Taking a close look at the decision in Atrium Training Services  EWHC regarding extensions of time and its practical significance for litigators
One of my main reasons for starting this blog was to keep a close eye on developments in civil procedure after the implementation of the Jackson reforms. Although the reforms were primarily in relation to costs new rules as to the way that the courts deal with relief from sanctions were also introduced. In particular a new rule was introduced to the Overriding Objective with 1.1(2)(f) placing emphasis on “enforcing compliance with rules, practice directions and orders”. CPR 3.9 has been altered to take away the lists of factors the court has to consider and replacing it with:
(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
Precisely how this is going to be construed remains to be seen. However there is little doubt that the courts intend to take a much more rigorous line. In Fred Perry –v- Brands Plaza Trading, Lewison LJ (giving the judgment of the Court) cited with approval paragraph 8.5 of the Jackson Report, which said:
“… courts at all levels have become too tolerant of delays and
non-compliance with orders. In so doing they have lost sight of
the damage which the culture of delay and non-compliance is
inflicting on the civil justice system. The balance therefore
needs to be redressed.”
The decision in Atriam Training Services
In Atriam Training Services  EWHC 1562 (Ch) Mr Justice Henderson considered an application for an extension of time by liquidators to give disclosure in a complex insolvency case. Disclosure was due to take place on the 2nd April 2013, however on the 28th March 2013 the solicitors for the liquidators made an application for an extension of time until the 28th June 2013. A cross-application was made for an order that the action be struck out, or that any extension should be made on an “unless” basis. The judge considered a number of matters.
A prospective application is different to a retrospective application
In Robert –v- Momentum Services Limited  EWCA Civ 299 the Court of Appeal held that where an application for an extension of time is made before the expiry of the stipulated period this was not a case as one of relief from sanctions. The court’s discretion should be exercised by having regard to the overriding objective. The court considers only the prejudice caused by the failure to take the relevant step and does not, normally, consider pre-existing delay or prejudice – except in exceptional circumstances.
Robert still applies
The judge held that the fact that this was a prospective application meant it would be wrong to treat it as an application for relief from sanctions. The court would apply the principle in Robert
“… by simply having regard to the overriding objective of enabling the court to deal with cases justly including, so far as practicable, the matters set out in rule 1.1(2)”.
The relevance of the change in the overriding objective
The overriding objective now includes the enforcement of compliance with orders. To this end the court had to balance two issues:
“52. The matters set out in rule 1.1(2) now include, of course, the enforcement of compliance with orders. To that extent, it is no doubt the case that the court will scrutinise an application for an extension more rigorously than it might have done before 1 April, and that it must firmly discourage any easy assumption that an extension of time will be granted if it would not involve any obvious prejudice to the other side.”
The balancing act: parties should not behave unreasonably
However the court had to provide a balance:
53. On the other hand, I think it is important not to go to the other extreme, and not to encourage unreasonable opposition to extensions which are applied for in time and which involve no significant fresh prejudice to the other parties. In cases of that nature, considerations of cost and proportionality are highly relevant, and the wider interests of justice are likely to be better served by a sensible agreement, or a short unopposed hearing, than by the adoption of entrenched positions and the expenditure of much money and court time in preparing for and dealing with an application that could have been avoided.
54. I would also observe that, although all court orders mean what they say, and must be complied with even if made by consent, there are some orders relating to the completion of specified stages in preparation for trial (such as disclosure, the exchange of witness statements or a timetable for expert evidence) where there may still be so many imponderables when the order is made that the date for compliance cannot sensibly be regarded as written in stone. Everything will always depend on the circumstances of the particular case, and the stage in the proceedings when the order is made, but in many such cases it should be understood that there may be a need for reasonable extensions of time or other adjustments as the matter develops. It would, I think, be unfortunate if the new and salutary emphasis on compliance with orders were to lead to a situation where, in cases of the general type I have described, a reasonable request for an extension were to be rejected in the hope that the court might be persuaded to refuse any extension at all.”
The judge made an order extending time but made an “unless” order in relation to disclosure on the extended timetable.
The practical significance of this
It is clear that litigator’s are going to have to be much more wary of time limits in the future.
1. If in doubt an application should be made prospectively.
2. A prospective application is not bound to succeed and may be considered with some rigour. The party making the application will have to justify it. The absence of prejudice is not decisive.
3. A prospective application is, however, different to an application for relief from sanctions under 3.9.
4. Parties should be wary of attempting to take advantages of procedural delays. Reasonable extensions of time may still need to be agreed, a “sensible approach” is necessary.
The jurisprudence as to 3.9 will, no doubt, develop. In the interim litigators are best
advised to avoid reliance of this rule if they can. If an extension of time is not agreed
then the safest step is to make a prospective application.