issuing any claim or making any application in specified courts (a “general civil restraint order” [or “GCRO”]).
The underlying feature of all cases in which a CRO is made is that the person restrained has repeatedly made applications or issued claims which are totally without merit. In this context the term “totally without merit” refers to an application or claim in respect of which no rational argu- ment was or could have been raised (R. (Wasif) v Secretary of State for the Home Department [2016] EWCA Civ 82; [2016] 1 W.L.R. 2793, CA). A claim or application may be held to be “totally without merit” even if it was not abusive, made in bad faith, or supported by false evidence or documents. However, evidence of such misconduct will reinforce the case for a civil restraint order (Sartipy v Tigris Industries Inc [2019] EWCA Civ 225 at [27]).
Other rules in the CPR place obligations upon the court which may later assist parties in proving a pattern of abusive conduct. Rule 3.4(6) provides that whenever a court strikes out a claimant’s statement of case and considers that the claim is totally without merit, the court’s order must record that fact and the court at the same time consider whether it is appropriate to make a CRO. Similar duties are imposed on courts striking out or dismissing interim applications or appeals which they consider to be totally without merit (rr.23.12 and 52.20(5) and (6)). These records are of course binding upon the person restrained, unless successfully appealed. Thus they are ef- fectively conclusive and subsequent courts should not permit argument as to whether the applica- tions were in fact totally without merit (Re Glass Slipper Live Events – Event 1 Ltd [2020] EWHC 942 (Ch) (Pickering QC)).
A limited CRO restrains the person against whom it is made from making applications in the proceedings in which the order is made and remains in force for the duration of those proceed- ings, unless the court otherwise orders (PD 3C para.2.9). An ECRO restrains the person against whom it is made from issuing claims or making applications, in any court identified in the order, which are directly or indirectly linked to the proceedings in which the order is made (PD 3C para.3.2). A GCRO restrains the person against whom it is made from issuing any claims or making any applications in any court identified in the order; the restraint imposed by a GCRO covers all claims and applications, whether or not they are linked to the proceedings in which the order is made (PD 3C para.4.2). ECROs and GCROs remain in force for a specified period not exceeding two years (PD 3C paras 3.9 and 4.9) but may subsequently be extended for periods of not more than two years each (see further, para.3.11.7).
Because they extend beyond the original proceedings, an ECRO and a GCRO also restrain the party against whom the order was made from making claims or applications in proceedings covered by the order against persons who were not parties in the original claim (Couper v Irwin Mitchell LLP [2017] EWHC 3231 (Ch); [2018] 4 W.L.R. 23, noted in para.3.11.5).
The court’s jurisdiction in respect of CROs is different from the jurisdiction it obtains from the Senior Courts Act 1981 s.42 (see Vol.2 para.9A-148) under which, on the application of the At- torney General, the High Court may make a “civil proceedings order” (or an “all proceedings order”) preventing the person against whom it is made from instituting or carrying on proceedings without the leave of the court. Unless the court otherwise orders, an order under s.42 remains in force indefinitely. In Attorney General v Perrotti [2006] EWHC 1002 (Admin), an order under s.42 of the Senior Courts Act 1981 was made in circumstances where ECROs and GCROs had been inef- fective, making it appropriate to impose a restraint indefinitely.
Any party to any proceedings governed by the CPR who wishes to make an application for a CRO against another party must use the Pt 23 procedure, unless the court otherwise directs (para.3CPD.1). The application must specify the type of CRO sought (para.3CPD.2).
An application for a limited CRO may be made to any judge of the High Court or County Court in which the claim is proceeding, including Masters and district judges. An application for an ECRO or a GCRO can be made only to a Court of Appeal judge, a High Court judge or a designated civil judge (see PD 3C paras 2.7, 3.1 and 4.1), and, if necessary, the proceedings must be transferred accordingly (see PD 3C paras 3.11 and 4.11). A CRO may also be made by a court acting on its own initiative. Model forms of order for each type of CRO are annexed to the Practice Direction (respectively, Forms N19, N19A and N19B).
It may be appropriate to take committal proceedings for contempt of court against a party subject to a CRO who repeatedly seeks to issue proceedings in breach of the order, for example, by bringing claims in the names of other people (HM Solicitor General v Ellis [2020] EWHC 2727 (QB)).
Threshold requirements for each type of CRO
Practice Direction 3C para.2.1 provides that a limited CRO cannot be made unless the respond- ent to the application is a party who has made two or more applications which are “totally without merit” (as to the meaning of this term, see para.3.11.1).
The threshold requirement for an ECRO is proof that the party against whom it is sought “has persistently issued claims or has made applications which are totally without merit” (PD 3C para.3.1). Proof of three unmeritorious claims or applications has been described as the bare
3.11.2
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minimum needed to constitute persistence (Re Ludlam (A Bankrupt) [2009] EWHC 2067 (Ch)). The restraint imposed by an ECRO affects claims and applications “concerning any matter involving or relating to or touching upon or leading to the proceedings in which that order was made” in any court identified in the order (PD 3C para.3.2). Because the restraint is linked to “the proceedings in which that order was made” an application for an ECRO has to be made in those proceedings and not by way of a stand-alone application (Reelworld Europe Ltd v Uddin [2021] EWHC 535 (QB)). An ECRO made by a Court of Appeal judge may restrain the issuing of claims or the making of applications in the Court of Appeal, the High Court or the County Court. An ECRO made by a High Court judge may restrain the issuing of claims or the making of applications in the High Court or the County Court. An ECRO made by a designated civil judge or their appointed deputy may restrain the issuing of claims or the making of applications in every County Court hearing centre (PD 3C para.3.2).
In Sartipy v Tigris Industries Inc [2019] EWCA Civ 225; [2019] 1 W.L.R. 5892, the Court of Ap- peal gave guidance on the requirements for making an extended civil restraint order under PD 3C para.3.1:
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In the course of any proceedings one or more applications may be issued. If an earlier claim issued by the person against whom the order is made was, itself, totally without merit and if individual applications made within that claim were also totally without merit, there is no reason why both the claim and individual applications should not be counted for the purpose of considering whether to make an ECRO in the course of a subsequent claim.
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Although at least three claims or applications are the minimum required for the making of an ECRO, the question remains whether the party concerned is acting “persistently”. That will require an evaluation of the party’s overall conduct. It may be easier to conclude that a party is persistently issuing claims or applications which are totally without merit if it seeks repeatedly to re-litigate issues which have been decided than if there are three or more unrelated applications many years apart. The latter situation would not necessarily constitute persistence.
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Only claims where the party in question is the claimant (or counterclaimant) and only ap- plications where the party in question is the applicant can be counted. A defendant or respondent may behave badly, for example by telling lies in his or her evidence, producing fraudulent documents or putting forward defences in bad faith. However, that does not constitute issuing claims or making applications for the purpose of considering whether to make an ECRO. Nevertheless such conduct is not irrelevant as it is likely to cast light on the party’s overall conduct and to demonstrate, provided that the necessary persistence can be demonstrated by reference to other claims or applications, that an ECRO or even a GCRO, is necessary.
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When considering whether to make a restraint order, the court is entitled to take into ac- count any previous claims or applications which it concludes were totally without merit, and is not limited to claims or applications which were so certified at the time; R. (Kumar) v Secretary of State for Constitutional Affairs [2006] EWCA Civ 990; [2007] 1 W.L.R. 536, CA followed.
In Society of Lloyd’s v Noel [2015] EWHC 734 (QB); [2015] 1 W.L.R. 4393, Lewis J, it was held that when a court was considering whether it had the power to grant an ECRO, and in particular whether a party had persistently issued claims or made applications which were totally without merit, it was entitled to have regard to all such claims and applications, including those which had been made prior to the making of an earlier ECRO.
The threshold requirement for a GCRO is proof that the party against whom it is sought is someone who “persists in issuing claims or making applications which are totally without merit, in circumstances where an extended civil restraint order would not be sufficient or appropriate” (PD 3C para.4.1). In Chief Constable of Avon and Somerset v Gray [2019] EWCA Civ 1675 the Court of Ap- peal cited with approval the test for the grant (or extension) of a GCRO stated by Stuart-Smith J from whose order it was hearing an appeal (and see further, para.3.11.7).
“In briefest outline, the question either on an original application for a GCRO or on an ap- plication for an extension is whether an order (or its extension) is necessary in order (a) to protect litigants from vexatious proceedings against them and/or (b) to protect the finite resources of the Court from vexatious waste. This question is to be answered having full regard to the impact of any proposed order upon the party to be restrained.”
A GCRO made by a Court of Appeal judge may restrain the issuing of claims or the making of applications in the Court of Appeal, the High Court or the County Court. A GCRO made by a High Court judge may restrain the issuing of claims or the making of applications in the High Court or the County Court. A GCRO made by a designated civil judge or their appointed deputy may restrain the issuing of claims or the making of applications in every County Court hearing centre (PD 3C para.4.2). The restraint imposed upon the party against whom a GCRO is made af- fects all claims and all applications in the relevant courts (PD 3C para.4.2). In R. (Kumar) v Secretary of State for Constitutional Affairs [2006] EWCA Civ 990; [2007] 1 W.L.R. 536, CA, the Court of Ap- peal stated that the court’s power to make GCROs is apt to cover a situation in which a litigant adopts:
“...a scattergun approach to litigation on a number of different grievances without necessarily
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exhibiting such an obsessive approach to a single topic that an extended CRO can ap-
propriately be made against him/her.”
An application for a limited CRO may be made to any judge of the High Court or County Court
in which the claim is proceeding, including Masters and district judges. An application for an ECRO or a GCRO can be made only to a Court of Appeal judge, a High Court judge or a designated civil judge (see PD 3C paras 2.7, 3.1 and 4.1), and, if necessary, the proceedings must be transferred accordingly (see PD 3C paras 3.11 and 4.11). A judge authorised to sit as a High Court judge under s.9 of the Senior Courts Act 1981 (Vol.2 para.9A-30) has jurisdiction to grant an ECRO (Middlesborough Football and Athletic Co (1986) Ltd v Earth Energy Investments LLP [2019] EWHC 226 (Ch)) and therefore, by parity of reasoning, jurisdiction to grant a GCRO. A contrary view was considered but not decided in Ingeus UK Ltd v Wardle [2021] EWHC 1268 (QB); in that case, the point was not fully argued and Middlesborough was not cited.
A CRO may also be made by a court acting on its own initiative. Model forms of order for each type of CRO are annexed to the practice direction (respectively, Forms N19, N19A and N19B).
In Howell v Evans [2020] EWHC 2729 (QB) a GCRO was made against the claimant which also restrained him from issuing any claim or application as the litigation friend or trustee of his son, or otherwise on behalf of, his son ([26]).
CROs made against a non-party
In 2001 and 2003, before r.3.11 was implemented, the Divisional Court of the King’s Bench Division held that it had jurisdiction to make orders prohibiting a person from “acting as a Litiga- tion Friend or a McKenzie Friend or from nominating members of his family to act on his behalf in [proceedings specified in the Order]” (Ex p. Purvis [2001] EWHC 827 (Admin), [18]–[19]; and Attorney General v Purvis [2003] EWHC 3190 (QB), [30]–[31] (transcript available on bailii)).
The meaning of the term “party” in PD 3C is wide enough to include a person who was the real party behind the unmeritorious claims or applications even if he or she was not a named party in any of those proceedings (CFC 26 Ltd v Brown Shipley & Co Ltd [2017] EWHC 1594 (Ch); [2017] 1 W.L.R. 4589 approved by the Court of Appeal in Sartipy v Tigris Industries Inc [2019] EWCA Civ 225).
In Hurst v Denton-Cox [2011] 2 WLUK 736 (Proudman J) an ECRO was made against the claimant’s husband (who was added as a party for that purpose); the husband had been the driving force behind a long history of litigation without merit and there was a risk of further litigation be- ing taken against the present defendant. The husband had frequently made applications which were totally without merit. It was immaterial that he had never brought such claims against the present defendant. In Adelaja v Islington LBC [2019] EWHC 1295 (QB) ECROS were made against both a husband and wife. It was clear that the husband was the driving force behind the various claims and applications and it was necessary and proportionate to make an order against him. The claims had been commenced in both names and there was evidence that the wife had been assessed as lacking capacity to conduct litigation and had signed various forms under pressure from her husband. Whilst she may lack litigation capacity, the wife did have sufficient capacity to understand the order.
In Sartipy v Tigris Industries Inc [2019] EWCA Civ 225; [2019] 1 W.L.R. 5892 the Court of Ap- peal ruled that, where a named party (X) allows another person (Y) the use of his or her name to issue claims or make applications which are totally without merit, an ECRO may be made against X notwithstanding that he or she is personally innocent of any misconduct or even ignorant of the claims or applications which Y ( the “real” party) has been making. By permitting his or her name to be used, X takes responsibility for the conduct of Y. However, that responsibility does not extend to other totally without merit claims or applications made by Y solely in the name of Y.
CROs in aid of inferior courts and tribunals
The jurisdiction of the High Court under CPR r.3.11 to make a CRO only applies to Court of Appeal, High Court and County Court proceedings: “the court” could not be interpreted as mean- ing a tribunal such as the employment tribunal. However, where an inferior court had no jurisdic- tion to make a restraint order, the High Court had the power to assist the inferior court by making a GCRO under its inherent jurisdiction; Law Society v Otobo [2011] EWHC 2264 (Ch) (Proudman J). Otobo was followed in Nursing and Midwifery Council v Harrold [2015] EWHC 2254 (QB); [2016] I.R.L.R. 30 by Hamblen J and by Laing J at [2016] EWHC 1078 (QB). In Law Society of England & Wales v Sheikh [2018] EWHC 1644 (QB), the defendant sought to circumvent various GCROs by bringing proceedings in the employment tribunal; Jay J (applying the decisions in Nursing and Midwifery Council, above) held that the High Court had an inherent jurisdiction to use its coercive, injunctive powers to prevent a vexatious litigant from litigating in an inferior tribunal without reasonable cause; that there was also power to grant an injunction under the Senior Courts Act 1981 s.37 where it appeared to the court to be just and convenient to do so; and that the High Court also had jurisdiction to order the defendant to apply to the employment tribunal to withdraw her claims.
Effect of CROs on the future conduct of proceedings
Every CRO must identify the claims and courts to which it applies and must identify the judge (usually a High Court judge or a senior circuit judge) to whom applications for permission must be made. Details about CROs are entered onto a public website: https://www.gov.uk/guidance/civil-restrai nt-orders--2.
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The party against whom a CRO is made has an unfettered right to apply for permission to ap- peal against the CRO and, if granted, may bring such an appeal. Subject thereto, they cannot take the restrained steps without first giving the intended opponent at least seven days’ written notice of their intention to do so (PD 3C paras 2.4, 3.4 and 4.4) and must then make a written application for the permission of the judge identified in the order (PD 3C paras 2.6, 3.6 and 4.6). That written application must be accompanied by any written response received from the opponent and must set out the nature and grounds of the application. The court fee for this application (Fee 1.8 or Fee 2.5(a)) must be paid in full before the permission is sought. At this stage no application for fee remission will be entertained. If permission is refused no refund of the fee will be made. If permission is granted the applicant will be entitled to be refunded the difference between the fee paid and the fee that would have been payable had the applicant not been subject to a CRO (Civil Proceedings Fees Order 2008 (SI 2008/1053) Sch.2 paras 1.1 and 19). In Chief Constable of Avon and Somerset v Gray [2019] EWCA Civ 1675 the Court of Appeal concluded that the need for payment of a fee was not, in that case, an unfair burden upon the applicant’s access to justice; Irwin LJ also indicated that the non-return of a court fee paid for an unsuccessful application for permission could represent a legitimate deterrent to the making of such applications (see [37] to [41]).
The specified judge will deal with any application for permission on paper only (i.e. without a hearing). Similarly, applications for permission to appeal against a refusal of permission are dealt with on paper only. If the party restrained repeatedly makes applications to the judge monitoring them, further restrictions can be made (PD 3C paras 2.3, 3.3 and 4.3); for example, injunctive relief may be granted banning that party from entering court buildings or contacting judges or court staff by email, telephone or fax.
Steps taken without the necessary permission are automatically struck out or dismissed without any further order and without any opposing party having to respond to them. In Couper v Irwin Mitchell LLP [2017] EWHC 3231 (Ch); [2018] 4 W.L.R. 23, in 2013, C’s claim against X was dismissed. In 2016 C commenced a professional negligence claim against their former solicitors in the claim against X. In 2017 an ECRO was made against C in respect of any new claims or applica- tions which were linked to C’s claim against X. Later in 2017 C commenced a professional negligence claim against C’s barrister in C’s claim against X. On an application made by the bar- rister, Arnold J held that the 2017 claim against the barrister had been issued in breach of the ECRO and had therefore been automatically struck out. On applying the Denton principles (see para.3.9.3), it was not appropriate to grant C relief from sanctions. However, it was still open to C to apply for permission to issue a new claim against the barrister. On an oral application which C made for such permission (the hearing of which the barrister did not resist) C was permitted to is- sue a new claim (i.e. a second claim) against the barrister.
A GCRO catches “any application” in the specified courts, save applications which are expressly excluded by the terms of the order. Thus, if the party against whom the order has been made is committed to prison for contempt of court, an application to purge the contempt must, unless the GCRO otherwise provides, be preceded by a written application for the permission of the specified judge, seven days’ notice having been given to the relevant parties (Hussain v Vaswani [2021] EWCA Civ 146).
Applications to discharge CROs
A limited CRO will remain in force for the duration of the proceedings in which it is made, un- less the court otherwise orders (PD 3C para.2.9). ECROs and GCROs remain in force for a speci- fied period not exceeding two years (PD 3C paras 3.9 and 4.9) but may subsequently be extended for periods of not more than two years each (see further, para.3.11.7).
In respect of any CRO either party may apply for an amendment or discharge of the order. However, the party against whom the CRO was made cannot apply for the amendment or discharge of the CRO without first obtaining the permission of a judge identified in the order (PD 3C paras 2.2, 3.2 and 4.2). In Middlesbrough Football and Athletic Co (1986) Ltd v Earth Energy Investments LLP (In Liquidation) [2019] EWHC 226 (Ch); [2019] 1 W.L.R. 3709, Sir Geoffrey Vos C held that the grounds for discharging an ECRO were the same grounds as apply on an application under r.3.1(7), namely a material change of circumstances since the order was made and the facts having been misstated to the judge who made the order.
