SERVING WITNESS STATEMENTS LATE: THERE IS NO CLEARWAY BACK

In Clearway Drainage Systems Ltd -v- Miles Smith Ltd (08/11/2016) the Court of Appeal upheld a decision not to grant the claimant relief from sanctions when witness statements were served late. Here we look at the first instance decision in detail. (21st June 2016, Manchester District Registry, Mercantile Court).

(There are a surprising number of decisions in relation to late service of witness statements.  I was planning a review of them and this case has confirmed the need for this. Some of them are set out in the “Related Posts” section below.  The importance of drafting witness statements early cannot be emphasised enough).

KEY POINTS

  • The Court of Appeal upheld the decision of the judge at first instance refused the claimant’s application for relief from sanctions after witness statements were served two months late.
  • It would still have been possible for the trial to take place and the refusal to grant relief from sanctions effectively ended the claimant’s case. However the judge had applied the correct test and the Court of Appeal did not interfere.

THE CASE

The claimant was bringing an action for negligence against its insurance brokers.

  • Witness statements were to be served by the 8th April 2016.
  • On the 8th April 2016 the claimant’s solicitors wrote stating that, because of certain issues of disclosure and because the defendant had contacted one witness they were not serving witness statements in accordance with the court order.
  • The defendant replied stating that the day of disclosure was far to late to raise these issues.
  • On the 26th May, at a telephone PTR, an application was made to strike out the claim because of the failure to serve witness statements.
  • Witness statements were sent by the claimant on the 13th June. However these were password protected and could not be read by the defendant at the adjourned PTR on the 14th June. Further it became clear that the claimant needed relief from sanctions to rely on a witness summary.
  • The TPR was adjourned to the 21st June and, on the 16th June, the claimant made an application for relief from sanctions to rely on the witness summary.
  • The trial was fixed for three days starting on the 11th July 2016.
  • The judge refused the claimant’s application for relief from sanctions in relation to late service of witness statements and a witness summary.

THE COURT OF APPEAL

The Court of Appeal described the judgment at first instance as “impeccable” [the full transcript of the Court of Appeal decision is not yet available a summary is available on Lawtel and the case is discussed in Litigation Futures today]

THE DECISION AT FIRST INSTANCE

Given that the first instance decision was described as impeccable, it is worth examing that decision in some detail. The judgment was given by Her Honour Judge Moulder. She noted that the witness statements were served two months late and one month before the date of trial. She held:-

  • Although late service had not imperilled any hearing date the delay of two months, and service one month before trial,  affected the efficient progress of the litigation even if no particular prejudice was identified.
  • The reason given for the delay was inadequate. The claimant’s solicitor stated that he did not want to be “bulldozed” into service when full disclosure had not been made.  If the claimant believed this then it should have made an application before time to extend the deadline for service. It was not open to the claimant’s solicitors to ignore the court order.
  • In any event it was difficult to see why witness statements could not have been served and supplemental statements later produced to take account of subsequent disclosure.
  • The matter could be dealt with within the trial window (three weeks after the date of the hearing for relief). However all the parties would be placed under some time pressure.
  • The breaches had prevented the court from conducting the litigation efficiently and at proportionate costs. The PTR had been adjourned twice.
  • The application was made on the 9th June, two months after the date specified in the order and was not made promptly even after the 26th May when the claimant was aware that the defendant was seeking summary judgment because of non-service.
“Notwithstanding the fact that the claimant was then on the clearest possible notice from both the defendant and the court that an application for relief from sanction needed to be made, the claimant did not make an application until 9 June 2016. I note that this was itself less than three clear days before the adjourned hearing on 14 June and, therefore, in breach of the separate deadline under CPR23.7(1)(b). Although I accept the court has power under CPR 2.7 to hear an application notwithstanding the failure to meet that deadline it does again suggest a complete disregard for the rules.”
  • The claimant’s solicitor gave specific evidence about the pressures he was under. However this did not justify the lack of promptness.
“He states at paragraph 30 that he understood that the nature of the application had been well ventilated at the hearing on 26 May, and that it was in everybody’s contemplation that they would be made before the hearing on 14 June. In my view this suggests either an ignorance of the principles laid down in Denton and the requirement for a prompt application for relief or a failure to appreciate the urgency and significance of the matter.
51. In my view there is no justification for the continued failure to make an application for relief. Even if the Court were minded to accept these explanations at the hearing on 14 June, there is no explanation provided for the fact that the witness statement, which was served on 13 June, was password-protected and only served in a form which the defendant could access after the matter had been raised at the hearing on 14 June, and it had been made clear that this was unacceptable. Lack of promptness, therefore, is also a factor which in the circumstances of this case weighs against the grant of relief.”
  • The judge specifically considered whether it was just to exclude the claimant from giving evidence.

