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England and Wales High Court (Queen's Bench Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Adlington & Ors v ELS International Lawyers LLP [2013] EWHC B29 (QB) (12 December 2013) URL: http://www.bailii.org/ew/cases/EWHC/QB/2013/B29.html Cite as: [2014] 1 Costs LR 105, [2013] EWHC B29 (QB) |
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QUEEN'S BENCH DIVISION
BIRMINGHAM DISTRICT REGISTRY
B e f o r e :
(Sitting as a Judge of the High Court)
____________________
ROBERT ADLINGTON & 133 OTHERS |
Claimants |
|
- and - |
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ELS INTERNATIONAL LAWYERS LLP (In Administration) |
Defendant |
____________________
____________________
Crown Copyright ©
His Honour Judge Oliver-Jones QC:
References in this judgment to the application bundle will be as follows: AB / (File number) / Tab number / page number). There are 5 files.
Schedule 1 listed the names of 20 Claimants; they were each ordered to file and serve an 'Individual Particulars of Claim' by 4.00pm on 19th June 2013, failing which their claim "shall stand dismissed without further Order" and their name would be removed from that Schedule to the Claim Form. This is paragraphs 1 and 7 of my Order. Three of these Claimants were those to whom I have already referred, where relief from sanction is not opposed; it was agreed that they should be moved from Schedule 1 to Schedule 2 but this was not, as it is agreed it should have been, reflected in the sealed Order. The reason why they were moved was because they were unavailable to sign their particulars of claim due to being away on holiday;
Schedule 2 listed the names of 87 Claimants; they were each ordered to file and serve an 'Individual Particulars of Claim' by 4.00pm on 1st July 2013 failing which the same sanction applied. This is paragraphs 2 and 8 of my Order. The seven claimants on whose behalf the original (unamended) first application is made, were members of this group;
Schedule 3 listed the names of 27 Claimants; they were each ordered to file and serve an 'Individual Particulars of Claim' by 4.00pm on 15th July 2013 failing which the same sanction applied. This is paragraph 3 and 9 of my Order. Mr. Morgan was one of the Schedule 3 group of claimants.
"The Defendant provided the Claimants with professionally negligent legal advice, occasioning loss to the Claimants. The Defendant will seek to pass the liability of (sic) the advice to another party, of (sic) which, the Claimants have no binding relationship above and beyond the Defendant."
This was not a particularly clear endorsement either in terms of the use of English or its substance, other than there being an allegation of 'professional negligence'. The value of the claim was pleaded as "In excess of £1,000,000 (to be revised, if so required)". The Claim Form was valid for service until 9th September 2012. On 5th September 2012, before service, the Claim Form was amended to add European Legal Solutions SL (hereinafter 'SL') as Second Defendant. In addition the 'brief details of claim' were amended to add the words:
"The Claimants causes of action arise in and/or (sic) breaches of contract and/or negligence."
Annexed to the Claim Form was a list of the names and addresses of the claimants. The Claim Form was served on ELS International Lawyers LLP but was never served on European Legal Solutions SL. The validity of the Claim Form for service on 'SL' expired on 9th September 2012.
"By on or before 4pm on 31 May 2013 the Claimants shall file and serve on the First Defendant case specific Particulars of Claim, which Particulars of Claim shall contain in each case the information referred to in the document annexed to this Order and marked Exhibit 2."
In addition, it was ordered that:
"Each case specific Particulars of Claim shall have annexed to it the documents which are referred to at paragraphs 11 to 15 of the Amended (sic) Particulars of Claim in respect of each Claimant".
Mr. Cotter points out that apart from the eight Claimants the subject of his (now amended) application - an order for relief having, as stated above, been conceded for three other claimants, even though, by virtue of CPR 3.8(3)[1] it cannot be the subject of agreement between the parties - all other Particulars of Claim were filed and served as ordered - that is, by 123 claimants. The breaches of my order by the eight claimants arose because they were either abroad or away from home and therefore unable to sign and return the documents by fax/scan and/or email before the deadline, notwithstanding that they were all advised on 21st June that the document would need to be returned to Mr. Cotter by 30th June (a Sunday), and would not be received by them until Friday 28th June. The Claimants were not advised of the terms of the Order of 12th June. I pause to observe (a) that the date of notification, allowing for receipt, was late - 9 days after my Order - and the method was risky viz. by post and (b) that Mr. Cotter was really tempting fate in relying upon the successful receipt both by and from his clients, particularly the return of the signed Particulars of Claim by a Sunday when they were required to be filed and served by 4.00 pm the following day, a Monday (1st July). Quite apart from this foreseeable difficulty, Mr. Cotter points to what he contends were a number of unforeseen obstacles to the successful implementation of this plan, including IT problems while moving offices during the week commencing 24th June 2013, and the fact that some Claimants were contactable but unable to sign documents before the due date and time.
