Will common sense be applied to Relief from Sanctions and will fair play prevail in the litigation world? Asks Peter Kaye, head of commercial litigation at Linder Myers Solicitors.
The landmark decision by the Court of Appeal on the 4th July was met by a sigh of relief by many in the legal profession with the courts clarifying a new pragmatic approach to how the judiciary will deal with applications for relief from sanctions in the future.
The judgment, which was applied to three test cases, deemed the Mitchell guidance a ‘misunderstanding’ with greater clarity handed down providing a platform for a new culture to be borne within the litigation world.
While Mitchell resulted in a hard line, black and white approach to compliance breaches, the Denton decision promises more sensible weighting to non-compliance encouraging both parties in litigation matters to choose their battles well.
Another interesting facet will be what happens next with regards to historic appeals for relief from sanctions dating back to Mitchell. Will the courts now reconsider these and if so, who will bear the subsequent costs of this – the courts or the lawyers?
Ultimately, the profession exists to provide a service to clients and with this in mind, the client shouldn’t pay the price while the legal profession adjusts to the new rules.
Emphasising a differential between trivial and more serious breaches going forward, the Court of Appeal’s decision is a significant shift from the one size fits all approach of Mitchell. The effects of this will be interesting to see over the coming months with parties who have previously used Mitchell to gain a litigation advantage, potentially facing hefty cost penalties in the future.
The boot is now on the other foot with the party opposing a relief from sanctions now having to demonstrate that their opponent’s default is serious and significant enough for an application to be rejected, rather than the defaulting party demonstrating its triviality.
While rules remain in place, and compliance remains important to the conduct of efficient litigation cases, Denton has injected a fairer approach when weighing up the significance of a breach. Master of the Rolls Lord Dyson has stated that future unreasonable and opportunistic refusals to agree extensions of time and opposition to applications for relief will attract heavy cost penalties.
Whether this will foster greater collaboration between litigating parties, for the ultimate benefit of the clients being represented, remains to be seen. Post Denton, there is a sense that the courts have a wider scope and discretion, however, there is yet to be a decision which truly tests the waters.
As the post Denton era develops, even greater clarity will be required to define distinct parameters between ‘trivial’ and ‘serious’. Until then, it is unlikely that opposing parties will simply forego an opportunity to gain an advantage without some level of dispute over whether an application should be granted.