Applications to extend ECROs and GCROs
ECROs and GCROs remain in force for a specified period not exceeding two years (PD 3C paras 3.9 and 4.9) but may subsequently be extended for periods of not more than two years each (PD 3C paras 3.10 and 4.10). Whilst PD 3C states detailed threshold requirements for the grant of an original ECRO or GCRO (see para.3.11.2) an applicant for an extension of that order for a further period need only show that an extension is “appropriate” (PD 3C paras 3.10 and 4.10). In Chief Constable of Avon and Somerset v Gray [2019] EWCA Civ 1675, the Court of Appeal, whilst reversing an order made by Stuart-Smith J on other grounds, approved the learned judge’s decision as to the tests to be applied on the grant or extension of a GCRO:
“14. The test for imposing a GCRO is stated by [4.1] of PD 3C to be that ‘the party against whom the order is made persists in issuing claims or making applications which are totally without merit, in circumstances where an extended civil restraint order would not be sufficient or appropriate’ ...
15. The test when the Court is asked to extend a GCRO pursuant to [4.10] of PD 3C is dif- ferent and is that the Court ‘considers it appropriate’ to do so. That test must be read in the light of the criteria for imposing a GCRO in the first place, since the restriction
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upon the party’s right to bring litigation is the same during the original term of a GCRO or during its extension. In briefest outline, the question either on an original ap- plication for a GCRO or on an application for an extension is whether an order (or its extension) is necessary in order (a) to protect litigants from vexatious proceedings against them and/or (b) to protect the finite resources of the Court from vexatious waste. This question is to be answered having full regard to the impact of any proposed order upon the party to be restrained. The main difference between an original applica- tion for a GCRO and an application for an extension is that, on an application for an extension, the respondent will have been restrained from bringing vexatious proceed- ings during the period of the existing GCRO.”
An extension of an ECRO or a GCRO may be granted if, during the period between the original grant of the order and the application for its extension, the party against whom the order was made has taken steps indicating a willingness to persist in unmeritorious litigation; for example multiple unsuccessful applications to the judge monitoring the CRO, or multiple breaches of the CRO (and see also the alleged misconduct complained of in Sheikh v Page [2017] EWHC 1772 (QB) and in Chief Constable of Avon and Somerset v Gray [2019] EWCA Civ 1675). For a case in which an application for an extension was refused, see G4S Care & Justice Services (UK) Ltd v Knights [2019] EWHC 2934 (QB) (shortly after the expiry of an ECRO made against him, D intimated a claim he wished to bring against C; Yip J refused C’s application for an extension. Although, in the light of the history of the case, there would be a relatively low threshold for granting an extension, the learned judge was not satisfied that the case D wished to bring was totally without merit. Also D had not made any further claims since the last order and so had not persisted in making claims or applications).
In Ghassemian v Chatsworth Court Freehold Co Ltd; Sartipy v Tigris Industries Inc [2019] EWHC 3646 (Ch) (Birss J) it was held that there was no fetter on the court’s jurisdiction to grant an exten- sion of an ECRO after it had expired, although the fact of the expiry was a relevant factor to be considered. If an extension was granted, the two-year period would run from the date of expiry of the original order or its last extension, not from the date of the current hearing.
Whether or not an earlier CRO has expired more than two years previously, the court always has jurisdiction to make a fresh CRO if it is evident that, unless a restraint is imposed, the respondent will continue to issue claims or applications that are wholly without merit (Ingeus UK Ltd v Wardle [2021] EWHC 1268 (QB)).
II. Costs Management
Application of this Section and the purpose of costs management1
3.12—(1) This Section and Practice Direction 3D apply to all Part 7 multi- 3.12 track cases, except—
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(a) where the claim is commenced on or after 22nd April 2014 and the amount of money claimed as stated on the claim form is £10 million or more; or
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(b) where the claim is commenced on or after 22nd April 2014 and is for a monetary claim which is not quantified or not fully quanti- fied or is for a non-monetary claim and in any such case the claim form contains a statement that the claim is valued at £10 million or more; or
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(c) where in proceedings commenced on or after 6th April 2016 a claim is made by or on behalf of a person under the age of 18 (a child) (and on a child reaching majority this exception will continue to apply unless the court otherwise orders); or
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(d) where the proceedings are the subject of fixed costs or scale costs; or
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(e) the court otherwise orders.
(1A) This Section and Practice Direction 3D will apply to any other
proceedings (including applications) where the court so orders.
(2) The purpose of costs management is that the court should manage both
the steps to be taken and the costs to be incurred by the parties to any proceed-
ings (or variation costs as provided in rule 3.15A) so as to further the overrid-
ing objective.
1 Introduced by the Civil Procedure (Amendment) Rules 2013 (SI 2013/262) and amended by the Civil Procedure (Amendment No.4) Rules 2014 (SI 2014/867), the Civil Procedure (Amend- ment) Rules 2016 (SI 2016/234), the Civil Procedure (Amendment No.3) Rules 2020 (SI 2020/ 747) and the Civil Procedure (Amendment No.2) Rules 2022 (SI 2022/783).
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Editorial note
This rule was amended by the Civil Procedure (Amendment No.2) Rules 2022 (SI 2022/783) to replace references to CPR PD 3E with references to CPR PD 3D. CPR PD Update 149 (July 2022) deleted the original PD 3D. CPR PD Update 152 renumbered the subsequent PDs as PD 3E and PD 3F.
Editorial introduction
Section II and PD 3D (Costs Management) were first implemented in April 2013 and were based on the recommendations made in the Review of Civil Litigation Costs: Final Report (December 2010). They built on the experience gained in operating the defamation proceedings costs management pilot scheme (PD 51D) and the costs management in Mercantile Courts and Technology and Construction Courts pilot scheme (PD 51G). The claims to which r.3.12 originally applied and the several variations to the rule which were made in 2013 and 2014 and some transitional provisions thereto, are summarised in the 2015 edition of the White Book.
In April 2016 amendments were made to r.3.12 by the Civil Procedure (Amendment) Rules 2016 (SI 2016/234) which made some additions to the list of cases excluded from these rules un- less the court otherwise orders (as to this, see further, para.3.12.3). In April 2017, rr.3.15 and 3.18 were amended by the Civil Procedure (Amendment) Rules 2017 (SI 2017/95) and PD 3D was amended by CPR Update 88 (February 2017). The amendments to these rules were made to nega- tive some aspects of the decision of the Court of Appeal in SARPD Oil International Ltd v Addax Energy SA [2016] EWCA Civ 120; [2016] B.L.R. 301. In July 2020 amendments were made to rr.3.13, 3.15, 3.17 and 3.18 and a new rule was added (r.3.15A) by the Civil Procedure (Amend- ment No.3) Rules 2020 (SI 2020/747) as from 1 October 2020. Rule 3.15A restates the procedure to be followed on applications to vary a costs budget. This and the other amendments, take into the rules, provisions which previously appeared in the old PD 3D. At the same time a new PD 3D was published which takes in some provisions which were previously set out in a Guidance Note to Precedent H (the prescribed form of costs budget).
Costs management in outline
Rule 3.12(2) states the purpose of costs management which is that the court should manage both the steps to be taken and the costs to be incurred by the parties to any proceedings so as to further the overriding objective, namely to deal with cases justly and at proportionate cost (see further, r.1.1). Other rules in this section of Pt 3 set out the procedures by which this purpose may be achieved.
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(i) In most Pt 7 multi-track claims, parties who are legally represented are required to file and exchange budgets prior to the first case management conference (“CMC”; for the exceptions, see r.3.12(1), and para.3.12.2).
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(ii) The form of budget to be used is prescribed (PD 3D para.3(a), and see para.3.12.4). A deadline for filing budgets is set (r.13.3(1)).
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(iii) Parties who fail to file a required budget in time will be heavily penalised in the costs they may later recover (r.3.14).
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(iv) Prior to the first CMC the parties are required to file and exchange “budget discussion reports” which indicate, in respect of each phase of each budget, whether the sum of costs claimed is agreed and, if not, a brief summary of why they are not agreed (r.3.13(2) and PD 3D para.11).
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(v) At the first CMC the court will usually make a costs management order (“CMO”; r.3.15(2)). Such an order will record the extent (if any) to which the parties have agreed any of the costs and, in respect of costs to be incurred after the date of the first budget, will record the amounts of those costs which the court has approved, having considered and if necessary, revised the budgets in question (r.3.15(2)).
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(vi) Thereafter the court will control the parties’ budgets in respect of recoverable costs and will not make any case management decision without fully considering its costs implica- tions (r.3.17(1)).
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(vii) Once a CMO has been made, each party must actively reconsider its budget and, if a significant development warrants the making of a revision, upwards or downwards, must promptly seek such a revision either by agreement with other parties or with the ap- proval of the court (r.3.15A).
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(viii) Applications to the court about costs budgets should, if practicable, be conducted by telephone or in writing unless they are combined with an application for other direc- tions for which a court hearing has been convened (r.3.16(2)).
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(ix) All approvals and agreements as to budgets and revised budgets must be recorded in an order of the court (rr.3.13(3), 3.15(2) and 3.15A(5)).
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(x) Whenever a party’s budget or revised budget has been agreed or approved that party must re-file and re-serve it, with the arithmetic appropriately re-cast and attaching a copy of the order approving it or recording the parties’ agreement (r.3.15(7)).
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(xi) At the end of the proceedings, the recoverable costs of the winning party will be assessed in accordance with the last agreed or approved budget (r.3.18).
Cases to which Pt 3 Section II applies
Legally represented parties are required to file and exchange costs budgets before the first CMC in all Pt 7 multi-track cases except the following:
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(a) claims in which the amount of money claimed as stated on the claim form is £10 million or more;
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(b) claims containing a statement that the claim is valued at £10 million or more;
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(c) proceedings in which a claim is made by or on behalf of a person under the age of 18 (on that person reaching majority this exception will continue to apply unless the court
otherwise orders);
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(d) proceedings which are the subject of fixed costs or scale costs;
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(e) litigants in person;
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(f) claims proceeding in the Shorter Trials Scheme; or
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(g) proceedings in which the court otherwise orders.
As to (a) and (b) above cases commenced before 22 April 2014 are subject to the automatic costs budgeting rules (see the Civil Procedure (Amendment No.4) Rules 2014 (SI 2014/867).
As to (c) above, claims of this type commenced before 6 April 2016 are subject to the automatic costs budgeting rules (Civil Procedure (Amendment) Rules 2016 (SI 2016/234)). This exception was introduced on the recommendation of the CPRC Costs Management Sub-committee, chaired by Mr Justice Coulson as he then was. The sub-committee recommended this exception principally because of the time many such cases take to get to trial. It may take years for injuries to stabilise before a proper prognosis can be given and a trial date fixed. The sub-committee felt that budget- ing for 5–10 years is “not sensible”. Excluding these cases from costs budgeting also helps to help alleviate the delays in the listing of costs and case management cases caused by the costs budgeting process. It may be that r.46.4 (costs where money is payable by or to a child or protected party) was thought to provide sufficient control over costs to allow this exception. It does not extend to claims brought by protected parties.
As to (d) most of the rules relating to fixed costs and scale costs are set out in Pt 45.
As to (e) the exception made for litigants in person appears in the opening words of r.3.13(1). Although they are not required to file and exchange budgets unless ordered to do so (see r.3.13(3)) other represented parties are still required to serve budgets on them and are required to seek to agree budget discussion reports with them (r.3.13(2) and 3.13(6)).
As to (f) (claims proceeding in the Shorter Trials Scheme) see r.57A.3 and PD 57AB para.2.56 (para.2AA-30). In such cases, unless the parties otherwise agree, r.3.12 is disapplied and instead the court will usually make a summary assessment of any costs awarded.
As to (g) (proceedings in which the court otherwise orders) PD 3D para.1 states that, in cases where the claimant has a limited or severely impaired life expectation (five years or less remaining) the court will ordinarily disapply cost management under Section II. This provision is particularly important in mesothelioma cases with living claimants where avoiding delay in the listing of cases is of vital importance (and see further, Smith v W Ford & Sons (Contractors) Ltd [2021] EWHC 1749 (QB) (Master Davison)). Other cases in which the court may disapply r.3.12 altogether, or direct a bespoke costs management regime, are cases proceeding in the Flexible Trials Scheme (see further, PD 57AB para.3.9 (para.2AA-34)).
In an informal note, dated 1 November 2016, published by the Chancery Bar Association (http:// www.chba.org.uk/for-members/library/practice-directions-court-notices/costs-management-note) the Chief Master explained that in the Chancery Division in London a Note is sent out with the Notice of Proposed Allocation to the Multi-Track (Form N149C). The Note specifies that, unless exempted because the claim has a value in excess of £10 million or the party is a litigant in person, costs budgets must be filed with the Directions Questionnaire, draft directions, Disclosure Report and list of issues. The Note states that the parties should consider whether they wish the court to exercise its costs management powers and should notify the court in their Directions Question- naires of their views. The parties are reminded in the Note that even if they do not wish there to be costs management they must serve and file a costs budget. This reminder reflects the terms of r.3.15(2) under which the court may decide not to make a costs management order but only after costs budgets have been filed and exchanged. The Chief Master stated that normally budgets in Precedent H would be required. However, an alternative, which may be acceptable to the court where all the parties agree to seek an order that the case should be taken out the costs management regime, is for budgets to be prepared using only the first page of Precedent H, as if the claim had a value of less than £50,000 and the costs were less than £25,000.
As the rules are presently worded the following cases are also exempted from the costs manage- ment provisions of rr.3.12 and 3.13 by implication unless the court otherwise orders: all Pt 8 claims and all claims allocated to the small claims track or the fast track. As to the court’s power to bring within the costs management regime any cases falling within the exceptions (a) to (g) above or any of the cases just described as being exempted by implication, see rr.3.12(1A) and 3.13(3) and para.3.13.2.
Prescribed form of costs budget to be used
Unless the court orders otherwise, a budget must be in the form of Precedent H, which is an- nexed to PD 3D (para.4(a)). However, if the total costs (incurred and budgeted) do not exceed £25,000 or if the value of the claim as stated on the claim form is less than £50,000, the parties must only use the first page of Precedent H (PD 3D para.4(b)). On the first page the different budgeted phases of the proceedings are shown in separate lines alongside the total costs for each
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phase and the grand total for all phases. Unlike the subsequent pages, the first page does not break down the budgeted figures to show separately the sums claimed for, e.g. solicitors’ charges, counsel’s fees and other disbursements. The first page concludes with a statement of any costs claimed in respect of costs management (see further, para.3.15.4) and then a statement of truth (see further, para.3.13.5).
If the stated value of the claim exceeds £50,000 and the budgeted costs exceed £25,000, the second and subsequent pages of a budget in the form of Precedent H will show, in respect of each phase of the proceedings, separate calculations of the amount of costs budgeted in respect of each fee earner and counsel, and the hourly rate in respect of that fee earner or counsel by reference to which those amounts have been calculated. Rule 3.15(8) states that it is not the role of the court in the costs budgeting hearing to fix or approve the hourly rates claimed in the budget. The underly- ing detail in Precedent H for each phase is provided for reference purposes only to assist the court in fixing a budget (as to this, see further, para.3.18.2).
On the first page and also on subsequent pages, the amounts of costs for each phase of the budget are shown in three columns headed “Incurred”, “Estimated” and “Total”. In the first budget submitted for approval the division of costs between the “Incurred” and “Estimated” columns is obvious and straightforward, the date upon which the costs management order was made (r.3.17(3)). However, in respect of a second or subsequent budget submitted for approval, both of these headings may be misleading. In a second or subsequent budget all costs incurred after the first budget was approved should be placed in the “Estimated” column, together with any other costs to be included in the budget which have not yet been incurred. Unless the first budget was incorrectly drawn, the figures placed in the “Incurred” columns of a subsequent budget should be identical to the figures placed in the “Incurred” columns of the first budget. See further as to this topic, para.3.12.5.
Practice Direction 3D para.6 indicates that the table included in the Practice Direction shows the phases of the budget into which various items of work should be placed and indicates that, at the budget hearing, the parties should be ready to justify the estimates as to time and the estimates as to grade of fee earner they have made.
In Various Claimants v MGN Ltd [2016] EWHC 1894 (Ch); [2016] 4 Costs L.R. 695, Mann J held that a budget approved by the court should not include any sum for any success fees or after-the- event (“ATE”) insurance premiums which may be recoverable from the opponent if an order for costs is obtained. The exclusion of these items from the budget is consistent with the terms of the statement of truth included in Precedent H (as to which, see para.3.13.5).
As to the adverse consequences of filing a non-compliant budget, see Page v RGC Restaurants Ltd [2018] EWHC 2688 (QB); [2019] 1 W.L.R. 22 noted in para.3.14.1.
Distinction between incurred costs and budgeted costs
It is necessary to distinguish between incurred costs and budgeted costs for three reasons: to divide costs correctly between the different columns of the prescribed form of budget, whether the budget in question is the first budget, or a revised budget; to determine the limits of the court’s power to approve costs; and to determine the extent to which a court assessing costs can depart from the figures in an approved budget.
In r.3.15(1) the term “costs to be incurred” is defined as “budgeted costs”. For all practical purposes the distinction between incurred costs and budgeted costs is as follows:
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Incurred costs are all costs incurred up to and including the date of the first costs manage- ment order, unless otherwise ordered.
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Budgeted costs are all costs to be incurred after the date of the first costs management order.
This distinction is not now stated expressly in the rules or practice direction. (Before October 2020 it was so expressed in the Precedent H Guidance Note most of which (but not this distinction) has now been subsumed into the rules or the new PD 3D.) However the distinction can still be gleaned from a close reading of rr.3.15(1), 3.15A(5) and 3.17(3). Rule 3.15(1) treats as budgeted costs all “costs to be incurred”. Rule 3.17(3) provides that, a budgeting court “may not approve costs incurred before the date of any costs management hearing” but this embargo is stated to be “Subject to rule 3.15A”. Rule 3.15A(5) permits the court, when engaged upon revising a budget:
“... to approve, vary or disallow the proposed variations, having regard to any significant developments which have occurred since the date when the previous budget was approved or agreed.”
