RESPONDENT TO APPLICATION TO AMEND PLEADINGS ORDERED TO PAY COSTS BECAUSE THEY SHOULD HAVE CONSENTED

I am grateful to Tobias Haynes from Regulatory Legal solicitors for sending me details of a judgment given today in relation to the costs of amendment. This is based on Tobias’ note of the judgment which was given today (30th September 2015).

Stephen Mark Brecons & others -v- Powerscourt Services Ltd & others.

A decision of HH Judge Purle QC in the High Court (Chancery Division) sitting in Birmingham, 30th September 2015.

“On 13 April 2015 His Honour Judge Purle QC struck out our clients’ Particulars of Claim; under the terms of an unless order, the Claimants were given the opportunity to substitute the Particulars of Claim by way of an application to amend (to be lodged by no later than 6 May 2015).

New particulars were drafted by leading counsel and an application  was made in time.

The Applicants invited the Respondent to consent to the introduction of the Particulars to save time and cost. The Respondent adopted a stance whereby they did not oppose the application but refused to consent to it. Further efforts were made by the Applicants to obtain consent to avoid the need for a hearing but to no avail.

The Judge today held that the Defendants’ stance had been unreasonable and that they should have co-operated and agreed to directions by way of consent. There was no need for the hearing to have gone ahead. The Claimants were thus entitled to the costs for the attendance of the hearing.”

MR HAYNES’ COMMENTS

Tobias provides a succinct commentary on the case which I cannot improve on.

“This is an interesting case as normally the costs in relation to amendment are borne by the applicants, but this case follows a recent line of cases which has punished un-cooperative behaviour and procedural/ opportunistic squabbles; for example the Gotch and Denton cases (these cases were not referred to however). It does however show a different line of thinking emerging in the Courts.”

THE LITIGATOR’S DILEMMA

This case shows one of the major problems in modern litigation. There is a judgment call as to when:

  • Consenting to something is failing to protect your own client’s interests
  • The risk that,failing to consent can lead to a party (not in default) being ordered to pay the costs of an application

BACK TO DENTON

It may help for everyone involved in litigation to, periodically read, paragraphs 40 – 43 of the Denton judgment.

“40. Litigation cannot be conducted efficiently and at proportionate cost without (a)
fostering a culture of compliance with rules, practice directions and court orders, and
(b) cooperation between the parties and their lawyers. This applies as much to
litigation undertaken by litigants in person as it does to others. This was part of the
foundation of the Jackson report. Nor should it be overlooked that CPR rule 1.3
provides that “the parties are required to help the court to further the overriding
objective”. Parties who opportunistically and unreasonably oppose applications for
relief from sanctions take up court time and act in breach of this obligation.
41. We think we should make it plain that it is wholly inappropriate for litigants or their
lawyers to take advantage of mistakes made by opposing parties in the hope that relief
from sanctions will be denied and that they will obtain a windfall strike out or other
litigation advantage. In a case where (a) the failure can be seen to be neither serious
nor significant, (b) where a good reason is demonstrated, or (c) where it is otherwise
obvious that relief from sanctions is appropriate, parties should agree that relief from
sanctions be granted without the need for further costs to be expended in satellite
litigation. The parties should in any event be ready to agree limited but reasonable
extensions of time up to 28 days as envisaged by the new rule 3.8(4).
42. It should be very much the exceptional case where a contested application for relief
from sanctions is necessary. This is for two reasons: first because compliance should
become the norm, rather than the exception as it was in the past, and secondly,
because the parties should work together to make sure that, in all but the most serious
cases, satellite litigation is avoided even where a breach has occurred.
43. The court will be more ready in the future to penalise opportunism. The duty of care
owed by a legal representative to his client takes account of the fact that litigants are
required to help the court to further the overriding objective. Representatives should
bear this important obligation to the court in mind when considering whether to
advise their clients to adopt an uncooperative attitude in unreasonably refusing to
agree extensions of time and in unreasonably opposing applications for relief from
sanctions. It is as unacceptable for a party to try to take advantage of a minor
inadvertent error, as it is for rules, orders and practice directions to be breached in the
first place. Heavy costs sanctions should, therefore, be imposed on parties who
behave unreasonably in refusing to agree extensions of time or unreasonably oppose
applications for relief from sanctions. An order to pay the costs of the application
under rule 3.9 may not always be sufficient. The court can, in an appropriate case,
also record in its order that the opposition to the relief application was unreasonable
conduct to be taken into account under CPR rule 44.11 when costs are dealt with at
the end of the case. If the offending party ultimately wins, the court may make a
substantial reduction in its costs recovery on grounds of conduct under rule 44.11. If
the offending party ultimately loses, then its conduct may be a good reason to order it
to pay indemnity costs. Such an order would free the winning party from the
operation of CPR rule 3.18 in relation to its costs budget.”

THE ATTEMPT TO END “PROCEDURAL GAME PLAYING”

This passage in Denton was, without doubt, a response to the procedural game playing that had arisen as a result of the Mitchell decision.  This is what Dyson MR  said about the Mitchell decision.

“It led some lawyers to adopt an unnecessarily adversarial approach to litigation, on the basis that if they took procedural points they might secure a tactical advantage for their clients. Parties were refusing to agree even short extensions of time for complying with time limits. Some even said that they were at risk of being sued for negligence by their clients if they behave obstructively and refuse to agree to anything”

This “febrile atmosphere” led to the “modification” of the approach in Denton.

By sticking to its guns, the court would have been consistent. But such a stance would not have served the interests of justice. We had been persuaded that the Mitchell decision was causing difficulty and leading to unreasonable decision-making which was neither sensible nor what could reasonably have been envisaged by the rule. This justified a slight modification of the earlier decision and an expansion of its reasoning to make explicit what had previously been insufficiently spelt out”.

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