"...no such application was issued due to an assumption that no point would be taken where the Claimant was on holiday or unable to sign the documentation."
It is unclear what he means by "no point would be taken". If a claim is dismissed, there would be no points left to be taken by anybody! In his witness statement Mr. Cotter asserted that at the hearing before me on 12th June, Leading Counsel for the Defendant had "specifically stated that no silly points would be taken where individuals were on holiday. Subsequent to this witness statement the Defendant obtained the entire transcript of the hearing, from which it is quite clear that Leading Counsel's comments in this respect were limited to Schedule 1 claimants [AB 4/4/242]. It was unnecessary to obtain the entire transcript; the relevant, relatively short, passages would have been sufficient. Mr. Cotter consequently, either mis-heard, misunderstood, mis-recorded or mis-remembered what had been said. Such has been, in my judgment, the general lack of competence in the conduct of this litigation by Mr. Cotter, that I can accept that this amounts to another 'error' on his part and not an attempt to explain away contumelious default.
"You may serve a witness statement and I will consider it with my clients but you are now in a position where you will have to obtain an order granting relief from sanctions rather than an extension of time as you will I am sure appreciate. I do not regard my clients as taking "silly points" by expecting obedience to final orders".
(a) Samuel Charlton, Rex Charlton and Margaret Charlton advised on Tuesday 25th June 2013 that they could not sign until 2nd July as they were in Vienna from 27th June, and their son (Samuel) was in Japan [AB/4/2/36]. As in other cases it was submitted on behalf of the Defendant that this is an inadequate explanation to justify relief being granted without more, including evidence as to when they were first made aware of the need for signing, and why nothing was done in response to their e-mail, before they went away;
(b) Barry Evans had left UK for Australia (British Lions Tour) and would not be back until 8th July [AB/4/2/38: email from Mr. Evans dated 30th June 2013]. Again criticism is levelled at the fact that there is no evidence as to when Mr. Evans left England;
(c) Karen Jefferson was in America until 6th July although her husband, also a claimant, was able to file and serve on time [AB/4/2/40: email from Mr. Jefferson dated 28th June 2013];
(d) Howard Lewis and Jennifer Lewis : an e-mail dated 26th June 2013 [AB/4/2/42] from one Simon Radley, also a Claimant [No. 102] and a colleague of Mr. and Mrs. Lewis, informed Mr. Cotter that the Lewis's were "away" until the weekend of 6th / 7th July in the UK "so can pick up emails (but) I believe will not have the facility to scan a reply to you".
It must be observed that when the order was made on 12th June 2013, one would have expected that it would have been known what the position was about availability to comply - I was assured at hearing that Mr. Cotter DID know [see AB/4/4/ 236 transcript] - but apparently this was not the case for all claimants.
The witness statement of Ms Hughes-Williams [AB/4/3/152] in response to the Claimants' application for relief from sanction, apart from reciting the history adds nothing that, in my judgment, is material to the determination of the application.
The Law
(1) These Rules are a new procedural code with the overriding objective of enabling the court to deal with cases justly and at proportionate cost.
(2) Dealing with a case justly and at proportionate cost includes, so far as is practicable -
(a) ensuring that the parties are on an equal footing;
(b) saving expense;
(c) dealing with the case in ways which are proportionate -
(i) to the amount of money involved;
(ii) to the importance of the case;
(iii) to the complexity of the issues; and
(iv) to the financial position of each party;
(d) ensuring that it is dealt with expeditiously and fairly; and
(e) allotting to it an appropriate share of the court's resources, while taking into account the need to allot resources to other cases; and (f) enforcing compliance with rules, practice directions and orders.