Thus any costs incurred after the date of the first costs management order from part of the “budgeted costs” if they are agreed or approved at a revision of that budget.
The meaning of the terms “incurred costs” and “budgeted costs” as defined above do not coincide with the words “Incurred” and “Estimated” which are used as the column headings in the prescribed form of budget (see further, para.3.12.4).
Incurred costs include all reasonable and proportionate costs claimed for the period up to and including the first management conference. In some cases the draft budget filed may not have cor- rectly anticipated the costs actually incurred by the budgeting party in the period after filing and before the conclusion of the first management conference. In such a case that party may seek to amend it (upwards or downwards) before the costs management order is made.
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The general words of r.3.17(3) provide that the court has no power to approve any costs which are not budgeted costs (i.e. the costs correctly placed in the incurred costs columns) but may take those costs into account when considering the reasonableness and proportionality of all budgeted costs. The costs managing court may also record any comments it has about the incurred costs. Any such comments recorded on the face of a case management order must be taken into account by the court when subsequently assessing the incurred costs (r.3.15(4) and see further as to this, para.3.18.4).
In two cases, guidance has been given as to how to deal with budgets where the court considers that the amount claimed as incurred costs is excessively high. In Redfern v Corby BC [2014] EWHC 4526 (QB), HH Judge Seymour QC held that if the court concludes that the costs already incurred appear to be excessive, it may approve all subsequent costs at lower levels than would otherwise have been approved. In CIP Properties (AIPT) Ltd v Galliford Try Infrastructure Ltd [2015] EWHC 481 (TCC); [2015] B.L.R. 285 Coulson J had, at an earlier hearing, exercised the court’s discretion to make a costs management order even though the claim value exceeded £10 million. Subsequently the claimant filed a budget totalling almost £9.5 million of which about £4.3 million had already been incurred. Coulson J declared this costs budget to be a wholly unreliable document and that the figures placed in the “Incurred” columns and the “Estimated” columns were disproportionate and unreasonable. In his judgment there were four available options for the court to consider: to order the claimant to prepare a new budget; to decline to approve the claimant’s costs budget; to endeavour to set costs budget figures on a phase by phase basis, looking primarily at estimated rather than actual costs; or to simply refuse to allow anything more in the costs budget beyond that which had already been spent. He decided that only the option of endeavouring to set costs budget figures on a phase by phase basis was workable, but, in the unusual circumstances of the case, that option needed modification to arrive at a better approximation to justice. He reduced the total budget from £9.5 million to about £4.3 million, roughly the amount said to have been already incurred. Whilst setting totals for each phase of the budget the learned judge recorded the amounts which he considered it had been reasonable for the claimant to have already incurred. If, on a subsequent detailed assessment, larger sums were allowed for any of these items, corresponding reductions would have to be made to the sums approved as reasonable for the claimant to incur in the future. However, in many cases the court merely records its comments upon the incurred costs without adjusting the budgeted costs to take account of those comments (see, for example, Various Claimants v Sir Robert McAlpine [2015] EWHC 3543 (QB); [2015] 6 Costs L.R. 1085, especially at [29] and [30]). In Discovery Land Co LLC v Axis Speciality Europe SE [2021] EWHC 2146 (Comm) Peter MacDonald Eggers QC (sitting as a High Court judge) stated that the court should be cau- tious about making comments upon incurred costs when first making a case management order, given the limited information and evidence available to the court at that stage; CIP was described as an extreme case in which the court could see, even at that early stage, that the incurred costs of a party were excessive and the court had not been satisfied with the party’s explanation of those costs ([45] and [46]). In a later case Coulson LJ described his decision in CIP as an extreme case in which the arithmetic was calculated following an all-day hearing at which very detailed arguments on the costs incurred had been presented (PGI Group Ltd v Thomas [2022] EWCA Civ 233 at [40]).
Guidance as to the extent to which a court assessing costs can depart from the figures in an ap- proved budget was given by the Court of Appeal in Harrison v University Hospitals Coventry & Warwickshire NHS Trust [2017] EWCA Civ 792; [2017] 3 Costs L.R. 425. In respect of budgeted costs, the assessing court should not make any departure, whether upwards or downwards, unless there is some good reason to do so (see further, para.3.18.3). Incurred costs (i.e. the figures placed in the “Incurred” column of the first budget), unlike budgeted costs, fall outside the ambit of CPR r.3.18(b) and, accordingly, the assessing court has an unfettered discretion as to what, if any sums to allow. Before exercising that unfettered discretion, the assessing court is required (by r.3.18(c)) to take into account any comments the costs managing court may have made pursuant to r.3.15(4) (see above) which are recorded on the face of any case management order.
Penalties for misuse of costs management
The intended purpose of costs management is to assist the court to deal with cases justly and at proportionate cost. It requires the parties to plan the expenditure on costs they intend to make and then requires them to seek to agree that expenditure with opposing parties. If their planned expenditure on costs cannot be agreed, they must seek the court’s approval of it.
It is possible for these rules to be misused so as to cause disproportionate costs and thereby prevent a case being dealt with justly. Parties may improperly exaggerate the amount of costs they intend to incur and may improperly withhold their consent to any reasonable agreements their op- ponents suggest. The motive behind such misuse may be to drain away their opponents’ resources so as to prevent them from continuing their claim or defence or to demoralise them into abandon- ing it. The use of costs management in this or other oppressive ways is an abuse of the process of the court which, if proved, may lead to the striking out of the oppressor’s claim or defence (see further, para.3.4.3). Practice Direction 3D para.13 states:
“Any party may apply to the court if it considers that another party is behaving oppressively in seeking to cause the applicant to spend money disproportionately on costs and the court will grant such relief as may be appropriate.”
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3.13
Filing and exchanging budgets and budget discussion reports1
3.13—(1) Unless the court otherwise orders, all parties except litigants in person must file and exchange budgets—
-
(a) where the stated value of the claim on the claim form is less than £50,000, with their directions questionnaires; or
-
(b) in any other case, not later than 21 days before the first case management conference.
(2) In the event that a party files and exchanges a budget under paragraph (1), all other parties, not being litigants in person, must file an agreed budget discussion report no later than 7 days before the first case management conference.
3.13.1
(5) Every budget must be dated and verified by a statement of truth signed by a senior legal representative of the party.
(6) Even though a litigant in person is not required to prepare a budget, each other party (other than a litigant in person) must provide the litigant in person with a copy of that party’s budget.
Rule 3.13(1): “file and exchange budgets”
Rule 3.13 applies to all proceedings commenced on or after 6 April 2016 (Civil Procedure (Amendment) Rules 2016 (SI 2016/234), r.23; for proceedings commenced before that date, r.3.13 as originally drawn still applies).
Unless the court otherwise orders (see below) the deadline for filing and exchanging budgets depends upon the stated value of the claim on the claim form. Where that value is less than £50,000, each party must file (i.e. send to the court office) their budget together with the completed directions questionnaire (as to which, see further, para.26.3.3); by the same time they should also exchange budgets with other parties (r.3.13(1)(a)). In other cases, budgets must be filed and exchanged not later than 21 days before the first case management conference (r.3.13(1)(b)).
In Yeo v Times Newspapers Ltd [2015] EWHC 209 (QB); [2015] 1 W.L.R. 3031 Warby J suggested that, in some cases, it might be appropriate for the court to direct the parties to file and exchange budgets at a time earlier than is provided for in r.3.13(1). In some libel, privacy and some harass- ment cases, the costs may become disproportionate before the time for costs budgeting is reached. While early intervention was not to be regarded as routine, the court might appropriately exercise its powers to give directions for the filing and exchange of budgets at an early stage ([75]–[77]). If a budget is required at an early stage it need not be for the entire litigation: in substantial cases, it may be limited initially to part only of the proceedings (see para.3.13.5).
In Freeborn v Marcal [2017] EWHC 3046 (TCC); [2017] 6 Costs L.R. 1103, the court office sent to the parties a letter which specified the date appointed for the first CMC and required the parties “to file and exchange costs budgets not less than 7 days before” that date. In compliance with that letter the defendant’s costs budget was filed and served eight days before the first CMC. On receiv- ing the defendant’s budget the claimant’s solicitors wrote to the defendant and to the court assert- ing that the budget had been filed 13 days late and that, therefore, the sanction of r.3.14 applied (budget to be treated as comprising only the applicable court fees). In response, the defendant made an application for relief from sanctions. Coulson J ruled that there had been no breach of the r.3.13 time limit; the 21-day period specified in the rule applies “unless the court otherwise orders” and the defendant had been entitled to conclude that the court’s letter referring to a seven- day period had ordered otherwise. The learned judge also declared that, even if there had been a breach, there was no doubt that relief would have been granted; as to the three-stage test in Denton,
1 Introduced by the Civil Procedure (Amendment) Rules 2013 (SI 2013/262) and amended by the Civil Procedure (Amendment) Rules 2016 (SI 2016/234) and the Civil Procedure (Amendment No.3) Rules 2020 (SI 2020/747).
(3)
The court—
(a) may, on its own initiative or on application, order the parties to
file and exchange costs budgets in a case where the parties are not
otherwise required by this Section to do so;
(b) shall (other than in an exceptional case) make an order to file and
exchange costs budgets if all parties consent to an application for
SECTION A CIVIL PROCEDURE RULES 1998
such an order.
The court may, in a substantial case, direct that budgets are to be limited
(4)
in the first instance to part only of the proceedings and extended later to
cover the whole proceedings.
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the breach was not serious or significant, the court’s letter provided a good reason for the breach and, in all the circumstances, it was plainly just and reasonable to grant relief. The stance taken by, and persisted in by, the claimant was criticised and the costs of the application were awarded against him. Parties should not seek to take advantage of alleged minor procedural mistakes made by their opponents. They need to consider carefully whether an alleged breach of the rules is, on analysis, any such thing and, even if it is, whether it is proportionate and appropriate to require or oppose an application for relief from sanctions in all the circumstances of the case.
Rule 3.13(2): Filing “an agreed budget discussion report”
Rule 3.13(2) requires all represented parties to file “an agreed budget discussion report”. (This version of the rule does not apply to cases commenced before 6 April 2016; Civil Procedure (Amendment) Rules 2016 (SI 2016/234) r.23.) The report must set out in respect of each phase of the proceedings, those figures which are agreed, those figures which are disputed and a brief sum- mary of the grounds of dispute (see PD 3D para.11). A standard form of report is annexed to the PD which parties are encouraged to use (Precedent R Budget Discussion Report). The object of r.3.13(2) is to compel the parties to discuss their budgets, thereby encouraging them to agree their budgets as far as they can. Rule 3.13(2) requires the filing of a report by all parties other than the party whose budget it is and litigants in person. Where a budget is served upon more than one represented party the obligation on those parties is to serve an “agreed budget discussion report” (see r.3.13(2)). The deadline for filing a budget discussion report is “no later than 7 days before the first case management conference” (r.3.13(2), line 3). Thus if case management directions are given without a hearing, such reports may never have to be filed unless the court alters the deadline in that case.
Rule 3.13(2) does not require the filing of budget discussion reports before any hearing after the first case management hearing. When a party seeks to revise a budget (under r.3.15A) certain variation particulars must be prepared in a standard form, the first page of which sets out the vari- ation figures claimed and offered and subsequent pages have space in which explanations as to why the variations are sought should be given and also columns in which an opposing party can explain why any variations are disagreed (see PD 3D, Precedent T).
It is an abuse of the costs budgeting process to propose unjustifiably low figures in a budget discussion report in the hope that this would cause the court to approve amounts which were lower than the amounts it would otherwise approve. In Findcharm Ltd v Churchill Group Ltd [2017] EWHC 1108 (TCC) Coulson J deplored the budget discussion report served by the defendant in respect of the claimant’s budget. The learned judge also criticised as being too low the figures put forward by the defendant in its own budget. In the result the claimant’s budget was approved as drawn and the defendant’s budget was agreed as drawn.
Rule 3.13(3): CMOs in cases otherwise excluded from costs budgeting
In cases in which the parties are not required by rr.3.12 and 3.13 to file and exchange budgets prior to the first case management conference (notably claims with a stated value of £10 million or more, and claims commenced by a Part 8 claim form; see further para.3.12.3) the court may in its discretion decide that it is appropriate to make a CMO so bringing those proceedings into the costs budgeting regime (rr.3.12(1A) and 3.13(3)). For a list of Part 8 claims and other claims in which costs management may be particularly appropriate, see PD 3D para.2. The court may exercise its powers under this rule of its own initiative or on the application of a party (r.3.13(3)(a)). Indeed, the court is required to make a CMO (other than in an exceptional case) if an application for such an order is made which gains all parties’ consent (r.3.13(3)(b)). A CMO can also be made in respect of an application in a claim not otherwise subject to automatic costs budgeting, for example, heavy detailed assessment proceedings (rr.3.12(1A) and 3.13(3)).
Budgets to include all costs up to and including trial unless the court otherwise orders
Unless the court otherwise orders, r.3.13(1) as amplified by PD 3D para.4(a), places upon the parties to whom it applies, an obligation to exchange and file a budget which is “in the form of Precedent H”, and which follows the table included in PD 3D which identifies where to include within the budget form the various items of work for which a claim is made (PD 3D para.6). Neither the precedent nor the table in PD 3D require the inclusion of any costs estimated for periods after trial other than the costs of “Dealing with draft judgment and related applications”. Indeed the precedent contains a pro forma statement to the contrary:
“This estimate excludes VAT (if applicable), success fees and ATE insurance premiums (if ap- plicable), costs of detailed assessment, costs of any appeals, costs of enforcing any judgment and [complete as appropriate]”.
Precedent H requires the costs claimed for in the budget to be divided into phases, the first two being Pre-action and Issue/Statements of case. The last two are Trial and Settlement. Costs in respect of other work may be claimed as if they were separate phases if it is believed that such costs are more likely than not to be incurred; for example, a trial of preliminary issues, or an application for disclosure against non-parties (PD 3D para.9 which refers to the claims for such costs as “contingent costs sections”).
Rule 3.17(4) (as amended in October 2020) deals with the costs of any interim applications made after budgets have been approved but which were not included in those budgets. The court
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3.13.4
CPR 3
3.13.6
3.14
3.14.1
SECTION A CIVIL PROCEDURE RULES 1998
3.13.5
may treat the costs of such an application as additional to the receiving party’s budget if it consid- ers that the receiving party had acted reasonably in not including that application in its budget (see further para.3.17.2).
In some cases parties may find it difficult or impractical to budget accurately all the work which will later have to be undertaken. The opening words of r.13.3(1) indicate that the court has the power to direct the parties to exchange and file budgets in some other form or omitting parts of the prescribed form. Rule 3.13(4) describes a system of staged budgeting which may be appropriate in “substantial cases” for example a group action such as Hutson v Tata Steel UK Ltd [2020] EWHC 771 (QB) (noted in para.3.15A.2). For other case examples see Yeo v Times Newspapers Ltd [2015] EWHC 209 (QB); [2015] 1 W.L.R. 3031 (noted in para.3.13.1) and Wright v Rowland [2016] EWHC 2206 (Comm); [2016] 5 Costs L.O. 713 (noted in para.3.15.3).
A party seeking permission to budget for only part of a case must make an application to the court in advance of the deadline for filing budgets. Unless an appropriate direction has been obtained in advance, a party filing a budget which does not include all costs up to and including trial will be in breach of r.13.3(1) and therefore at risk of the court making a costs management order limiting their recoverable costs to court fees only (see r.3.14 and Page v RGC Restaurants Ltd [2018] EWHC 2688 (QB); [2019] 1 W.L.R. 22 noted in para.3.14.1).
Statement of truth for use in Precedent H
A budget in the form of Precedent H must be dated and verified by a statement of truth signed by a senior legal representative of the party on whose behalf it is submitted (r.3.13(5)). The form of words to be used (which are set out in Precedent H itself and in PD 22 para.2.2A) require the legal representative to certify that the budget has been drawn so that it is a “fair and accurate statement” of costs which “it would be reasonable and proportionate for my client to incur in this litigation”. Such costs may well be less than the costs the client is likely or willing to incur. For example, in a modest value claim, a client may be willing to incur premium rates of remuneration for legal sup- port and advocacy in the hope that, to do so, will increase the client’s chances of success.
Filing or exchanging a budget which is unsigned, or signed by an insufficiently senior legal representative, may lead to the imposition of some sanction for non-compliance with r.3.13(5) (see above, r.3.4(2)(c) and the commentary thereto). However, it will not usually bring into play the sanc- tion set out in r.3.14 (budget to be treated as comprising only the applicable court fees). In Americhem Europe Ltd v Rakem Ltd [2014] EWHC 1881 (TCC); [2014] 4 Costs L.R. 682 (TCC), Stuart-Smith J, a solicitor had served and filed a costs budget in the form of Precedent H in time, but it was signed by a costs draftsman and not by a senior legal representative within the meaning of PD 3D. It was held that the error did not render the budget a nullity (as to this, see further, para.3.10.1, above). The document suffered only from an irregularity and CPR r.3.14 was not applicable. The learned judge stated that while CPR r.3.14 provides a sanction in the event that a party “fails to provide a budget”, it does not include the additional words “complying in all respects with the formal requirements laid down by [PD3D]”.
Costs budgeting in cases involving litigants in person
Rule 3.13 expressly provides that litigants in person are not under any duty to file and exchange a costs budget or any agreed budget discussion report thereon (see sub-rules (1) and (2)). However, they may still file and exchange such documents if they wish. More importantly, their exemption from these duties does not affect the duties which represented parties have to serve budgets on litigants in person (r.3.13(6)) and subsequently to seek to agree a budget discussion report with them. If a litigant in person does serve a budget, other parties who are represented are required to file a budget discussion report in respect of that budget.
