After Mitchell by Robert Sheridan

The Court of Appeal has given judgment in Denton & Ors v. TH White [2014] EWCA Civ 906 in which it has effectively abandoned Mitchell and given new guidance as to when relief from sanctions under CPR 3.9 may be given.

The Court of Appeal considered that Mitchell was not being applied correctly.  Courts were tending to ask (a) whether the breach was trivial and (b) if not, whether there was a good reason for the breach, and deciding whether to grant relief solely by reference to these questions.  So, if the breach was not trivial and there was no good reason, relief would be refused.

This approach was wrong and in the judgment of the majority (Jackson LJ dissenting), the correct approach was as follows.

(1)  The court should consider whether the breach was significant or serious.  Triviality is no longer the test.  There is no attempt to explain the difference between significant and serious and it may be that they are synonymous.  If the breach is not significant or serious, relief should normally be granted.

(2)  If the breach is significant or serious, the court should consider why the failure or default occurred.  Is it good (e.g. the solicitor died on the way to the DX box) or bad (e.g. the solicitor’s dog ate his witness statement)?

(3) If the reason is a good one, relief will normally be granted; if it is a bad one, the court will move onto the third stage.  This is the crucial difference between this case and Mitchell.  Significant/ serious breaches without a good explanation will no longer fail to attract relief as a matter of course.  Rather, the court must consider all the circumstances of the case so as to enable it to deal justly with the application.  However, some circumstances are more equal than others (but not according to Jackson LJ in his dissent) and of ‘particular importance’ are the two factors singled out in the rule itself: the need for litigation to be conducted efficiently and at proportionate cost and the need to enforce compliance with rules, practice directions and orders.

The effect of this decision should be to deter opportunistic attempts to obtain a windfall (which attempts the court warned would be penalised in costs both in the application and in the action).  Whether it will discourage further satellite litigation remains to be seen.

Robert Sheridan