CPR 3.9 now reads (the previous rule being shown in deleted form):
(1) On an application for relief from any sanction imposed for a failureto comply with anyrule, practicedirection or court order the court will consider all thecircumstances including
(a)theinterests of theadministration of justice;
(b)whether theapplication for relief hasbeen made promptly;
(c)whether the failure to comply was intentional;
(d)whether there is agoodexplanation for thefailure;
(e)theextent to which the party in default has complied with other rules, practicedirections,court orders and any relevant preaction protocol;
(f)whether the failureto comply was caused by theparty or his legalrepresentative;
(g)whether the trial dateor the likely trial datecan still be met if relief is granted;
(h)theeffect which thefailureto comply had oneach party; and
(i)the effect which the granting of relief would haveon each party.
(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—
(a) for litigation to be conducted efficiently and at proportionate cost: and
(b) to enforce compliance with rules, practice directions and orders:
(2) An application for relief must be supported by evidence.
"There is a concern that relief against sanctions is being granted too readily at the present time. Such a culture of delay and non-compliance is injurious to the civil justice system and to litigants generally... After (1st April 2013) litigants who substantially disregard court orders or the requirements of the Civil Procedure Rules will receive significantly less indulgence than hitherto."
Subsequently, in Venulum Property Investments Ltd v Space Architecture Ltd & Another [2013] EWHC 1242 (TCC) (a case in which Mr. Wignall also appeared) the Fred Perry case was cited with approval, and Edwards-Stuart J. added that in respect of CPR 1.1(2)(f):
"I regard the addition of subparagraph (f) to the overriding objective as requiring the court to take a more robust approach when exercising a discretion to extend time for service of a claim form or particulars of claim" - as it was in that case).
'The new rule explicitly refers back to the overriding objective, stressing the need in dealing with a case justly, to take account of proportionate cost and the need to enforce rule compliance. As such it expressly refers back to the need to ensure that questions concerning relief from sanctions are not simply considered by reference to the immediate litigation, but to the wider public interest" (paragraph 19).
"Tough rules but lax application; tough rules but a culture of toleration; and lax application and toleration are all fatal to the new philosophy. By emphasising the need to take account of the new explicit elements of the overriding objective, rule 3.9 is intended to eliminate lax application and any culture of toleration" (paragraph 23).
"....the relationship between justice and procedure has changed. It 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. It has changed because doing justice in each set of proceedings is to ensure that proceedings are dealt with justly and at proportionate cost. Justice in the individual case is now only achievable through the proper application of the CPR consistently with the overriding objective" (paragraph 26).
"The tougher, more robust approach to rule compliance and relief from sanctions is intended to ensure that justice can be done in the majority of cases. This requires an acknowledgment that the achievement of justice means something different now. Parties can no longer expect indulgence if they fail to comply with their procedural obligations. Those obligations not only serve the purpose of ensuring that they conduct the litigation proportionately in order to ensure their own costs are kept within proportionate bounds. But more importantly they serve the wider public interest of ensuring that other litigants can obtain justice efficiently and proportionately, and that the court enables them to do so" (paragraph 27).
Ian Wyche v Careforce Group plc [2013] EWHC 3282
Rayyan Al Iraq Co Ltd v Trans Victory Marine Inc [2013] EWHC 2696(Comm).
The second of these decisions was subsequently disapproved in Mitchell (supra). The former was not expressly disapproved but was the subject of comment [see paragraphs 47 and 48 of the judgment of the Master of the Rolls.]
(a) when dealing with applications under CPR 3.9, the need (i) for litigation to be conducted efficiently and at proportionate cost and (ii) to enforce compliance with rules, practice directions and court orders ....should now be regarded as of paramount importance and be given great weight, these being the only considerations which have been singled out for specific mention in the rule [paragraph 36];(b) although regard should be had to all the circumstances of the case, the other circumstances should - subject to points set out below - be given less weight than the two considerations which are specifically mentioned [paragraph 37];
(c) it will usually be appropriate to start by considering the nature of the non-compliance. If this can properly be regarded as trivial, for example "if there has been no more than an insignificant failure to comply with an order, the court will usually grant relief provided the application is made promptly". This will include cases where there has been a failure of form rather than substance or where the party has narrowly missed the deadline imposed by the order, but has otherwise fully complied with its terms [paragraph 40].