Rule 3.13(3) provides that the court may order a litigant in person to file and exchange a costs budget and must so order (save in an exceptional case) if an application for such an order is made which gains all parties’ consent (r.3.13(3)(b)). For case illustrations of the circumstances in which it may be appropriate to make a CMO binding upon a litigant in person, see Campbell v Campbell [2016] EWHC 2237 (Ch) (application by claimant represented by direct access counsel; CMO made) and CJ & LK Perk Partnership v Royal Bank of Scotland [2020] EWHC 2563 (Comm); [2020] Costs L.R. 1365 (application opposed by claimant represented by direct access counsel; CMO refused).
Failure to file a budget1
3.14 Unless the court otherwise orders, any party which fails to file a budget despite being required to do so will be treated as having filed a budget comprising only the applicable court fees.
Rule 3.14: Effect of rule
This rule is explicit and the consequences of failure to comply are Draconian; the defaulting party is deemed to have filed a budget comprising only the applicable court fees. Rule 3.18
1 Introduced by the Civil Procedure (Amendment) Rules 2013 (SI 2013/262).
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provides that, when assessing costs on the standard basis where a costs management order has been made, the court will not depart from the receiving party’s last approved or agreed budgeted costs unless satisfied that there is “a good reason to do so”. In one respect r.3.14 is narrower than it appears: it is not engaged if a party merely fails to exchange a budget with another party. The sanc- tion of a deemed budget is applied only if a party fails to file a budget with the court. However, in another respect, the rule is much wider than it appears: in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537; [2014] 1 W.L.R. 795, the Court of Appeal confirmed that r.3.14 applies not only to parties who fail to file a budget at all, but also to parties who fail to file a budget within the time prescribed by r.3.13 (see judgment at [30]). In Mitchell, the failure to file a costs budget in time had caused the cancellation of a hearing in another case and the Master’s decision to refuse to grant relief from sanctions was upheld. In other cases, where the consequences of breach were not so material, the late service of a costs budget was held to be neither serious nor significant and relief from sanctions was granted (see for example Utilise TDS Ltd v Cranstoun Davies [2014 EWHC 834 (Ch) (45-minute delay), Azure East Midlands Ltd v Manchester Airport Group Property Developments Ltd [2014] EWHC 1644 (TCC) (two-day delay) and Murray v BAE Systems Plc, 22 December 2015, unrep., HH Judge Peter Gregory, (seven-day delay)).
In Jamadar v Bradford Teaching Hospitals NHS Foundation Trust [2016] EWCA Civ 1001; [2016] 5 Costs L.R. 809, a high value personal injury claim, the claimant did not serve a budget arguing that, in the circumstances of that case, there was no obligation upon him to do so. These argu- ments which were rejected by the lower courts and by the Court of Appeal. The district judge had made orders restricting the claimant’s recoverable costs to court fees only and refusing relief from sanctions. An appeal from those orders was dismissed by the circuit judge, as was the claimant’s ap- peal to the Court of Appeal. The circuit judge had acted within the ambit of his discretion and, therefore, his decision to refuse the claimant relief from sanctions could not be interfered with. Jackson LJ, stated that other judges might have been more lenient. The claim was for around £3 million and involved an extensive list of expert witnesses. However, any harshness of the orders had been mitigated by the fact that the damages claim had subsequently settled, and so the case would not have proceeded to trial at the expense of the claimant’s solicitors or their insurers.
In Intellimedia Systems Ltd v Richards,1 February 2017, unrep., Ch D, because of staff illness, the claimant’s solicitors failed to file or serve a budget or a budget discussion report on the defendants’ budget before a CMC. This was a significant breach for which there had been no good reason. However, in all the circumstances, the sanction imposed by r.3.14 was not a proportionate one in the instant case. As the claimant had been inefficient, it was ordered to pay the costs of the instant hearing on an indemnity basis.
In Lakhani v Mahmud [2017] EWHC 1713 (Ch); [2017] 1 W.L.R. 3482 (Daniel Alexander QC), the defendant’s solicitors filed their costs budget one day late without reasonable excuse. They had started to prepare the costs budget only after receiving the claimants’ costs budget. They then proceeded to deny that it had been filed and served late and only applied for relief from sanctions just before the hearing. The costs and case management conference, listed for 45 minutes, lasted for half a day dominated by the defendant’s application for relief from sanction under r.3.14. Although the costs budget was served late, the parties had been able to discuss their budgets and only £3,000 was in dispute on the on the defendant’s budget. The decision of the judge to refuse relief from sanctions was upheld on appeal. Although the appeal court expressed the view that the case was on the borderline of sufficient seriousness to warrant refusal of relief from sanctions, it held that, in all the circumstances of the case, the lower court had been entitled to find that the delay of one day had been serious or significant.
In Page v RGC Restaurants Ltd [2018] EWHC 2688 (QB); [2019] 1 W.L.R. 22, a high value personal injury claim proceeding to the first CMC, the parties agreed all directions and all costs up to and including a proposed second CMC. They also agreed that all subsequent directions and costs budget figures should left over to be dealt with at the proposed second CMC. The claimant’s budget included the words “interim budget” in the title and, in respect of the trial preparation and trial phases, specified £0.00 as the phase totals. At the CMC the Master refused to direct a second CMC and ruled that the claimant had failed to file a budget in full compliance with r.3.14. He therefore made a costs management order limiting the claimant’s approved budget to court fees only. On appeal, Walker J upheld the decision that the claimant had been in breach of r.3.13: filing a budget which did not cover all budgeted costs up to and including the trial, the claimant was a breach of r.3.13. It was immaterial that this breach had been agreed with the defendants. However, the learned judge ruled that, because of the opening words of r.3.14 (“Unless the court otherwise orders”) the Master had been required to consider at the CMC whether, as a matter of discretion, to disapply the sanction under r.3.14 in whole or in part.
“... at the stage when the court becomes involved, and proposes to make a formal decision continuing to treat Mr Page as subject to the CPR 3.14 sanction, it is necessary for the court to consider whether the court should take a different course” ([155]).
It being clear from the transcript that the Master had not exercised that discretion it was open to the appeal court to do so. In all the circumstances Walker J held that the r.3.14 sanction should be confined to the phases of trial and trial preparation and should be disapplied in respect of all earlier phases.
The penalty imposed by an order under r.3.14 may subsequently be reduced if the party upon
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3.14.2
whom it was imposed later becomes entitled to costs under r.36.13 (acceptance of a claimant’s offer) or r.36.17 (costs consequences following judgment); see r.36.23, and the commentary thereto.
“Unless the court otherwise orders”
A party in default of r.3.14 need not make a separate application for relief from sanctions under r.3.9. Instead, it may seek to invoke the saving provision in r.3.14 itself (“Unless the court otherwise orders”) by seeking to persuade the court to adopt that course at the hearing convened for costs management purposes. This saving provision gives the court an express power to disapply the sanc- tion which is additional to the power it has under r.3.9. Whichever application is made, the court should apply the three-stage test set out in Denton v TH White Ltd [2014] EWCA Civ 906; [2014] 1 W.L.R. 3296 (as to which, see para.3.9.3). There is an important difference between these two applications: on an application for relief from sanctions under r.3.9, the starting point should be that the sanction has been properly imposed and complies with the overriding objective (Denton at [45]); however, on an application under r.3.14, the court is not required to take that starting point unless there has been a prior judicial decision to that effect (Page v RGC Restaurants Ltd [2018] EWHC 2688 (QB); [2019] 1 W.L.R. 22 at [138]).
Rule 3.14: Minimising the adverse consequences of rule if relief from its sanction is not given
In many cases, a loss of costs in excess of court fees paid will not directly prejudice the parties in breach of r.3.14 but will fall instead upon their legal representatives. Nevertheless there are several methods which a party in breach may consider if it wishes later to be able to recover extra costs if an order for costs is subsequently made in its favour.
In the case of a claimant, if the relevant limitation period has not expired, it may be appropriate to discontinue the claim and start again. A discontinuing claimant would have to pay the defend- ants’ costs of the first action (see r.38.6) which may be stayed pending such payment (see Vol.2 para.9A-181). Current case law suggests that the second action will not be struck out as an abuse of process (Aktas v Adepta [2010] EWCA Civ 1170; [2011] Q.B. 894 and Hall v Ministry of Defence [2013] EWHC 4092 (QB); and see paras 3.4.5 and 3.4.16 above). However, the reasoning applied in those cases may now have to be re-considered. The rules on discontinuance (Pt 38) do not apply to Defences and therefore this solution is not available to defendants. If a Defence is amended by way of deleting its contents or admitting the claim, the claimant would thereby become entitled to obtain judgment for remedies as well as costs (see r.3.1(2)(m) and Pts 14 (Admissions) and 24 (Summary Judgment).
If a costs management order is made it is arguable that a party treated as having a budget limited to court fees may, indeed must, seek revisions of it so as to include any additional expenditure made reasonable by developments which they could not have anticipated at the time of their breach of r.3.14. Rule 3.15A(1) requires parties to revise their “budgeted costs ... if significant developments in the litigation warrant such revisions”. If a costs management order is not made, PD 44 para.3.7 applies. Under this provision the court may accept that the occurrence of significant developments in the litigation amounts to a “satisfactory explanation” for a claim for extra costs in respect of those developments. In Asghar v Bhatti [2017] EWHC 1702 (QB), Lewis J dismissed an appeal against a Master’s order which approved a revision to a budget limited to court fees, the significant development being an increase in the likely duration of trial from six days to 12 days.
An order approving a deemed costs budget limited to court fees is an interim order which may subsequently be varied on a later application if there has been a material change in circumstances (r.3.1(7) and see para.3.1.17.1). Thus, for example, if a preliminary issues trial, included in the deemed budget, has to be re-listed at a late stage because of the fault of another party, the court may vary the deemed budget to include costs thrown away by the re-listing, and then the court may either leave those costs to be assessed at the conclusion of the proceedings, or (more likely) sum- marily assess them immediately (see further, Pasricha v Pasricha [2021] EWHC 1017 (Ch)).
The adverse consequences will be reduced by half if the party whose costs are limited to court fees makes a Part 36 offer which his opponent does not accept within the relevant period for ac- ceptance (usually 21 days from service of the offer) or which his opponent does not accept and later fails to achieve a more advantageous result at trial (see r.36.23 and the commentary thereto; para.36.23.1).
The adverse consequences of r.3.14 might also be minimised, or perhaps avoided altogether, if the party in breach is later awarded costs on the indemnity basis (as to which see below, r.44.3 and the commentary thereto). If a costs management order is made, a court which later assesses costs will have regard to the receiving party’s last agreed or approved budgeted costs only if it is “assess- ing costs on the standard basis” (see r.3.18). If a costs management order is not made the position is governed by PD 44 paras 3.1 to 3.7; para.3.4 uses the word “may” not “will” and the fact that costs were awarded on the indemnity basis may be accepted by the court as a “satisfactory explana- tion” for claiming extra costs (see para.3.7).
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SECTION A CIVIL PROCEDURE RULES 1998
158
(5)
Save in exceptional circumstances—
-
(a) the recoverable costs of initially completing Precedent H (the form
to be used for a costs budget) shall not exceed the higher of—
-
(i) £1,000; or
-
(ii) 1% of the total of the incurred costs (as agreed or allowed on assessment) and the budgeted costs (agreed or approved); and
-
-
(b) all other recoverable costs of the budgeting and costs management process shall not exceed 2% of the total of the incurred costs (as agreed or allowed on assessment) and the budgeted (agreed or ap- proved) costs.
PART 3 THE COURT’S CASE AND COSTS MANAGEMENT POWERS
Costs management orders1
3.15—(1) In addition to exercising its other powers, the court may manage 3.15
the costs to be incurred (the budgeted costs) by any party in any proceedings.
(2) The court may at any time make a “costs management order”. Where
costs budgets have been filed and exchanged the court will make a costs
management order unless it is satisfied that the litigation can be conducted
justly and at proportionate cost in accordance with the overriding objective
without such an order being made. By a costs management order the court
will—
-
(a) record the extent to which the budgeted costs are agreed between
the parties;
-
(b) in respect of the budgeted costs which are not agreed, record the
court’s approval after making appropriate revisions;
-
(c) record the extent (if any) to which incurred costs are agreed.
(3) If a costs management order has been made, the court will thereafter control the parties’ budgets in respect of recoverable costs.
(4) Whether or not the court makes a costs management order, it may record on the face of any case management order any comments it has about the incurred costs which are to be taken into account in any subsequent as- sessment proceedings.
(Precedent H is annexed to Practice Direction 3D.)
(6) The court may set a timetable or give other directions for future reviews
of budgets.
(7) After a party’s budgeted costs have been approved or agreed, the party
must re-file and re-serve the budget—
-
(a) in the form approved or agreed with re-cast figures; and
-
(b) annexed to the order approving the budgeted costs or recording
the parties’ agreement.
(8) A costs management order concerns the totals allowed for each phase
of the budget, and while the underlying detail in the budget for each phase used by the party to calculate the totals claimed is provided for reference purposes to assist the court in fixing a budget, it is not the role of the court in the costs management hearing to fix or approve the hourly rates claimed in the budget.
Editorial note
This rule was amended by the Civil Procedure (Amendment No.2) Rules 2022 (SI 2022/783) to 3.15.0
replace the reference to CPR PD 3E with reference to CPR PD 3D. CPR PD Update 149 (July 2022)
deleted the original PD 3D. CPR PD Update 152 renumbered the subsequent PDs as PD 3E and PD
3F.
1 Introduced by the Civil Procedure (Amendment) Rules 2013 (SI 2013/262) and amended by the Civil Procedure (Amendment No.4) Rules 2014 (SI 2014/867), the Civil Procedure (Amend- ment) Rules 2017 (SI 2017/95), the Civil Procedure (Amendment No.3) Rules 2020 (SI 2020/747) and the Civil Procedure (Amendment No.2) Rules 2022 (SI 2022/783).
159
CPR 3
3.15.1
Rule 3.15: Effect of rule
Rules 3.15 and 3.18 are amended by the Civil Procedure (Amendment) Rules 2017 (SI 2017/95) and by the Civil Procedure (Amendment No.3) Rules 2020 (SI 2020/747) as from 1 October 2020; see para.3.12.1.
Rules 3.12 and 3.13 require represented parties in most Pt 7 multi-track claims to file and exchange budgets prior to the first case management conference (“CMC”; for the exceptions, notably claims with a stated value of £10 million or more, and claims by or on behalf of a person under the age of 18, see r.3.12, above). In such cases the court will usually make a costs manage- ment order (“CMO”) at the CMC thereby compelling the court and the parties to manage and control the costs of the claim thereafter by actively reconsidering and where necessary revising budgets as agreed by the parties or approved by the court. In some cases the court may, in its discretion, decide not to make a CMO (for example, in cases where the claimant has a limited or severely impaired life expectation with five years or less remaining, see further PD 3D para.1). If the parties have filed budgets in accordance with rr.3.12 and 3.13, but the court does not make a CMO the provisions of para.3 of PD 44 apply when the costs are assessed. Under r.3.15(2) the court’s costs management power to approve costs is limited to “the costs to be incurred (the budgeted costs)”. However the court has the power to comment upon incurred costs (r.3.15(4) and r.3.18(c)).
In cases in which the parties are not required by rr.3.12 and 3.13 to file and exchange budgets prior to the first case management conference (notably claims with a stated value of £10 million or more, and claims by or on behalf of a person under the age of 18 and claims commenced by a Pt 8 claim form) the court may in its discretion decide that it is appropriate to make a CMO so bringing those proceedings within this rule (r.3.12(1A)). For a list of Pt 8 claims in which costs management may be particularly appropriate, see PD 3D para.2 (and see further, para.3.13.3).
As to the format of a budget (which is prescribed), see para.3.12.4.
Budgets to be limited to costs which are both reasonable and proportionate
The text of r.3.15 does not expressly state that the costs the court managing costs may approve must be both reasonable and proportionate and there is no footnote to this rule cross referring to the relevant costs rules (contrast r.3.18 which applies to an assessment of budgeted costs on the standard basis and, in a footnote, draws attention to r.44.3(2)(a) and (5)). Nevertheless, the fact that budgeted costs should be limited to costs which are both reasonable and proportionate is expressly stated in PD 3D paras 5 and 12 and in the statement of truth by which every budget must be veri- fied (as to which see para.3.13.5).
In deciding the reasonable and proportionate costs of each phase of the budget, the court will have regard to the factors set out at rr.44.3(5) and 44.4(3) including a consideration of where and the circumstances in which the work was done as opposed to where the case is heard (PD 3D para.5).
The format of a budget in the prescribed form is described in para.3.12.4. In cases in which the budgeted costs do not exceed £25,000 (as to which, see further, para.3.12.4) or in which the stated value of the claim does not exceed £50,000, the parties must only use the first page of Precedent H (PD 3D para.4(b)). Accordingly, in these smaller cases each budget shows only the total costs claimed in respect of each stage without specifying different sums for solicitors’ charges, counsel’s fees or other disbursements.
In cases in which the stated value of the claim exceeds £50,000 and in which the budgeted costs exceed £25,000, the parties must complete the first page of Precedent H (a summary sheet) and also complete the second and subsequent pages. These pages disclose, in respect of each phase of the proceedings, the amount of costs estimated for each fee earner and for counsel, and also the hourly rate in respect of that fee earner or counsel by reference to which those amounts have been calculated. Rule 3.15(8) states that it is not the role of the court in the cost management hearing to fix or approve any hourly rates claimed in the budget. The detailed breakdowns of each phase given in the second and subsequent pages of a budget are “provided for reference purposes only to assist the court in fixing a budget”. Thus, if the court wishes to approve a reduced amount for any phase of the budget, the reduction should be shown as a reduced single figure for the estimated costs of that phase.
In Yirenkyi v Ministry of Defence [2018] EWHC 3102 (QB); [2018] 5 Costs L.R.1177, Jacobs J held that a Master conducting a cost budgeting exercise had erred in principle in approving specific hours and disbursements rather than total figures for each phase of the proceedings and had erred also in expressly reserving matters, such as hourly rates, to be disputed at a detailed assessment. There were three vices in the approach the Master had taken: leaving open for later argument the question of hourly rates to be applied greatly diminished the level of certainty in a final figure which an approved budget is intended to provide; approving the number of hours which different levels of fee earner may spend had the effect of removing the flexibility each party would later have when deciding how to spend the budget in the light of the way the case develops; thirdly, the process of approving the number of hours and some disbursements, leaving over other questions for a subsequent detailed assessment, involved the court in micromanaging costs to a disproportion- ate extent.
