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When the going gets tough...

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From 1st April 2013, parties to proceedings can "no longer expect indulgence if they fail to comply with their procedural obligations” under the Civil Procedure rules admonished Lord Dyson, Master of the Rolls, in his lecture to the Holdsworth Club last week.

Parties have always benefited from the courts “indulgence” or more forgiving nature when they fail to comply with their duties under the Civil Procedure Rules. Excuses abound and the Court relaxes their grip on the reins of enforcement. Lord Dyson claims such an attitude is based on the court’s intent to see justice prevail in individual cases. There will no longer be a “culture of toleration of delay and non-compliance with court orders”. The focus instead ought to be the application of these rules and overt compliance and enforcement of the same across the legal system. The court's indulgence in individual matters has to take a backseat when considering the implications for the whole of the legal system.

This approach will be widely applicable to both compliance with the rules and relief from sanctions but will also be applicable to case management, costs management and costs budgeting.

Henry (Henry v News Group Newspapers [2013] EWCA Civ 19)

If the intent, in part, of the Jackson reforms is to see greater and more exact compliance with the Civil Procedure Rules then the judgment in Henry, to some, derailed and lessened the impact of a purportedly more robust approach.

In Henry, the court did not enforce the new costs management rules as was anticipated. Despite the departure from the budget, the court decided that there was good reason for doing so. The Court decided that the object of the practice direction is twofold:

  1. to ensure that the costs incurred in connection with the proceedings are proportionate to what is at stake and
  2. to ensure that one party is unable to exploit superior financial resources by conducting the litigation in a way that puts the other at a significant disadvantage.

The Court in its judgment – pre 1st April – decided that neither party were in a financially adverse position and nor was there an inequality of arms. The failure to comply with the practice direction did not put the paying party at a disadvantage in terms of its ability to defend the claim. A refusal to depart from the budget for failure to comply with the practice directions would achieve nothing beyond penalising the receiving party which would be unreasonable and disproportionate. Therefore the exceeded budget was rubber stamped.

Lord Dyson on Henry

Lord Dyson does not share the view of many of his costs contemporaries who believe that the court will not robustly enforce the new rules on costs management. A view, some may say, is well founded on the basis of the decision in Henry.

It has been noted that Henry was decided under the pre 1st April overriding objective on proportionality. Lord Dyson notes that with effect from 1st April, the overriding objective will include a new definition of proportionality and Rule 3.9 requires costs to be dealt with "efficiently and at proportionate cost”. Henry does not take away from the application of these new rules and nor does it impact on the system of costs as a whole – Henry is distinguished on the basis of the court’s view of the practice direction, the circumstances of the matter/parties and the application of pre 1st April definitions. A new wave of thinking and enforcement will abound from 1st April.

“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 acknowledgement that the achievement of justice means something different now".

With this remark it is clear that Lord Dyson is referring to the new overriding objective and proportionality - the aim of the court being one of efficiency and proportionate costs.

Why such a tough approach?

As a result of Jackson, legal aid has been reduced with the aim of saving a proposed £350 million by 2015. This means that the court’s resources will be heavily impacted upon. The effect of the cuts and the implication that these have on access to justice for individuals who rely on Legal Aid is palpable. The Court must approach compliance and litigation from a new point of view. With less people likely to receive legal aid (although it will still be available for those who 'really' need it) the court's resources will be stretched – less money means many more litigants in person, more time and court resources used in helping litigants to seek justice, all leading to what could potentially be an overwhelmed and less efficient system. Therefore a need to enforce compliance is necessary.

This new approach of efficiency and proportionality by the courts is hardly new of course. This was the aim of the original overriding objective when the CPR was unveiled in 1999. Lord Dyson states that society has become more litigious. A claims culture has created a court system which is subject to protracted and inefficient litigation which is only surpassed by the disproportionate costs incurred in doing so.

In terms of costs management and determining proposed costs at the beginning of proceedings - parties can keep an eye on the progress of their matters both in terms of progress generally and in terms of costs. There is a cost benefit aspect to this and whether or not one should potentially run a claim or not – again meaning spurious and other unmeritorious cases should not make it to issue. Costs are at the forefront of a litigant's mind instead of becoming an after thought as has become custom in some instances.

“That we have to do so stems from our commitment to proportionality, and the need to secure a fair distribution of court resources amongst all…in order to vindicate their rights".

An unfair trial?

This commitment to achieving proportionality in the context of the newly defined overriding objective means that should parties not comply with the rules pertaining to the proceedings or court orders, the court’s may in fact decide cases “on less evidence than they might have done in the past”. This includes but is not limited to instances where parties fail to submit evidence on time, or comply with orders pertaining to disclosure. Effectively if it is not in on time it is out!

“We have limited resources. Demand for those resources outstrips that limit. We have to cut our cloth accordingly”

The aim of Jackson is taking the legal system as a whole back to grass roots. If only the result of the CPR could have been foreseen 10 years ago - one has to wonder will we be back here in 2023.

For more information, contact Elizabeth Elliott.