(d) if the non-compliance cannot be characterised as trivial, then the burden is on the defaulting party to persuade the court to grant relief. In these circumstances the court will want to consider why the default occurred. If there is good reason for it, the court will be likely to decide that relief should be granted [paragraph 41];
(e) mere overlooking a deadline, whether on account of overwork or otherwise, is unlikely to be a good reason. Pressure of work will rarely be a good reason [paragraph 41];
(f) good reasons are likely to arise from circumstances outside the control of the party in default [paragraph 43];
(g) "well-intentioned incompetence, for which there is no good reason, should not usually attract relief from a sanction unless the default is trivial" [paragraph 48];
(h) applications for an extension of time made before time has expired will be looked upon more favourably than applications for relief from sanction made after the event [paragraph 41];
(i) the new approach seeks to have regard to a wide range of interests and judges should not focus exclusively on doing justice between the parties in the individual case [paragraph 51];
(j) thus the question will be : was the default by the party or their solicitor minor or trivial and, if not, was there a good excuse for it? [see paragraph 59].
The Submissions of the parties in the light of Mitchell
(a) that "in this case all of the 134 Particulars of Claim had been compiled before the applicable deadlines but not signed (in the relevant cases), the Order having required a statement of truth to be appended by the claimant his- or herself. In the context of the fact that (a) the stay of proceedings applied to 21st September for the Defendant's consideration, (b) Mr. Cotter's misunderstanding as to the nature of the concession made by Mr McPherson QC, (c) the fact that the signed statements of case were all submitted on or before 15th July (the final deadline for tranche 3), (d) the fact that the vast proportion of the statements of case were signed by the stipulated deadlines, then the breach is one caught by the maxim" 'de minimis non curat lex'. In other words, Mr. Wignall submitted that the breaches could properly be regarded as trivial;(b) that even if the breaches cannot be considered trivial then the following factors, in addition to those set out in (a) above, are sufficient for the defaulting claimants to satisfy the burden of demonstrating that relief should be granted:
(i) although there should be a 'no-nonsense approach' to the enforcement of orders, the rules whether as formerly expressed or as now revised, do not make compliance an end in itself which is superior to doing justice in any case, "It has not changed the CPR into tripwires for the unwary or incompetent". Much of the problem that arose in this case was a consequence of either Mr. Cotter's naivety, over-optimism or incompetence, at least in his approach to organising what was required for compliance. Although (barely arguably) he did 'well' to deliver 100 Particulars of Claim by 1st July there should have been no stragglers. The fact that there were, was the product of human error in terms of organisation of work, coupled with a lack of planning to guard against the eventuality that some claimants might not physically be able to sign their Particulars of Claim;(ii) Given the two month period of stay and the lack of specific requests for information during that time, the dismissal of the 8 Claimants' claims amounts to no more than a pure windfall to the Defendant, as they must have known when default was anticipated. Reinstating these Claimants would cause no prejudice at all either to the Defendant or to the Court or the litigation generally, particularly given that the time for filing a Defence has not yet expired;(iii) Had an extension of time been sought on 1st July it would almost certainly have been granted. Mr. Cotter's error was to believe that Defendant would agree to this;(iv) To refuse relief would be a disproportionate response. Mr. Cotter's error or errors were regrettable but not egregious;(v) It would be bizarre if, as is the case with some of these claimants, they could not proceed but members of their family/syndicate could. It merely serves to underline the windfall to the Defendant and lack of prejudice, particularly given the likelihood of evidence being given by one family or syndicate member on behalf of another;(vi) The difficulty faced by the relevant claimants on the 1st July could, and should, have been dealt with on 1st July withminimal expense and on paper. The Defendant's stance was unreasonable;(vii) Although the 'efficient' conduct of litigation is expressly identified in subparagraph (a) of CPR 3.9(1) as a factor that needs to be taken into account, this is not (yet) a case where 'proportionate cost' is a factor which tips the balance against relief being granted. Whilst there has been serious inefficiency in the conduct of the litigation since (as well as before) 12th June, the 'fault' has now been corrected and the future conduct of this litigation following service of defences will be the subject of robust case-management directions, potentially involving 'unless orders' as baseline case-management. The fact that the litigation has got off to a bad start does not mean that it cannot be controlled efficiently and at proportionate cost hereafter;(viii) Again, although the need to enforce compliance with (in this case) orders of the court also is explicitly identified as being a circumstance which must be considered, this cannot, of itself, preclude the granting of relief in a case where it is just to do so; otherwise there would be no need for a rule permitting 'relief to be granted at all.