As to the power of the court at a subsequent detailed assessment, to allow hourly rates which are lower, or indeed higher, than the rates specified in the last approved or agreed budget, see para.3.18.3.
3.15.2
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Problems in assessing whether the costs estimated are proportionate
When assessing proportionality of a claim the court should take into account its overall value (r.44.3(5)(a) and (b)). In some cases the valuation proposed at the costs budgeting stage by the defendant is lower than the valuation proposed by the claimant. If both valuations are reasonably made the court must perforce accept the claimant’s valuation. If, in such circumstances, the claim succeeds but it transpires that the defendant’s assertion as to the claim’s value had been right all along, the defendant may seek to argue that this amounts to a good reason to depart from the last approved budget (see further, para.3.18.3 below).
In Wright v Rowland [2016] EWHC 2206 (Comm); [2016] 5 Costs L.O. 713, the parties were in dispute as to a different factor to be taken into account when assessing proportionality; the complex- ity of the litigation (r.44.3(5)(c)). The defendants submitted that the claimants had greatly underestimated the complexity of the claim and sought the approval of a budget covering the costs of one leading counsel and two junior counsel to represent the defendants at trial or ADR. The learned judge felt that, although the dispute on this issue was extreme, either party could be right. This raised a dilemma as to the costs the defendants might recover should they win at trial: if their budgeted costs were approved as claimed but the claimant’s view of complexity was correct, the defendants would be overcompensated in costs, whereas, approving their budgeted costs at the low level the claimant suggested would cause potential unfairness to them if their view of complexity was correct. In the result the dilemma was resolved by an order approving only parts of the defend- ants’ budgeted costs, leaving other parts, namely, trial preparation, trial and ADR, neither approved nor disapproved. These parts were left for determination by the trial court or by detailed assess- ment should the defendants be awarded costs.
Approving budgets and withholding approval
Rule 3.15(2) provides that, if a costs management order (CMO) is made, the court will record the extent to which each party’s budgeted costs are agreed or approved by the court. If the court wishes to approve a reduced amount for any phase of a budget, it is appropriate to alter only the total specified for the estimated costs of that phase (see further, para.3.15.2). However, in Red and White Services Ltd v Phil Anslow Ltd [2018] EWHC 1699 (Ch); [2018] 4 Costs L.O. 425, a multi-party competition law claim with a trial estimate of 10 days, the budgets for future costs filed by the claimant and the third party were £1,369,620 and £1,150,971 respectively. Birss J ruled that those budgets were disproportionate. In respect of those parties the learned judge approved a maximum budget for future costs of £800,000 each and directed each of them to file a revised budget not exceeding that maximum. For further points concerning budgets in group actions, see Hutson v Tata Steel UK Ltd [2020] EWHC 771 (QB), noted in para.3.15A.2.
If the court wishes to urge all parties to reconsider their budgets, it may decline to make a costs management order for the time being and relist this topic for a further hearing. In Group Seven Ltd v Nasir [2016] EWHC 620 (Ch); [2016] 2 Costs L.O. 303, Morgan J directed the parties to review their budgets having regard to a miscellany of points set out in his written judgment. Where parties have agreed a budget which the court considers to be clearly disproportionate the court may record the agreed figures and then record comments expressing reservations about the reasonableness and proportionality of those figures. Although comments upon budgeted costs fall outside rr.3.15(4) and 3.18(c) they may nevertheless facilitate an argument at a detailed assessment whether there is “good reason” to depart from the last agreed or approved budget.
Steps to be taken after budget approved
After any budgeted costs have been approved or agreed, each party must re-file and re-serve their budget in the form approved or agreed with re-cast figures, annexed to the order approving the budgeted costs or recording the parties’ agreement (r.3.15(7)). By this means the court file will contain a clear record of what phases have been budgeted and in what amount. If that record can be made simply by filing updated versions of the page 1 (summary sheet) of each bill, the court may so direct. Standard directions often annex a diagram showing, in ranks and columns, all of the approved or agreed phase totals for each budget (see Form PF 52 para.28 and Chancery Form CH40).
Costs cap placed upon the costs of costs management
Rule 3.15(5) provides that, save in exceptional cases, the recoverable costs allowed for initially completing a costs budget shall not exceed £1000 or, if higher, 1% of the of the total of the incurred costs (as agreed or allowed on assessment) and the budgeted costs (agreed or approved). All other recoverable costs of the budgeting and costs management process shall not, save in exceptional cases, exceed 2% of the total of the incurred costs (as agreed or allowed on assessment) and the budgeted (agreed or approved) costs. For a case which was found to be exceptional enough to merit a higher allowance, see Richard v BBC [2017] EWHC 1666 (Ch) (Chief Master Marsh) at [22]–[25].
Save as mentioned below, no details of costs management costs should appear in the budget. Instead, there are spaces on the first page into which the appropriate percentages should be inserted after a budget or revised budget has been approved by the court (PD 3D para.8). The exceptional costs management costs, details of which should appear in the budget, are the costs of preparing, reviewing and agreeing updated budgets. These costs should be included in Phases 3
3.15.3
161
3.15.4
3.15.5
3.15.6
CPR 3
3.15A
and 7 of the budget: the CMC and the PTR phases (PD 3D para.9). Because these costs are likely to comprise much, if not all, the work relating to the 2% cap, their inclusion as an unspecified ele- ment in the budgeted costs makes the assessing court’s task of applying the cap extremely difficult (see further Woodburn v Thomas [2017] 8 WLUK 153; bailii ref [2017] EWHC B16 (Costs) (Master McCloud)).
The restrictions on the costs of costs management stated in r.3.15(5) are costs caps, not costs allowances. If a case, in which a costs management order was made, later proceeds to a detailed as- sessment, full details of the work done in respect of costs management will have to be set out in the receiving party’s bill of costs. In respect of that part of the bill the assessing court will allow the costs as assessed or the costs caps, whichever are the lower. A further sum may then be added in respect of VAT if applicable (Marbrow v Sharpes Garden Services Ltd [2020] 7 WLUK 161; bailii ref [2020] EWHC B26 (Costs) (Master Gordon Saker, Senior Costs Judge)).
Revision and variation of costs budgets on account of significant developments (“variation costs”)1
3.15A—(1) A party (“the revising party”) must revise its budgeted costs upwards or downwards if significant developments in the litigation warrant such revisions.
(2) Any budgets revised in accordance with paragraph (1) must be submit- ted promptly by the revising party to the other parties for agreement, and subsequently to the court, in accordance with paragraphs (3) to (5).
3.15A.0
3.15A.1
(5) The court may approve, vary or disallow the proposed variations, hav- ing regard to any significant developments which have occurred since the date when the previous budget was approved or agreed, or may list a further costs management hearing.
(6) Where the court makes an order for variation, it may vary the budget for costs related to that variation which have been incurred prior to the order for variation but after the costs management order.
Editorial note
This rule was amended by the Civil Procedure (Amendment No.2) Rules 2022 (SI 2022/783) to replace references to CPR PD 3E with references to CPR PD 3D. CPR PD Update 149 (July 2022) deleted the original PD 3D. CPR PD Update 152 renumbered the subsequent PDs as PD 3E and PD 3F.
Budgeted costs to be revised if “significant developments” so warrant
Approved budgets are not costs caps; each party should revise its budgeted costs whether upwards or downwards, if significant developments in the litigation warrant such revisions (r.3.15A(1)).
The term “significant developments” is not defined. It appears to include any event, circumstance or step which is of such a size and nature as to go beyond the events, circumstances and steps which were taken into account, expressly or impliedly, in the budget previously approved or agreed. A development is taken into account impliedly if it is something that was, or should reasonably have been, anticipated by the applicant for revision at the time of a previously approved or agreed budget. This paragraph and Sharp v Blank (see below) was applied in Seekings v Moores [2019] EWHC 1476 (Comm) (Judge Worster).
Obvious examples of significant developments, depending on the circumstances of the case,
1 Introduced by the Civil Procedure (Amendment No.3) Rules 2020 (SI 2020/747) and amended by the Civil Procedure (Amendment No.2) Rules 2022 (SI 2022/783).
(3)
The revising party must—
-
(a) serve particulars of the variation proposed on every other party,
using the form prescribed by Practice Direction 3D;
-
(b) confine the particulars to the additional costs occasioned by the
significant development; and
-
(c) certify, in the form prescribed by Practice Direction 3D, that the
additional costs are not included in any previous budgeted costs or
SECTION A CIVIL PROCEDURE RULES 1998
variation.
The revising party must submit the particulars of variation promptly to
(4)
the court, together with the last approved or agreed budget, and with an
explanation of the points of difference if they have not been agreed.
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PART 3 THE COURT’S CASE AND COSTS MANAGEMENT POWERS
include; the grant of permission to call additional expert witnesses (Elvanite Full Circle Ltd v AMEC Earth & Environmental (UK) Ltd [2013] EWHC 1643 (TCC)); the adjournment of a trial (Churchill v Boot [2016] EWHC 1322 (QB) a refusal of permission to appeal; on the facts, the adjournment held not to be a significant development), an increase in the number of days needed for trial (Asghar v Bhatti [2017] EWHC 1702 (QB); Sharp v Blank [2017] EWHC 3390 (Ch), Chief Master Marsh); as to disclosure, the receipt of far more documents than the applicant could have reason- ably foreseen (Sharp v Blank); in a clinical negligence claim, a change of position by the defendant relating to causation justifying the instruction of leading counsel by the claimant (Zeromska-Smith v United Lincolnshire Hospitals NHS Trust [2019] EWHC 630 (QB) (Martin Spencer J)).
Thompson v NSL Ltd [2021] EWHC 679 (QB) (Master McCloud) concerned a personal injury claim initially valued at £150,000. After budgets had been exchanged and filed but before the hear- ing of the first case and costs management conference (“CCMC”), significant developments oc- curred which increased the value of the claim to £3.9 million and which also increased the complex- ity of the claim and the need for expert evidence. By the time of the hearing of the CCMC C’s solicitor had served a revised schedule of loss but had not revised the budget; at that stage C’s solicitor could not accurately assess what budgetary revisions were needed. The district judge was informed of the developments and an order was made approving the budget C had already filed and the claim was transferred to the High Court. C then promptly sought a revision under r.3.15A. D submitted that, at the hearing of the CCMC, C should have, for example, proposed figures on an estimated basis or asked for a recital that the budget could be updated at a later date. The learned Master rejected D’s submissions and approved revisions to various phases of C’s budget.
In r.3.15A, an order by which the court approves a variation to a previously approved budget is called an “order for variation”. Any additional costs included in that order are called “variation costs”. To a limited extent, variation costs may be approved retrospectively: the court may vary the budget for costs related to that variation which have been incurred prior to the order for variation but after the date of the first costs management order (rr.3.15A(6) and 3.17(3); and see further, para.3.12.5). A budget can be revised only in respect of significant developments which have oc- curred since the date when the previous budget was approved or agreed (r.3.15A(5)). In other words, an order for variation cannot be made in order to remedy a budget in respect of develop- ments which could and should have been covered at an earlier approval or variation.
Steps to be taken on revisions
The procedure set out in r.3.15A is as follows. Each party should revise its budgeted costs promptly as soon as a significant development becomes apparent that warrants such a revision (r.3.15A(1)). If revision is needed, the revising party must prepare variation particulars in the form prescribed by PD 3D para.3(b) (Precedent T, which is annexed to PD 3D). The front sheet of form T is a summary sheet. It comprises of columns in which to set out, in respect of each phase of the budget, the budgeted costs already approved and the variation sought (plus or minus). Other columns show the incurred costs (see para.3.12.5) claimed in that party’s budget or budgets, the new total claimed for budgeted costs including the variation proposed and, finally a column to be completed by the court showing the new total for budgeted costs including the variation as agreed or approved by the court. Other pages of Precedent T enable the revising party to explain the significant development in question and the effect (if any) it is estimated to have on each phase of the budget. These pages also enable opposing parties to comment upon the revision proposed.
Precedent T contains a certificate, to be signed by the revising party or a legal representative, stating that the additional costs claimed are not included in any previous budgeted costs or variation. Having completed the appropriate columns in Precedent T the revising party must promptly submit it to the other parties for comments (i.e. any agreements or points of difference) and then submit it, promptly, to the court, together with the last approved or agreed budget, and with an explanation of any points of difference. Unless the application is combined with an application for other directions the court hearing which is convened for it (a “costs management conference”) should, if practicable, be conducted by telephone or in writing (r.3.16(2)). In some cases an earlier
costs management order may have set a timetable for future reviews of budgets (r.3.15(6)). Applications can also be made during the trial. However, at that late stage it may not be ap- propriate for the trial judge to do more than give an indication as to what adjustment may be ap- propriate, leaving further details to the costs judge should the matter proceed to a detailed assess- ment (National Museums and Galleries on Merseyside Board of Trustees v AEW Architects and Designers Ltd
[2013] EWHC 3025 (TCC) at [40]).
On reviewing the budget in question the court may make an order which approves, varies or
disallows the proposed variations, having regard to any significant developments which have oc- curred since the date when the previous budget was approved or agreed, or may list a further costs management hearing (r.3.15A(5)). Once the variations have been approved or agreed, the revising party must re-file and re-serve its budget, with the arithmetic appropriately re-cast and attaching a copy of the order for variation (r.3.15(7)).
In Hutson v Tata Steel UK Ltd [2020] EWHC 771 (QB), a group action, the court had previously directed that costs budgeting should be divided into phases; a budget had been approved for the costs of the first phase, budgeting for subsequent phases being deferred until the start of each phase. At the start of phase 2, C applied under (what is now) r.3.15A for a revision of the phase 1
3.15A.2
163
CPR 3
3.16
3.16.1
SECTION A CIVIL PROCEDURE RULES 1998
3.15A.3
budget. Turner J dismissed that application; in the particular circumstances of that case, once phase 1 was completed, any application to deviate from it should be made under r.3.18, i.e. to the court assessing costs at the conclusion of the proceedings.
In Persimmon Homes Ltd v Osborne Clark LLP [2021] EWHC 831 (Ch) Master Kaye ruled that, before considering whether to exercise its discretion to vary a costs budget, the court should first consider whether the applicant has complied with two mandatory requirements set out in r.3.15A, namely proof that there has been a significant development in the litigation since the last approved or agreed budget; and proof that the applicant had acted promptly in submitting particulars of the variation to the other parties and to the court. These mandatory requirements were said to form a threshold test which, if not satisfied, prevents the court from proceeding to exercise its discretion as to whether to allow any variation. Non-compliance with the promptness requirement does not prevent the applicant later applying under r.3.18, should the matter proceed to a detailed assessment. However, at that stage the applicant would have to show some good reason for depart- ing from the costs budget (as to which, see para.3.18.3).
As to the revision of a budget limited to court fees which it is treated as having been filed under r.3.14, see Asghar v Bhatti [2017] EWHC 1702 (QB), noted in para.3.14.3.
Budget revisions in respect of surveillance evidence
There is some controversy as to whether the court will allow revisions to a budget in respect of surveillance evidence which the parties decide to make after their previous budget has been ap- proved; for example, in a personal injury claim in which the defendants now suspect the claimant of exaggerating his injuries. Rule 3.15A(2) and (4) require the revising party to submit Precedent T to the other parties and then to the court “promptly”. Is an application for a revised budget made promptly if the defendants delay serving and filing Precedent T until after the additional expenditure has been incurred? In an early case on this topic (Purser v Hibbs [2015] EWHC 1792 (QB)) HH Judge Moloney remarked that the court would not wish to do anything to discourage the judicious use of surveillance evidence, or to alert fraudsters to the use of surveillance.
Applications for permission to adduce surveillance evidence are usually made after the first case management conference has been held. By that time, directions have been given as to the exchange of witness statements and the approval of costs budgets. Those directions may also include a date by which any surveillance evidence must be disclosed (see para.32.1.4.1 noting O’Leary v Tunnelcraft Ltd [2009] EWHC 3438 (QB) and Hayden v Maidstone and Tunbridge Wells NHS Trust [2016] EWHC 1121 (QB); [2016] 3 Costs L.R. 547. It is in principle open for a defendant to combine an applica- tion for permission to adduce surveillance evidence with an application for an appropriate budget variation. The success or failure of either application depends upon how promptly the defendants acted in obtaining the surveillance evidence and in disclosing it to the claimant. If the defendants are held, in all the circumstances, to have acted promptly, a budget revision could be made relating to all surveillance costs incurred since the date of their last agreed or approved budget (see r.3.15A(6)).
Costs management conferences1
3.16—(1) Any hearing which is convened solely for the purpose of costs management (for example, to approve a revised budget) is referred to as a “costs management conference”.
(2) Where practicable, costs management conferences should be conducted by telephone or in writing.
Rule 3.16: Effect of rule
This rule describes any hearing convened solely for the purpose of costs management as a “costs management conference”, gives an example thereof (a hearing to approve a revised budget) and states that any such hearing “should, if practicable, be conducted by telephone or in writing”. In practice most costs management decisions are made on occasions when the court is considering also what case management directions should be given. Costs management conferences are comparatively rare. In most cases to which Pt 3 Section II applies (see para.3.12.3) represented par- ties are required to exchange and file budgets before the first case management conference. In any case in which a costs management order is made the court may set a timetable or give other direc- tions for future reviews of budgets (r.3.15(6)). Most budget reviews are also conducted by way of a hearing or video conference. Because reviews are usually sought in respect of some “significant developments in the litigation” (see further, para.3.15A.1) those developments will often generate a need to review the case management directions also.
If, on receipt of an application for a costs management conference, the court does not consider that a hearing would be appropriate and, accordingly, makes an order without a hearing, any party affected by that order may apply to have it set aside, varied or stayed (see further, rr.3.3, 23.8(c) and PD 23A para.11.2). There is no such right if the parties agreed to the terms of the order
1 Introduced by the Civil Procedure (Amendment) Rules 2013 (SI 2013/262).
164
(3)
Subject to rule 3.15A, the court—
-
(a) may not approve costs incurred up to and including the date of any
costs management hearing; but
-
(b) may record its comments on those costs and take those costs into
account when considering the reasonableness and proportionality
PART 3 THE COURT’S CASE AND COSTS MANAGEMENT POWERS
sought, or agreed that the court should dispose of the application without a hearing (r.23.8(a) and (b), and PD 23A para.11.1).
