Default: no longer an optional indulgence
Despite reforms and warnings galore, we continue to encounter opponents who think that compliance with court orders is an “optional indulgence”, as Justice Turner memorably barked in one case.
It is noteworthy that the courts in a series of recent decisions have edged back towards the firm line set in Mitchell v News Group Newspapers . The resurgence of the peremptory or unless order has been used to dramatic effect and our lawyers are regularly seeking these in the face of default.
The unless order is meant to give the guilty party one last chance to comply. It is important to remember as well, Lord Justice Dyson in Mitchell warned against the unfettered use of such orders. A sensible, balanced, but nevertheless tactic deployment of applications seeking such orders is necessary.
The starting point is to seek a simple order on the ever-optimistic assumption that a party will respect the authority of the court and do as they are told. Failure to obey with such simple orders inevitably generates delay and additional costs, neither of which are desirable. With that in mind, our philosophy is to press on and seek an unless order at the earliest reasonable moment following a default by a claimant. Such an application will specify what will happen if it is not honoured. The consequence sought is automatic, so a return trip to court is avoided.
For instance, we often need to require disclosure of important supporting documentation as to, for example, loss and damage. Some opponents are reluctant to hand over all relevant material when expected to do so by the courts, and by the court rules. Behaving in such a manner would justifiably provoke an application for an unless order with the sting being that if such key material is not supplied within the deadline set again by the court; then the entire claim will be struck out.
It is possible for a party so penalised to seek relief from the sanction under CPR 3.9, as clarified by the Court of Appeal in Denton v White . Indeed, Decadent Vapours – a wonderfully titled case which formed part of the Denton trilogy of challenges - was on this very point. The claimant was obliged to pay the trial fee by a specified date on pain of being struck out if he did not. He did not! The court granted relief on the ground that the fee was paid just one day late and the breach had not upset the court timetable. Nevertheless, costs would have to be paid by the claimant.
Last year in Oak Trading v British Gas , a defendant who was two days late in complying with an unless order that merely required a trial questionnaire be filed was refused forgiveness by Lord Justice Jackson because a month had elapsed before the defendant turned to the court for relief. Not only the type of default is therefore important, but the speed of seeking relief from even a minor default is crucial. The claimant accordingly grabbed a six-figure judgment. This case is also important because stern words were uttered about the seriousness of a peremptory order.
Our view is that the court felt undue leniency was seeping back into the judicial process. Indeed, we know from what Sir Rupert said when spoke at our London office this year, that there could be no going back to the ‘bad old days’ of regular default, excused by both parties’ laissez-faire attitude to court timetabling.
It is also important to note the remarkable Court of Appeal decision in Workman v Forester . This was a case with a history of persistent breach of court orders. It was open to the court to make, and so the court made, an unless order debarring the defendant from challenging the assessment of quantum (which in this matter was fixed at £1,503,579, together with interest and costs). This exceptional case runs contrary to an earlier decision in Lunnan v Singh , which acknowledged that a defendant found liable could still advance any argument as to quantum provided it did not contradict the finding on liability.
The final, and perhaps frightening, example is Eaglesham v Ministry of Defence , where in a complex action potentially worth millions, the claimant secured a judgment because the defendant failed to satisfy an unless order to disclose documents. The defendant had been given a last chance and had blown it. The game was up.
The astute litigator can, by always staying on top of their work, potentially see off the opposition and the unless order is now in the ascendancy.
This article was written with thanks to Professor Dominic Regan, Special Advisor to Lord Justice Jackson