(a) "there is simply no way that their non-compliances (ie their failures to serve Individual Particulars of Claim in the face of an Unless Order that they do so) can be said to have been 'trivial'" even if regard is had solely to terms of the order itself and the conduct in failing to comply";(b) utilising the expressions to be found in the judgment in Mitchell, the failures cannot be said to have been ones of 'form not substance', nor can they be said to have been the equivalent of 'narrowly missing a deadline'. The failures cannot be said to have been 'insignificant';
(c) the absurdity of any suggestion that the non-compliance was trivial becomes more plain when considering the conduct against the repeated woeful failures of those claimants to comply with rules, orders and practice directions, every step taken having been either defective or late;
(d) the position of Mr. Morgan was no different to that of the seven claimants, even though the nature of the default was different;
(e) there is no good explanation for the instances of non-compliance that resulted in the claims of 8 claimants being struck out. Paragraph 41 of the judgment in Mitchell must apply equally to a solicitor who, as in the instant case, takes on work that, for whatever reason, is beyond his capabilities and management skills;
(f) having regard to paragraph 58 of the judgment in Mitchell:
"...The expectation is that the sanction will usually apply unless (i) the breach is trivial or (ii) there is a good reason for it. It is true that the court has the power to grant relief, but the expectation is that unless (i) or (ii) is satisfied, the two factors mentioned in the rule will usually trump other circumstances"there is no exceptional reason in this case to disapply the sanction imposed by the June 2013 Order and the Claimants have no submitted that their cases are in any way exceptional for such purposes;
(g) matters such as lack of prejudice to the Defendant and the fact that the 'response' of dismissal of the eight claims might appear disproportionate to their individual instances of non-compliance, cease to have any, or any significant, relevance, given that the approach should no longer be on doing justice between the parties in the individual case';
(h) it would be bizarre to conclude that provided any non-compliance is not committed by all or most of the claimants in this litigation, the defaulting claimants should be granted relief from sanction so that they can remain part of the larger pool of claimants. "Large scale litigation such as this needs to be conducted efficiently on behalf of all claimants, and a defaulting claimant should not be better off simply because he or she stands alongside non-defaulting claimants";
(i) Whatever stance was taken at material times by the Defendant or its solicitors, that is not a factor of relevance to the question of whether or not relief should be granted.
I will now apply this guidance in determining the application for relief in the present case.
(a) the failure in these cases was, in my judgment a failure of form rather than substance, and, as such, was an insignificant failure that, in the context of my order as a whole and the reasoning underlying the sanction, can properly be regarded as trivial. Particulars of Claim had, as a matter of fact, been produced before the time expired. They were, as a matter of fact, served very shortly thereafter and thus only "narrowly missed the deadline" because of the need for signatures. Application for relief was made promptly. In my judgment, had application been made before 4.00 pm on 1st July (or 15th July in the case of Mr. Morgan), it would almost certainly have been granted, and, I would venture to add, would probably not have been opposed. Consequently, on this issue I accept the Claimant's submissions and reject those advanced on behalf of the Defendant;(b) the 'nature' of non-compliance cannot, in my judgment, be divorced from consideration of the 'consequences' of non-compliance. Whether or not a failure to comply with an order is 'significant' or 'insignificant' must involve having regard to consequences. In these cases there were no adverse consequences at all, either to the Defendant or to the efficient conduct overall of this litigation; on a purely statistical basis the default affects only 6% of the claims faced by the Defendant and the granting of relief is unlikely, with robust future case management, to have any effect at all on progression of the action, particularly as it is unlikely that all 134 claims will proceed to trial together, as was submitted, in my view correctly, by Mr. Wignall. Further, it was part of my order that there would be a stay for a period of two months following service of the Particulars of Claim for Schedule 3 Claimants; this was to allow the Defendant the opportunity of considering all 134 Particulars of Claim before either admitting the claims or filing a defence. There were no 'stragglers' at the time the stay commenced and the 'breaches' had been remedied in terms of their substance;
(c) given my conclusion that the default is trivial in these cases, then my criticisms of competence on the part of those handling these claims does not fall to be considered;
However, notwithstanding the above comments, I will clearly consider any submissions as to the appropriate costs order if the parties attend on the occasion when this judgment is handed-down.
His Honour Judge Oliver-Jones QC
12th December 2013
Note 1 CPR 3.8(3) : Where a rule, practice direction or court order - (a) requires a party to do something within a specified time, and (b) specifies the consequences of failure to comply, the time for doing the act in question may not be extended by agreement between the parties. [Back]