Court to have regard to budgets and to take account of costs1
3.17—(1) When making any case management decision, the court will have 3.17
regard to any available budgets of the parties and will take into account the
costs involved in each procedural step.
(2) Paragraph (1) applies whether or not the court has made a costs management order.
of all budgeted costs.
(4) If an interim application is made but is not included in a budget, the
court may, if it considers it reasonable not to have included the application in the budget, treat the costs of such interim application as additional to the ap- proved budgets.
Rule 3.17: Effect of rule
The CPR have the overriding objective of enabling the court to deal with cases justly and at 3.17.1
proportionate cost (r.1.1(1)). The court must seek to give effect to the overriding objective when
exercising any power given to it by the CPR, including any case management power (r.1.2). This
rule reinforces the point that the court’s “costs management” powers are “a feature of or adjunct
to” case management. The intention is that every case management decision should be made with full consideration of its cost implications. If the effect of making a particular case management direction is to render a particular phase of the proceedings or procedural step of the claim disproportionate (by reference to the definition of proportionality stated in r.44.3(5)) then that direction will not be given.
Effect of approved budgets upon the costs of subsequent interim applications awarded on the standard basis
At the conclusion of any interim application the court has a discretion as to whether one party 3.17.2 should be ordered to pay the costs of another party; if such an order is made the court also has a discretion as to the amount of costs to award and the date by which they must be paid (r.44.2(1)).
In the case of an interim application made after a costs management order has been made, if an award of costs on the standard basis is appropriate (r.44.3) the court must have regard to the receiv- ing party’s last approved or agreed budget (r.3.18(a)). If the costs of the application in question were included in that budget the court should not depart from it unless there is good reason to do so (r.3.18(b)). If the costs of application in question were not included in the budget, a question arises as to whether they should have been included. The court may make an award of costs to be paid (in addition to any budgeted costs the receiving party may later be awarded) only if it consid- ers that the receiving party had acted reasonably in not including that application in its budget (r.3.17(4)).
Assessing costs on the standard basis where a costs management order has been made2
3.18 In any case where a costs management order has been made, when as- 3.18 sessing costs on the standard basis, the court will—
-
(a) have regard to the receiving party’s last approved or agreed budgeted costs for each phase of the proceedings;
-
(b) not depart from such approved or agreed budgeted costs unless satisfied that there is good reason to do so; and
-
(c) take into account any comments made pursuant to rule 3.15(4) or 3.17(3) and recorded on the face of the order.
1 Introduced by the Civil Procedure (Amendment) Rules 2013 (SI 2013/262) and amended by the Civil Procedure (Amendment No.3) Rules 2020 (SI 2020/747) and the Civil Procedure (Amend- ment) Rules 2021 (SI 2021/117).
2 Introduced by the Civil Procedure (Amendment) Rules 2013 (SI 2013/262) and amended by the Civil Procedure (Amendment) Rules 2016 (SI 2016/234), the Civil Procedure (Amendment) Rules 2017 (SI 2017/95) and the Civil Procedure (Amendment No.3) Rules 2020 (SI 2020/747).
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CPR 3
3.18.1
3.18.2
(Attention is drawn to rules 44.3(2)(a) and 44.3(5), which concern proportion- ality of costs.)
Rule 3.18: Effect of rule
This rule explains the effect which costs management should have when, on the conclusion of proceedings, one party is awarded costs against another and the amount of those costs cannot be agreed and so they fall for assessment by the court.
The opening words of r.3.18 expressly limit its application to an assessment of costs on the standard basis, not an assessment on the indemnity basis (Lejonvarn v Burgess [2020] EWCA Civ 114; [2020] 4 W.L.R. 43; for definitions of the standard basis and the indemnity basis, see r.44.3(2) and (3)).
Assessment of budgeted costs
Paragraphs (a) and (b) of r.3.18 relate only to the budgeted costs as opposed to the incurred costs (as to this distinction, see further, para.3.12.6).
Paragraph (a) requires the assessing court to have regard to the receiving party’s last approved or agreed budgeted costs “for each phase of the proceedings”. The words just quoted make it clear that an underspend in one phase cannot be used to offset an overspend in another phase.
Paragraph (b) is intended to prohibit the assessing court from departing from the figures given therein for each phase of the proceedings “unless satisfied that there is good reason to do so”. Whilst an underspend in one phase amounts to a good reason to depart from that part of the budgeted costs, it cannot, by itself amount to a good reason to exceed the budgeted allowance for another phase.
In Harrison v University Hospitals Coventry and Warwickshire Hospital NHS Trust [2017] EWCA Civ 792; [2017] 3 Costs L.R. 425 the Court of Appeal held that an approved budget is intended to provide real transparency as to the costs likely to be awarded and therefore is more than just a cap on the maximum costs allowable. The primary aims of costs budgeting are to reduce the number of detailed assessments generally, to reduce the number of issues raised in any detailed assessments that do take place, and to increase the level of certainty litigants can have as to the likely amount of costs they will recover if they win or will have to pay if they lose (and see also, Merrix v Heart of England NHS Foundation Trust [2017] EWHC 346 (QB); [2017] 1 Costs L.R. 91 (Carr J) which was cited with approval in Harrison).
What amounts to a good reason to depart?
In Harrison the Court of Appeal decided not to proffer any guidance as to what will constitute a “good reason” for departing from an agreed or approved budget, stating that this can safely be left to the individual appraisal and evaluation of costs judges by reference to the circumstances of each individual case. In doing so, costs judges should be expected not to adopt a lax or over-indulgent approach to the need to find “good reason”. Costs judges should approach this topic having in mind the three-stage test known as the Denton principles (as to which, see para.3.9.3). Thus the as- sessing court might consider the significance of the departure from the approved budgeted figure, the causes of it, and all the circumstances of the case including in particular (a) the need for litiga- tion to be conducted efficiently and at proportionate cost and (b) the need to enforce compliance with rules, practice directions and court orders.
It is arguable that, on adopting the approach suggested in Harrison, a costs judge might be entitled to reach conclusions as to the proportionality of budgeted costs, or as to the reasonableness of the hourly rates upon which they were claimed, which depart from the conclusions reached by the costs managing court. Two decisions by costs judges have been reported on this topic (both available from the bailii website): RNB v Newham LBC [2017] EWHC B15 (Costs) and Nash v Ministry of Defence [2018] EWHC B4 (Costs). Both decisions support the view that a costs judge may depart from the last approved or agreed budget if satisfied that the total costs incurred are disproportionate. However, they reach opposite conclusions on the significance of a ruling as to hourly rates which are lower than those upon which an approved budget had been drawn. In RNB this was held to amount to a good reason to depart from the budget. In Nash it was held that hourly rates form only one of a variety of factors taken into account when setting a budget and should not be treated as holding some special status, making it different from the other factors. Neither case is being taken further by way of appeal.
In Barts Health NHS Trust v Salmon, 19 January 2019, unrep. (HH Judge Dight) the parties agreed a settlement before all of the budgeted work had been undertaken and the claimant’s bill of costs for detailed assessment claimed the budget sub-totals for completed phases and the actual costs incurred for other phases. The learned judge ruled that the non-completion of budgeted work in any phase of the budget can amount to a good reason to depart from the budget sub-total for that phase. The learned judge further ruled that, once the court has decided to depart from a budget sub-total, it may then hear submissions on the sum to be allowed for that phase. That sum (as determined either by way of a line-by-line assessment or in a more broad brush way) may be a sum lower than the costs actually incurred for that phase. There is no requirement to show a second good reason to make this further departure from the budget sub-total. Thus, when assess- ing the sum to allow in respect of an incomplete phase, the court is entitled to depart from, for example, the hourly rates specified for fee earners in that phase ([24]).
3.18.3
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3.19—(1) (a)
(b)
For the purposes of this Section— 3.19 “costs capping order” means an order limiting the amount of future costs (including disbursements) which a party may recover pursuant to an order for costs subsequently made; and
“future costs” means costs incurred in respect of work done after the date of the costs capping order but excluding the amount of any additional liability.
PART 3 THE COURT’S CASE AND COSTS MANAGEMENT POWERS
In two subsequent cases doubts were expressed as to the reasoning, if not the decision, in Barts Health NHS (above). In Chapman v Norfolk and Norwich University Hospital NHS Foundation Trust, 4 March 2020, unrep. (CC Birmingham), District Judge Lumb ruled that, even in respect of an incomplete phase, the court should not enquire into the sum actually claimed unless there was very clear evidence of obvious overspending ([11] and [13]). In Utting v City College Norwich [2020] EWHC B20 (Costs) (available on bailii) Master Brown would not reduce the sums claimed for two incomplete phases on the ground that the sums claimed fell substantially short of the budgeted figures ([24] and [25]); and would not reduce the sum claimed for another phase on the ground that that phase had been substantially completed ([27]).
The fact that a budget contains a substantial overstatement of the hourly rate applied for one or more of the fee earners may amount to a good reason within the meaning of r.3.18 for departing from the budget (MXX v United Lincolnshire NHS Trust [2019] EWHC 1624 (QB); [2019] Costs L.R. 1151).
Assessment of incurred costs
Paragraph (c) of r.3.18 relates only to the incurred costs as opposed to the budgeted costs (as to 3.18.4
this distinction, see further, para.3.12.6). It requires the assessing court to take into account any
comments the costs managing court has made about the incurred costs pursuant to r.3.15(4) which
are recorded on the face of any case management order. The requirement imposed on the assess-
ing court here is very much lighter than the requirement imposed upon it in r.3.18(b) (which ap- plies only to budgeted costs). Taking into account the comments made by the costs managing court in relation to incurred costs does not amount to a requirement to adopt and apply those comments as decisions in the assessment and is not a requirement to depart from them only if some “good reason” is shown (and see Harrison v University Hospitals Coventry and Warwickshire Hospital NHS Trust [2017] EWCA Civ 792; [2017] 3 Costs L.R. 425, at [45] to [54]). On a detailed assessment, the costs judge may have far more information than the costs managing judge had at the CMC. “It seems to me that a Costs Judge is entitled, having taken a comment into account, to disagree with it or to put it to one side, if on the detailed assessment a fuller picture emerges” (Chief Master Marsh; Richard v BBC [2017] EWHC 1666 (Ch) at [3]).
III. Costs Capping
Costs capping orders—General1
(2) This Section does not apply to judicial review costs capping orders under Part 4 of the Criminal Justice and Courts Act 2015 or to protective costs orders.
(Rules 46.16 to 46.19 make provision for judicial review costs capping orders under Part 4 of the Criminal Justice and Courts Act 2015.)
(3) [Omitted]
(4) A costs capping order may be in respect of—
-
(a) the whole litigation; or
-
(b) any issues which are ordered to be tried separately.
(5) The court may at any stage of proceedings make a costs capping order
against all or any of the parties, if—
-
(a) it is in the interests of justice to do so;
-
(b) there is a substantial risk that without such an order costs will be
disproportionately incurred; and
-
(c) it is not satisfied that the risk in subparagraph (b) can be adequately
controlled by—
(i) case management directions or orders made under this Part;
and
1 Introduced by the Civil Procedure (Amendment) Rules 2013 (SI 2013/262) and amended by the Civil Procedure (Amendment No.2) Rules 2016 (SI 2016/707).
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CPR 3
3.19.1
(ii) detailed assessment of costs.
(6) In considering whether to exercise its discretion under this rule, the
court will consider all the circumstances of the case, including—
-
(a) whether there is a substantial imbalance between the financial
position of the parties;
-
(b) whether the costs of determining the amount of the cap are likely
to be proportionate to the overall costs of the litigation;
-
(c) the stage which the proceedings have reached; and
-
(d) the costs which have been incurred to date and the future costs.
(7) A costs capping order, once made, will limit the costs recoverable by the party subject to the order unless a party successfully applies to vary the
order. No such variation will be made unless—
-
(a) there has been a material and substantial change of circumstances
since the date when the order was made; or
-
(b) there is some other compelling reason why a variation should be
made.
Section III: Effect of section
The rules in this Section of Pt 3 and PD 3E (Costs Capping) replace provisions formerly found in former Pt 44 and in ss. 23A and 23B of the Costs PD. What were rr.44.18, 44.19 and 44.20 in former Pt 44, are now, respectively, rr.3.19, 3.20 and 3.21 in Pt 3.
By the Civil Procedure (Amendment No.2) Rules 2016 (SI 2016/707), r.3.19(1) and (2) were substituted, and (3) omitted, as a consequence of amendments made to Pt 46 (Costs—Special Cases) by that statutory instrument and brought into effect on 8 August 2016, in particular the insertion in that Part of Section VI (rr.46.16 to 46.19) (Judicial Review Costs Capping Orders under Pt 4 of the Criminal Justice and Courts Act 2015), following upon the bringing into force of ss.88 to 90 of the 2015 Act (see Vol.2 paras 9A-1312 to 9A-1314). In effect, by ss.88 to 90 and rr.46.16 to 46.19 a separate regime is provided for the granting of costs capping orders in judicial review proceedings. The provisions of Section VI of Pt 46 do not apply to a costs capping order under r.3.19 (r.46.16(2)). See further para.46.16.1.
A costs capping order (CCO), if made, applies only to the costs subsequently incurred by the party subject to the cap (r.3.19(1)). Rule 3.19(5) states three pre-conditions which must each be satisfied before a CCO is made: (1) it is in the interests of justice to make a CCO; (2) there is a substantial risk that without a CCO costs will be disproportionately incurred; and (3) the court is not satisfied that the risk of disproportionate costs can be adequately controlled by costs budgeting or by detailed assessment. In Thomas v PGI Group Ltd [2021] EWHC 2776 (QB) Cavanagh J doubted whether pre-condition (3) could ever be met today given that the costs budgeting regime now provides a more sophisticated and nuanced way of setting a costs figure ([95]). Even if these pre-conditions are met, the court is not bound to make a CCO: it has a discretion whether or not to do so.
For case illustrations of the CCO regime see: Tidal Energy Ltd v Bank of Scotland Plc [2014] EWCA Civ 847 and Black v Arriva North East Ltd [2014] EWCA Civ 1115 (both being applications for a CCO heard by a single Lord Justice in respect of the costs of an appeal) and PGI Group Ltd v Thomas [2022] EWCA Civ 233 (an application to a single Lord Justice for permission to appeal). In Tidal Energy the applicant sought the disallowance of any costs incurred by the instruction of lead- ing counsel for the hearing of the appeal; Arden LJ ruled that the applicant had failed to satisfy the requirement to show that such costs could not be adequately controlled by detailed assessment. The learned Lord Justice gave as an example of a case in which costs might not be adequately controlled by detailed assessment: a case in which there is evidence that the cost judge could not adequately distinguish between costs reasonably incurred and costs unreasonably incurred, for instance, in very extensive and detailed litigation on a technical matter.
In Black v Arriva North East Ltd [2014] EWCA Civ 1115 Christopher Clarke LJ ruled that CCOs should not be used to remedy problems of access to finance for litigation, or to counteract or minimise any substantial imbalance between the financial position of the parties. The application for a CCO in Black had been made in an appeal in a low value claim falling outside the QOCS regime (as to which, see rr.44.13 to 44.17); although the costs of insurance cover for the risk of los- ing the appeal vastly exceeded the value of the damages likely to be awarded and was not recover- able as costs, the application was dismissed.
In PGI Group Ltd v Thomas [2021] EWHC 2776 (QB) a claim concerning the alleged sexual abuse of 31 tea farm workers in Malawi, the defendant estimated the maximum financial value of the claim as not exceeding £310,000. Although the claimants did not accept that estimate they conceded that the financial compensation that they could expect to receive if successful would be very substantially lower than their own legal costs, but drew attention to the reputational and other benefits they would gain (the “vindication issues”). The claimants’ draft costs budget showed total costs exceeding £3.1 million (£1.6 million already incurred plus estimated future costs of about
SECTION A CIVIL PROCEDURE RULES 1998
168
(2)
The application notice must—
-
(a) set out—
-
(i) whether the costs capping order is in respect of the whole of the litigation or a particular issue which is ordered to be tried separately; and
-
(ii) why a costs capping order should be made; and
-
-
(b) be accompanied by a budget setting out—
-
(i) the costs (and disbursements) incurred by the applicant to date; and
-
(ii) the costs (and disbursements) which the applicant is likely to incur in the future conduct of the proceedings.
-
PART 3 THE COURT’S CASE AND COSTS MANAGEMENT POWERS
£1.5 million). The defendant’s draft costs budget showed total costs of about £2.25 million (£750,000 already incurred and estimated future costs of about £1.5 million). The defendant ap- plied for a CCO limiting the future costs recoverable by the claimants to £150,000 (a sum based upon the likely costs had proceedings been taken in Malawi). Cavanagh J dismissed that application: bearing in mind the vindication issues and the claimants’ right to bring this claim in this country, none of the pre-conditions required for a CCO had been satisfied: as to the interests of justice, the proposed CCO would probably stifle the claim or at the very least lead to gross inequality of arms between the parties; as to the risk that disproportionate costs would be incurred, these claims involved much more than money; as to the risk that costs could not be adequately controlled by costs budgeting or by detailed assessment, this was not a case in which a wealthy claimant was deliberately pursuing a low-value claim, at great expense, in order to harass the defendant, or to cause as much unnecessary cost to the defendant as possible. The fact that the defendant would not be able to recover its costs was irrelevant; a CCO should not be used to minimise the costs protec- tion given to claimants falling within the QOCS regime.
At a subsequent hearing, costs budgets were set for the claimants’ future costs at approximately £850,000 and the defendant’s future costs at £1.75 million (see [2022] EWCA Civ 233 at [5]). The defendant applied to the Court of Appeal for permission to appeal the refusal to grant a CCO. Refusing permission, Coulson LJ ruled that there was no arguable error of principle in Cavanagh J’s decision and, on the issue of proportionality, the learned judge had reached a conclusion which the vast majority of judges would also have reached. The learned judge had not ruled that a CCO could never be set at a sum lower than the amount of costs it was necessary to incur. Costs which are necessary may well be disproportionate. As to the prohibition on the citing decisions made in permission to appeal hearings see [2022] EWCA Civ 233 at [1] and see para.40MPD.2 at para.6.
Application for a costs capping order1
3.20—(1) An application for a costs capping order must be made on notice in accordance with Part 23.
3.20
(3) The court may give directions for the determination of the application and such directions may—
-
(a) direct any party to the proceedings—
-
(i) to file a schedule of costs in the form set out in paragraph 3
of Practice Direction 3E—Costs capping;
-
(ii) to file written submissions on all or any part of the issues
arising;
-
-
(b) fix the date and time estimate of the hearing of the application;
-
(c) indicate whether the judge hearing the application will sit with an
assessor at the hearing of the application; and
-
(d) include any further directions as the court sees fit.
Editorial note
This rule was amended by the Civil Procedure (Amendment No.2) Rules 2022 (SI 2022/783) to replace the reference to CPR PD 3F with reference to CPR PD 3E. CPR PD Update 149 (July 2022) deleted the original PD 3D, which necessitated the renumbering. CPR PD Update 152 renumbered the subsequent PDs as PD 3E and PD 3F.
Rule 3.20: Effect of rule
Before Section III of Pt 3 came into effect, this rule was found in former Pt 44 at r.44.19. For relevant commentary, see para.44.19.1 in White Book 2013.
1 Introduced by the Civil Procedure (Amendment) Rules 2013 (SI 2013/262) and amended by the Civil Procedure (Amendment No.2) Rules 2022 (SI 2022/783).
3.20.0
3.20.1
169
CPR 3
SECTION A CIVIL PROCEDURE RULES 1998
3.21 3.21.1
Application to vary a costs capping order1
3.21 An application to vary a costs capping order must be made by ap- plication notice pursuant to Part 23.
Rule 3.21: Effect of rule
Before Section III of Pt 3 came into effect, this rule was found in former Pt 44 at r.44.20. For relevant commentary, see para.44.20.1 in White Book 2013.
1 Introduced by the Civil Procedure (Amendment) Rules 2013 (SI 2013/262).
170
PRACTICE DIRECTION 3A
PRACTICE DIRECTION 3A—STRIKING OUT A STATEMENT OF CASE
This Practice Direction supplements CPR Rule 3.4
Introductory
1.1 This practice direction sets out the procedure a party should follow if they wish to make an application for an order under rule 3.4(2)(a) (where a statement of case discloses no reasonable grounds for bringing or defending a claim); or under rule 3.4(2)(b) (where a statement of case is an abuse of the court’s process or otherwise likely to obstruct the just disposal of the proceedings).
1.2 The following are examples of cases where the court may conclude that particulars of claim (whether contained in a claim form or filed separately) fall within rule 3.4(2)(a):
-
(1) those which set out no facts indicating what the claim is about, for example “Money owed £5,000”,
-
(2) those which are incoherent and make no sense,
-
(3) those which contain a coherent set of facts but those facts, even if true,
do not disclose any legally recognisable claim against the defendant.
1.3 A claim may fall within rule 3.4(2)(b) where it is vexatious, scurrilous or obviously ill-founded.
3APD.1
1.4
(1) (2)
A defence may fall within rule 3.4(2)(a) where:
it consists of a bare denial or otherwise sets out no coherent statement of
facts, or
the facts it sets out, while coherent, would not amount in law to a defence
to the claim even if true.
1.5 A party may believe they can show without a trial that an opponent’s case has no real prospect of success on the facts, or that the case is bound to succeed or fail, as the case may be, because of a point of law (including the interpretation of a document). In such a case the party concerned may make an application under rule 3.4 or apply for summary judgment under Part 24 (or both) as they think appropriate.
1.6 Where a rule, practice direction or order states “shall be struck out or dismissed” or “will be struck out or dismissed” this means that the striking out or dismissal will be automatic and that no further order of the court is required.
Claims which appear to fall within rule 3.4(2)(a) or (b)
2.1 If a court officer is asked to issue a claim form which they believe may fall within rule 3.4(2)(a) or (b) they should issue it, but may then consult a judge (under rule 3.2) before returning the claim form to the claimant or tak- ing any other step to serve the defendant. The judge may on their own initia- tive make an immediate order designed to ensure that the claim is disposed of or proceeds in a way that accords with the rules.
2.2 The judge may allow the claimant a hearing before deciding whether to make such an order.
3APD.2
2.3
(1) (2)
(3)
Orders the judge may make include:
an order that the claim be stayed until further order,
an order that the claim form be retained by the court and not served
until the stay is lifted,
an order that no application by the claimant to lift the stay be heard un-
less they file such further documents (for example a witness statement
or an amended claim form or particulars of claim) as may be specified
in the order.
Where the judge makes any such order or, subsequently, an order lifting the stay they may give directions about the service on the defendant of the order and any other documents on the court file.
2.4
171
CPR 3
3APD.3
2.5 The fact that a judge allows a claim referred to them by a court officer to proceed does not prejudice the right of any party to apply for any order against the claimant.
Defences which appear to fall within rule 3.4(2)(a) or (b)
3.1 A court officer may similarly consult a judge about any document filed which purports to be a defence and which he believes may fall within rule 3.4(2)(a) or (b).
3.2 If the judge decides that the document falls within rule 3.4(2)(a) or (b) they may on their own initiative make an order striking it out. Where they do so they may extend the time for the defendant to file a proper defence.
3.3 The judge may allow the defendant a hearing before deciding whether to make such an order.
3.4 Alternatively the judge may make an order under rule 18.1 requiring the defendant within a stated time to clarify his defence or to give additional information about it. The order may provide that the defence will be struck out if the defendant does not comply.
3.5 The fact that a judge does not strike out a defence on their own initia- tive does not prejudice the right of the claimant to apply for any order against the defendant.
General Provisions
4.1 The court may exercise its powers under rule 3.4(2)(a) or (b) on applica- tion or on its own initiative at any time.
4.2 Where a judge at a hearing strikes out all or part of a party’s statement of case he may enter such judgment for the other party as that party appears entitled to.
Applications for orders under rule 3.4(2)
5.1 Attention is drawn to Part 23 (General Rules about Applications) and to Practice Direction 23A. The practice direction requires all applications to be made as soon as possible and before allocation if possible.
5.2 While many applications under rule 3.4(2) can be made without evidence in support, the applicant should consider whether facts need to be proved and, if so, whether evidence in support should be filed and served.
Applications for summary judgment
6.1 Applications for summary judgment may be made under Part 24. Atten- tion is drawn to that Part and to Practice Direction 24.
3APD.4
3APD.5
3APD.6
SECTION A CIVIL PROCEDURE RULES 1998
172
PRACTICE DIRECTION 3B
PRACTICE DIRECTION 3B—SANCTIONS FOR NON-PAYMENT OF FEES
This Practice Direction supplements CPR Rules 3.7, 3.7A1 and 3.7AA
1. If a claim is struck out under rule 3.7, the court will send notice that it has been struck out to the defendant. If a claim or counterclaim is struck out under rule 3.7A1 or 3.7AA, the court will send notice that it has been struck out to both the claimant and the defendant.
2. In relation to the notice sent out under rule 3.7 or 3.7A1, the notice will also explain the effect of rule 25.11. This provides that any interim injunction will cease to have effect 14 days after the date the claim is struck out under rule 3.7. Paragraph (2) provides that if the claimant applies to reinstate the claim before the interim injunction ceases to have effect, the injunction will continue until the hearing of the application unless the court orders otherwise. If the claimant makes such an application, the defendant will be given notice in the ordinary way under rule 23.4.
3BPD.1
3BPD.2
173
CPR 3
3CPD.1
PRACTICE DIRECTION 3C—CIVIL RESTRAINT ORDERS
This Practice Direction supplements CPR Rule 3.11
Introduction
1. This practice direction applies where the court is considering whether to make—
-
(a) a limited civil restraint order;
-
(b) an extended civil restraint order; or
-
(c) a general civil restraint order,
against a party who has issued claims or made applications which are totally without merit.
Rules 3.3(7), 3.4(6) and 23.12 provide that where a statement of case or ap- plication is struck out or dismissed and is totally without merit, the court order must specify that fact and the court must consider whether to make a civil restraint order. Rule 52.20(6) makes similar provision where the appeal court refuses an application for permission to appeal, strikes out an appellant’s notice or dismisses an appeal.
Limited Civil Restraint Orders
2.1 A limited civil restraint order may be made by a judge of any court where a party has made 2 or more applications which are totally without merit. 2.2 Where the court makes a limited civil restraint order, the party against
whom the order is made—
3CPD.2
(1)
(2) (3)
2.3
(1)
(2)
will be restrained from making any further applications in the proceed-
ings in which the order is made without first obtaining the permission
of a judge identified in the order;
may apply for amendment or discharge of the order provided he has
first obtained the permission of a judge identified in the order; and
may apply for permission to appeal the order and if permission is
granted, may appeal the order.
Where a party who is subject to a limited civil restraint order—
makes a further application in the proceedings in which the order is
made without first obtaining the permission of a judge identified in the
order, such application will automatically be dismissed—
-
(a) without the judge having to make any further order; and
-
(b) without the need for the other party to respond to it;
repeatedly makes applications for permission pursuant to that order which are totally without merit, the court may direct that if the party makes any further application for permission which is totally without merit, the decision to dismiss the application will be final and there will be no right of appeal, unless the judge who refused permission grants permission to appeal.
SECTION A CIVIL PROCEDURE RULES 1998
A party who is subject to a limited civil restraint order may not make an application for permission under paragraphs 2.2(1) or 2.2(2) without first serv- ing notice of the application on the other party in accordance with paragraph 2.5.
2.4
2.5
(1) (2)
2.6
(1) (2)
(3)
A notice under paragraph 2.4 must—
set out the nature and grounds of the application; and
provide the other party with at least 7 days within which to respond.
An application for permission under paragraphs 2.2(1) or 2.2(2)—
must be made in writing;
must include the other party’s written response, if any, to the notice
served under paragraph 2.4; and
will be determined without a hearing.
174
2.7
(1) (2) (3)
An order under paragraph 2.3(2) may only be made by—
a Court of Appeal judge;
a High Court judge or Master; or
a Designated Civil Judge or their appointed deputy.
2.8
(1)
will be restrained from issuing claims or making applications in—
-
(a) any court if the order has been made by a judge of the Court of Ap-
peal;
-
(b) the High Court or the County Court if the order has been made by
a judge of the High Court; or
-
(c) the County Court if the order has been made by a Designated Civil
Judge or their appointed deputy,
concerning any matter involving or relating to or touching upon or lead-
ing to the proceedings in which the order is made without first obtain-
ing the permission of a judge identified in the order;
may apply for amendment or discharge of the order provided he has
first obtained the permission of a judge identified in the order; and
may apply for permission to appeal the order and if permission is
granted, may appeal the order.
Where a party who is subject to an extended civil restraint order— issues a claim or makes an application in a court identified in the order concerning any matter involving or relating to or touching upon or lead- ing to the proceedings in which the order is made without first obtain- ing the permission of a judge identified in the order, the claim or ap- plication will automatically be struck out or dismissed—
-
(a) without the judge having to make any further order; and
-
(b) without the need for the other party to respond to it;
repeatedly makes applications for permission pursuant to that order which are totally without merit, the court may direct that if the party makes any further application for permission which is totally without merit, the decision to dismiss the application will be final and there will be no right of appeal, unless the judge who refused permission grants permission to appeal.
(2) (3)
3.3
(1)
(2)
PRACTICE DIRECTION 3C
Where a party makes an application for permission under paragraphs 2.2(1) or 2.2(2) and permission is refused, any application for permission to ap- peal—
-
(1) must be made in writing; and
-
(2) will be determined without a hearing.
2.9 A limited civil restraint order—
-
(1) is limited to the particular proceedings in which it is made;
-
(2) will remain in effect for the duration of the proceedings in which it is
made, unless the court otherwise orders; and
-
(3) must identify the judge or judges to whom an application for permission
under paragraphs 2.2(1), 2.2(2) or 2.8 should be made.
Extended Civil Restraint Orders
3.1 An extended civil restraint order may be made by—
-
(1) a judge of the Court of Appeal;
-
(2) a judge of the High Court; or
-
(3) a Designated Civil Judge or their appointed deputy in the County Court,
where a party has persistently issued claims or made applications which are totally without merit.
3.2 Unless the court otherwise orders, where the court makes an extended civil restraint order, the party against whom the order is made—
175
3CPD.3
CPR 3
3CPD.4
(1) (2)
3.9
(1) (2)
(3)
must be made in writing; and
will be determined without a hearing.
An extended civil restraint order—
will be made for a specified period not exceeding 3 years;
must identify the courts in which the party against whom the order is
made is restrained from issuing claims or making applications; and
must identify the judge or judges to whom an application for permission
under paragraphs 3.2(1), 3.2(2) or 3.8 should be made.
SECTION A CIVIL PROCEDURE RULES 1998
3.4 A party who is subject to an extended civil restraint order may not make an application for permission under paragraphs 3.2(1) or 3.2(2) without first serving notice of the application on the other party in accordance with paragraph 3.5.
3.5
(1) (2)
3.6
(1) (2)
(3)
3.7
(1) (2) (3)
A notice under paragraph 3.4 must—
set out the nature and grounds of the application; and
provide the other party with at least 7 days within which to respond.
An application for permission under paragraphs 3.2(1) or 3.2(2)—
must be made in writing;
must include the other party’s written response, if any, to the notice
served under paragraph 3.4; and
will be determined without a hearing.
An order under paragraph 3.3(2) may only be made by—
a Court of Appeal judge;
a High Court judge; or
a Designated Civil Judge or their appointed deputy.
3.8 Where a party makes an application for permission under paragraphs 3.2(1) or 3.2(2) and permission is refused, any application for permission to ap- peal—
The court may extend the duration of an extended civil restraint order, if it considers it appropriate to do so, but it must not be extended for a period greater than 3 years on any given occasion.
3.11 If they consider that it would be appropriate to make an extended civil restraint order—
-
(1) a Master or a District Judge in a district registry of the High Court must transfer the proceedings to a High Court judge; and
-
(2) a Circuit Judge or a District Judge in the County Court must transfer the proceedings to the Designated Civil Judge.
General Civil Restraint Orders
4.1 A general civil restraint order may be made by—
(1) a judge of the Court of Appeal;
(2) a judge of the High Court; or
(3) a Designated Civil Judge or their appointed deputy in the County Court,
where the party against whom the order is made persists in issuing claims or making applications which are totally without merit, in circumstances where an extended civil restraint order would not be sufficient or appropriate.
4.2 Unless the court otherwise orders, where the court makes a general civil restraint order, the party against whom the order is made—
3.10
(1)
will be restrained from issuing any claim or making any application in—
-
(a) any court if the order has been made by a judge of the Court of Ap-
peal;
-
(b) the High Court or the County Court if the order has been made by
a judge of the High Court; or
-
(c) the County Court if the order has been made by a Designated Civil
Judge or their appointed deputy,
176
(2) (3)
4.3
(1)
(2)
without first obtaining the permission of a judge identified in the order; may apply for amendment or discharge of the order provided he has first obtained the permission of a judge identified in the order; and may apply for permission to appeal the order and if permission is granted, may appeal the order.
Where a party who is subject to a general civil restraint order—
issues a claim or makes an application in a court identified in the order
without first obtaining the permission of a judge identified in the order,
the claim or application will automatically be struck out or dismissed—
-
(a) without the judge having to make any further order; and
-
(b) without the need for the other party to respond to it;
repeatedly makes applications for permission pursuant to that order which are totally without merit, the court may direct that if the party makes any further application for permission which is totally without merit, the decision to dismiss that application will be final and there will be no right of appeal, unless the judge who refused permission grants permission to appeal.
PRACTICE DIRECTION 3C
A party who is subject to a general civil restraint order may not make an application for permission under paragraphs 4.2(1) or 4.2(2) without first serv- ing notice of the application on the other party in accordance with paragraph 4.5.
4.4
4.5
(1) (2)
4.6
(1) (2)
(3)
4.7
(1) (2) (3)
A notice under paragraph 4.4 must—
set out the nature and grounds of the application; and
provide the other party with at least 7 days within which to respond.
An application for permission under paragraphs 4.2(1) or 4.2(2)—
must be made in writing;
must include the other party’s written response, if any, to the notice
served under paragraph 4.4; and
will be determined without a hearing.
An order under paragraph 4.3(2) may only be made by—
a Court of Appeal judge;
a High Court judge; or
a Designated Civil Judge or their appointed deputy.
4.8 Where a party makes an application for permission under paragraphs 4.2(1) or 4.2(2) and permission is refused, any application for permission to ap- peal—
(1) (2)
4.9
(1) (2)
(3)
must be made in writing; and
will be determined without a hearing.
A general civil restraint order—
will be made for a specified period not exceeding 3 years;
must identify the courts in which the party against whom the order is
made is restrained from issuing claims or making applications; and
must identify the judge or judges to whom an application for permission
under paragraphs 4.2(1), 4.2(2) or 4.8 should be made.
The court may extend the duration of a general civil restraint order, if it considers it appropriate to do so, but it must not be extended for a period greater than 3 years on any given occasion.
4.11 If they consider that it would be appropriate to make a general civil restraint order—
-
(1) a Master or a District Judge in a district registry of the High Court must transfer the proceedings to a High Court judge; and
-
(2) a Circuit Judge or a District Judge in the County Court must transfer the proceedings to the Designated Civil Judge.
4.10
177
CPR 3
D N19
D N19A
D
N19B
SECTION A CIVIL PROCEDURE RULES 1998
3CPD.5
3CPD.6
General
5.1 The other party or parties to the proceedings may apply for any civil restraint order.
5.2 An application under paragraph 5.1 must be made using the Part 23 procedure unless the court otherwise directs and the application must specify which type of civil restraint order is sought.
5.3 Examples of a limited civil restraint order, an extended civil restraint order and a general civil restraint order are annexed to this practice direction. These examples may be modified as appropriate in any particular case.
Editorial note
The following forms which are annexes to this PD can be found under Civil Procedure Forms in the online Civil Procedure Forms Volume:
178
PRACTICE DIRECTION 3D
PRACTICE DIRECTION 3D—COSTS MANAGEMENT
This Practice Direction supplements Part 3
A. Production of Costs Budgets
1. In cases where the Claimant has a limited or severely impaired life expecta- tion (5 years or less remaining) the court will ordinarily disapply cost manage- ment under Section II of Part 3.
2. An order for the provision of costs budgets with a view to a costs manage- ment order being made may be particularly appropriate in the following cases—
-
(a) unfair prejudice petitions under section 994 of the Companies Act 2006;
-
(b) disqualification proceedings pursuant to the Company Directors
Disqualification Act 1986;
-
(c) applications under the Trusts of Land and Appointment of Trustees Act
1996;
-
(d) claims pursuant to the Inheritance (Provision for Family and Depend-
ants) Act 1975;
-
(e) any Part 8 or other claims or applications involving a substantial dispute
of fact and/or likely to require oral evidence and/or extensive disclosure;
and
-
(f) personal injury and clinical negligence cases where the value of the
claim is £10 million or more.
B. Documents to be lodged for costs budgeting purposes
3.(a) Save in exceptional circumstances or where the court orders otherwise, the parties are not expected to lodge any documents other than Precedent H and the budget discussion report. Both are an- nexed, to this practice direction. If the Excel format precedent on the MOJ website is used, the calculation on page one will calculate the totals automatically and the phase totals are linked to this page also.
(b) Precedent T, also annexed to this practice direction, is to be used in the event of variation of a budget pursuant to rule 3.15A.
C. Budget format
4.(a) Unless the court otherwise orders, a budget must be in the form of Precedent H annexed to this Practice Direction. It must be in landscape format with an easily legible typeface.
(b) In cases where a party’s total costs (incurred and estimated) do not exceed £25,000 or the value of the claim as stated on the claim form is less than £50,000, the parties must only use the first page of Precedent H.
(The wording for a statement of truth verifying a budget is set out in Practice Direction 22.)
5. In deciding the reasonable and proportionate costs of each phase of the budget the court will have regard to the factors set out at Civil Procedure Rules 44.3(5) and 44.4(3) including a consideration of where and the circumstances in which the work was done as opposed to where the case is heard.
6. The table below identifies where within the budget form the various items of work, in so far as they are required by the circumstances of your case, should be included. The time estimated may have to be justified on the budget hearing along with the grade of fee earner doing the work.
7. Allowance must be made in each phase for advising the client, taking instructions and corresponding with the other party/parties and the court in respect of matters falling within that phase.
8. The time spent in preparing the budget and associated material must not 179
3DPD.1
3DPD.2
3DPD.3
CPR 3
3DPD.4 10.(a)
The assumptions that are reflected in the table below are not to be repeated. Include only those assumptions that significantly impact on the level of costs claimed such as the duration of the proceed- ings, the number of experts and witnesses or the number of interim applications envisaged. Brief details only are required in the box beneath each phase. Additional documents should only be prepared in exceptional circumstance and, where they are disregarded by the court, the cost of preparation may be disallowed.
SECTION A CIVIL PROCEDURE RULES 1998
be claimed in the draft budget under any phase. The maximum figures permit- ted under rule 3.15(5) should be inserted once the costs budget has been ap- proved by the court.
9. The ‘contingent cost’ sections of this form should be used for anticipated costs which do not fall within the main categories set out in this form. Examples might be the trial of preliminary issues, applications to amend, applications for disclosure against third parties or (in libel cases) applications re meaning. Costs which are disputed (such as the need for a particular expert) should be set out in the appropriate phase of the budget and if necessary marked as disputed. Only costs which are more likely than not to be incurred should be included.
(Variation of an approved or agreed budget is dealt with in rule 3.15A.)
D Assumptions
(b) Written assumptions are not normally required by the Court in cases where the parties are only required to lodge the first page.
Phase
Pre-action
Issue/statements of case
Includes Does NOT include
3DPD.5
D Pre-Action Protocol correspondence D D Investigating the merits of the claim and
advising client
D Settlement discussions, advising on
settlement and Part 36 offers
D All other steps taken and advice given
pre action
D Preparation of Claim Form
D Issue and service of proceedings
D Preparation of Particulars of Claim,
Any work already incurred in relation to any other phase of the budget
CMC
Disclosure
relating to statements of case
D Updating schedules and counter
schedules of loss
D Amendments to statements of case
D Completion of DQs D
D Arranging a CMC
D Reviewing opponent’s budget
D Correspondence with opponent to agree
directions and budgets, where possible
D Preparation for, and attendance at, the
CMC
D Finalising the order
D Any further CMC that is built into the
proposed directions order
Preparation of costs budget for first CMC
Applications for specific disclosure Applications and requests for non-
Defence, Reply, including taking instructions, instructing counsel and any necessary investigation
D Considering opposing statements of case and advising client
D Part 18 requests (request and answer)
D Any conferences with counsel primarily
D Obtaining documents from client and D advising on disclosure obligations
D Reviewing documents for disclosure, preparing disclosure report or D questionnaire response and list
180
Phase
Does NOT include
party disclosure
Arranging for witnesses to attend trial (include in trial preparation)
Obtaining permission to adduce expert evidence (include inCMCora separate application) Arranging for experts to attend
etc.) trial (include in
PRACTICE DIRECTION 3D
Includes
D Inspection
D Reviewing opponent’s list and
documents, undertaking any appropriate
investigations
D Correspondence between parties about
the scope of disclosure and queries
arising
D Consulting counsel, so far as
Witness Statements
Expert Reports
PTR
Trial Preparation
Trial
ADR/Settlement
appropriate, in relation to disclosure
D Identifying witnesses D
D Obtaining statements
D Preparing witness summaries
D Consulting counsel, so far as
appropriate, about witness statements
D Reviewing opponent’s statements and
undertaking any appropriate
investigations
D Applications for witness summaries
D Identifying and engaging suitable D expert(s)
D Reviewing draft and approving report(s) D Dealing with follow-up questions of
experts
D Considering opposing experts’ reports
D Any conferences with counsel primarily
relating to expert evidence D D Meetings of experts (preparing agenda
D Bundle D D Preparing and agreeing chronology, case summary and dramatis personae (if ordered and not already prepared
earlier in case)
D Completing and filing pre-trial checklists
D Correspondence with opponent to agree
directions
D Preparation for and attendance at the
trial preparation)
Assembling and/or copying the bundle (this is not fee earners’ work)
Assembling and/or copying the trial bundle (this is not fee earners’ work) Counsel’s refreshers
Preparation for
trial
Counsel’s brief
fee for trial
(include in trial
preparation)
PTR
D Trial bundles D
D Witness summonses, and arranging
D for witnesses to attend trial Any final
factual investigations Supplemental
disclosure and statements (if required)
D Counsel’s brief fee D
D Agreeing brief fee
D Any pre-trial conferences and advice
from counsel
D Pre-trial liaison with witnesses
D Solicitors’ attendance at trial D D All conferences and other activity
outside court hours during the trial D
Attendance on witnesses during the trial
D Counsel’s trial refreshers
D Dealing with draft judgment and
D related applications
D Any conferences and advice from counsel in relation to settlement
D Work directed to settlement negotiations and meetings between the parties and any other ADR (including mediation), to include Part 36 and other offers and advising the client
D Approval of settlement if needed 181
CPR 3
SECTION A CIVIL PROCEDURE RULES 1998
Phase
Includes Does NOT include
D Drafting settlement agreement or Tomlin order
D Advice to the client on settlement (excluding advice included in the pre action phase)
3DPD.6
3DPD.7
3DPD.8
3DPD.9
The parties are encouraged to use the Precedent R Budget Discussion Report annexed to this practice direction.
F. Costs management orders
12. When reviewing budgeted costs, the court will not undertake a detailed assessment in advance, but rather will consider whether the budgeted costs fall within the range of reasonable and proportionate costs.
G. Oppressive behaviour
13. Any party may apply to the court if it considers that another party is behaving oppressively in seeking to cause the applicant to spend money disproportionately on costs and the court will grant such relief as may be appropriate.
Editorial note
E.
Budget discussion reports
11. The budget discussion report required by rule 3.13(2) must set out—
-
(a) those figures which are agreed for each phase;
-
(b) those figures which are not agreed for each phase; and
-
(c) a brief summary of the grounds of dispute.
The Precedents attached to this Practice Direction (Precedents H (costs budget), R (budget discussion report) and Precedent T (particulars for the variation of a budget)) can be found under Civil Procedure Forms in the online Civil Procedure Forms Volume. Before October 2020 the diagram which now forms part of Practice Direction 3D (see para.3DPD.5) was set out in a separate Guid- ance Note. In October 2019 many amendments were made to the Guidance Note. As a result, the format of budgets first drafted before October 2019 may differ from the current format. Before October 2019:
D In Phase 2 (Issue/statements of case) the topic “Amendments to statements of case” appeared in the “Does not include” column for this phase.
D In Phase 3 (CMC) a new topic “Subsequent CMCs” appeared in the “Does not include” column for this phase.
D In Phase 8 (Trial Preparation) the item “Counsel’s brief fee” appeared in the “Does not include” column for this phase.
D In Phase 9 (Trial) the item “Counsel’s brief fee and any refreshers” appeared in the “Includes” column.
D Phase 10 was then entitled “Settlement” and a reference to ADR was made only in the “Does not include” column. No reference was made to the topic of “Approval of settlement if needed”.
182
PRACTICE DIRECTION 3E
PRACTICE DIRECTION 3E—COSTS CAPPING
This Practice Direction supplements Section III of CPR Part 3
Section I—General Rules about Costs Capping
When to make an application
1.1 The court will make a costs capping order only in exceptional circumstances.
1.2 An application for a costs capping order must be made as soon as pos- sible, preferably before or at the first case management hearing or shortly afterwards. The stage which the proceedings have reached at the time of the application will be one of the factors the court will consider when deciding whether to make a costs capping order.
Costs budget
2 The budget required by rule 3.20 must be in the form of Precedent H an- nexed to Practice Direction 3D—Costs Management.
Schedule of costs
3EPD.1
3EPD.2
3EPD.3
3
(a)
(b)
The schedule of costs referred to in rule 3.20(3)— must set out—
-
(i) each sub-heading as it appears in the applicant’s budget (column 1);
-
(ii) alongside each sub-heading, the amount claimed by the applicant in the applicant’s budget (column 2); and
-
(iii) alongside the figures referred to in subparagraph (ii) the amount that the respondent proposes should be allowed under each sub- heading (column 3); and
must be supported by a statement of truth.
Assessing the quantum of the costs cap
4.1 When assessing the quantum of a costs cap, the court will take into ac- count the factors detailed in rule 44.5 and the relevant provisions supporting that rule in the Practice Direction supplementing Part 44. When considering a party’s budget of the costs they are likely to incur in the future conduct of the proceedings, the court may also take into account a reasonable allowance on costs for contingencies.
Section II—Costs Capping in Relation to Trust Funds
Costs capping orders in relation to trust funds
5.1 In this Section, “trust fund” means property which is the subject of a trust, and includes the estate of a deceased person.
3EPD.4
3EPD.5
5.2
(a) (b)
This Section contains additional provisions to enable—
the parties to consider whether to apply for; and
the court to consider whether to make of its own initiative,
a costs capping order in proceedings relating to trust funds.
5.3 This Section supplements rules 3.19 to 3.21 and Section I of this Practice
Direction.
5.4 Any party to such proceedings who intends to apply for an order for the
payment of costs out of the trust fund must file and serve on all other parties written notice of that intention together with a budget of the costs likely to be incurred by that party.
5.5
(a) (b)
The documents mentioned in paragraph 5.4 must be filed and served—
in a Part 7 claim, with the first statement of case; and
in a Part 8 claim, with the evidence (or, if a defendant does not intend to
serve and file evidence, with the acknowledgement of service).
183
CPR 3
SECTION A CIVIL PROCEDURE RULES 1998
5.6 When proceedings first come before the court for directions the court may make a costs capping order of its own initiative whether or not any party has applied for such an order.
184
PRACTICE DIRECTION 3F
PRACTICE DIRECTION 3F—REQUESTS FOR THE APPOINTMENT OF AN ADVOCATE
TO THE COURT
This Practice Direction supplements CPR, rule 3.1
Introduction
1. The following provisions are taken from a memorandum agreed between the Attorney General and the Lord Chief Justice dated 19 December 2001. They give guidance about making a request for the appointment of an Advocate to the Court (formerly called an “amicus curiae”).
2. In most cases, an Advocate to the Court is appointed by the Attorney General, following a request by the court. In some cases, an Advocate to the Court will be appointed by the Official Solicitor or the Children & Family Court Advisory Service (CAFCASS) (see paragraphs 11 and 12 below).
The role of an Advocate to the Court
3. A court may properly seek the assistance of an Advocate to the Court when there is a danger of an important and difficult point of law being decided without the court hearing relevant argument. In those circumstances the At- torney General may decide to appoint an Advocate to the Court.
4. It is important to bear in mind that an Advocate to the Court represents no-one. Their function is to give to the court such assistance as they are able on the relevant law and its application to the facts of the case. An Advocate to the Court will not normally be instructed to lead evidence, cross-examine wit- nesses, or investigate the facts. In particular, it is not appropriate for the court to seek assistance from an Advocate to the Court simply because a defendant in criminal proceedings refuses representation.
5. The following circumstances are to be distinguished from those where it will be appropriate for the court to seek the assistance of an Advocate to the Court—
-
(a) where a point of law which affects a government department is being argued in a case where the department is not represented and where the court believe that the department may wish to be represented;
-
(b) where the Attorney believes it is necessary for them to intervene as a party in the Attorney’s capacity as guardian of the public interest;
-
(c) where the court believes it is appropriate for a litigant in person to seek free (pro bono) assistance;
-
(d) where, in a criminal trial, the defendant is unrepresented and the Advocate to the Court would be duplicating the prosecutor’s duty as a minister of justice “to assist the court on all matters of law applicable to the case”;
-
(e) where in a criminal case in relation to sentencing appeals there are is- sues of fact which are likely to arise and the prosecution ought to be represented, or it would be reasonable to ask the prosecutor to be present and address the court as to the relevant law.
6. In the first of these five cases, the court may invite the Attorney to make arrangements for the advocate to be instructed on behalf of the department. In the second, the court may grant the Attorney permission to intervene, in which case the advocate instructed represents the Attorney. In neither case is the advocate an Advocate to the Court.
7. In the third case the court may grant a litigant in person an adjournment to enable them to seek free (pro bono) assistance. In doing so, the court should bear in mind that it is likely to take longer to obtain free (pro bono) representa- tion than funded representation. In contrast to an Advocate to the Court, a free (pro bono) legal representative will obtain their instructions from the litigant and will represent the interests of that party. Their role before the court and
3FPD.1
3FPD.2
185
CPR 3
3FPD.3
duty to the court will be identical to that of any other representative of the parties. Accordingly, it will not be appropriate for the court to take such a course where the type of assistance required is that provided by an Advocate to the Court.
8. In the fourth case the prosecutor’s special duty is akin to an Advocate to the Court. In the fifth case, in relation to appeals against sentence where the defendant is represented, it may be preferable to request the attendance of the prosecutor who will be able to address the court on issues of fact and law. It would not be proper for an Advocate to the Court to take instructions from the prosecuting authority in relation to factual matters relating to the prosecution. An Advocate to the Court should only be asked to address the court as to the relevant law.
Making a request to the Attorney General
9. A request for an Advocate to the Court should be made by the Court as soon as convenient after it is made aware of the point of law which requires the assistance of an Advocate to the Court. The request should set out the circumstances which have occurred, identifying the point of law upon which assistance is sought and the nature of the assistance required. The court should consider whether it would be sufficient for such assistance to be in writing in the form of submissions as to the law, or whether the assistance should include oral submissions at the hearing. The request should ordinarily be made in writ- ing and be accompanied by the papers necessary to enable the Attorney to reach a decision on the basis of a proper understanding of the case.
10. The Attorney will decide whether it is appropriate to provide such as- sistance and, if so, the form such assistance should take. Before reaching a decision, the Attorney may seek further information or assistance from the court. The Attorney will also ask the court to keep under review the need for such assistance. Where the circumstances which gave rise to the original request have changed, such that the court may now anticipate hearing all relevant argu- ment on the point of law without the presence of an Advocate to the Court, either the Court or the Attorney may ask the Advocate to the Court to withdraw.
Requests to the Official Solicitor or CAFCASS
11. A request for an Advocate to the Court may be made to the Official Solicitor or CAFCASS (Legal Services and Special Casework) where the issue is one in which their experience of representing children and adults under dis- ability gives rise to special experience. The division of responsibility between them is outlined in Practice Notes reported at [2001] 2 FLR 151 and [2001] 2 FLR 155.
12. The procedure and circumstances for requesting an Advocate to the Court to be appointed by the Official Solicitor or CAFCASS are the same as those applying to requests to the Attorney General. In cases of extreme urgency, telephone requests may be made. In some cases, the Official Solicitor will be appointed as Advocate to the Court. The Official Solicitor may be given direc- tions by the Court authorising the Official Solicitor to obtain documents, conduct investigations and enquiries and to advise the Court. The Official Solicitor may appear by counsel or an in-house advocate.
Requests for an Advocate to the Court should be addressed as follows—
The Legal Secretary, The Legal Secretariat to the Law Officers, Attorney General’s Office, 102 Petty France, London SW1H 9EA.
Telephone: 020 7271 2492
Office of the Official Solicitor to the Senior Courts, Victory House, 30–34 Kingsway, London WC2B 6EX
Telephone: 020 3681 2600 Fax: 020 3681 2762
3FPD.4
SECTION A CIVIL PROCEDURE RULES 1998
186
PRACTICE DIRECTION 3F
E-mail: enquiries@offsol.gsi.gov.uk
CAFCASS (Legal Services [and Special Casework]) 3rd Floor, 21 Bloomsbury Street, London, WC1B 3HF
Telephone: 0175 323 5272
For information about free (pro bono) services contact:
Bar Pro Bono Unit, 48 Chancery Lane, London WC2A 1JF
Telephone: 020 7092 3960.
187
CPR 3
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