“I do have to weigh, and I have weighed very carefully, the fact that if relief in sanctions is refused the claimant’s case would effectively be at an end. This clearly weighs in favour of granting relief.

55. I have also considered the decision in McTear to which I was referred, but in my view the circumstances there were very different. At paragraph 41 of the judgment, As both the judge and Mr Davenport implicitly recognised, the 50- minute delay in serving the statements was trivial (in the old language) and neither serious nor significant (in the new language). The judge should then have gone on to consider the excuse for the delay that was offered. That the excuse was poor but not non-existent. Mr Eagle, the solicitor concerned, had lost his father and attended his funeral the day before that fixed for exchange. That was indeed an excuse for some delay, even if it was not really the reason for the 50-minute delay….[emphasis added] 5
6. Paragraph 42: It was appropriate then to consider the third stage, particularly including factors (a) and (b). But there was no evidence that the delay had been part of a deliberate plan to subvert the litigation process for these or other 15 litigants. And the other defaults were not in themselves as serious as the judge thought them to be. They did not disrupt the course of the litigation, and, had the judge properly analysed the new documents, he would have realised that an adjournment of the trial could not possibly have been required to allow the claimants a fair opportunity to deal with them. 57.
At paragraph 43: The judge seems to have ignored the most important factor at this stage in this particular case, which was the question of whether it was proportionate and just to exclude the defendants from giving their evidence as a result of their 50-minute delay in serving witness statements.
58. It is clear I think from the extracts that I have just read out that the factual position in that particular case was very different. The Court of Appeal in Denton has stated the judges should no longer adopt what they term the ‘traditional approach of giving pre-eminence to the need to decide the matter on the merits’. I have to balance that against the other factors which as the Court of Appeal in Denton made clear should be taken into account and look at all the circumstances. It does require a more nuanced approach, and the two factors stated in the rule must be given particular weight.
Conclusion
59. In conclusion, I accept that the trial date can be maintained and the defendant’s solicitors are in my view adequately resourced to deal with a truncated timetable. However, as I have indicated the test is broader than whether the trial date can be kept. I have referred above to the impact on the conduct of the litigation and it seems to me that time and money has been wasted by the claimant’s continuing and repeated failures in this regard.
60. As to promptness, the claimant was aware from 18 April that the defendant objected to the failure to exchange witness statements, but Mr Usden decided that he would take his own approach and pursue the issues of disclosure with Mr Smerdon. Not only did he not make a protective application, as his counsel termed it, but even when he was facing a possible 16 summary judgment application, following the PTR on 26 May he did not take action promptly. The delay and failure has nothing to do with the PTR being put off from 17 May to 26 May, as Mr Usden has suggested. Even after 26 May, Mr Usden did not see the need to prioritise his claim over his other work. He took his own view of what would be acceptable in terms of filing an application for relief. He ignored the rules about filing three clear days before a hearing application. He served the witness statements but decided to prevent the defendant from accessing them. He took no action in respect of the witness summary until prompted to do so by the Court at the second PTR hearing. Repeatedly, despite two adjournments of the PTR, it seems he has taken his own view of what is acceptable
. 61. I accept and I have considered carefully the fact that the claimant in this matter has itself done nothing wrong, that his representative, it seems, has chosen to ignore the rules and caused disruption and expense to the defendant and the court. The fact that Mr Usden genuinely appears to have been of the view that he was entitled to take the approach that he did in the face of the stance taken by the defendant on disclosure, witness statements and Mr Smerdon does not in my view support a conclusion that relief should be granted.
62. Accordingly, in the circumstances I conclude that for all these reasons the application for relief from sanctions in respect of the witness statements of Suzanne and Scott Briggs and Mr Buckley must be refused.
63. As far as the witness summary is concerned, the application for relief was made on 16 June. As I have already read out, the rules provide that unless the Court orders otherwise, a witness summary must be served within the period in which a witness statement would have had to be served. The deadline must, therefore, be 8 April.
64. The same considerations identified and discussed above in relation to the three stage test in Denton in my view apply to the witness summary. I have indicated that if the position in 17 relation to Mr Smerdon was uncertain at 8 April, it was clear by the beginning of June, but no application for relief from sanctions with regard to the witness summary was made until 16 June. This was in my view a serious failure. He is a key witness, and even if there was a good reason for the failure of 8 April, namely the uncertainty generated as a result of the letter sent by the defendant directly to Mr Smerdon, the position of Mr Smerdon was clear by the beginning of June.
65. There was no good reason for the failure on the part of the claimant to make an application at that point and prudence would have suggested a need to do so once the claimant’s solicitor was aware of the letter sent to Mr Smerdon.
66. As to the third stage of Denton, the issues are as set out above in relation to the competing factors. There was no promptness in the application, and I have addressed the matters raised by Mr Usden by way of the explanation. At this point we are less than three weeks to trial. For the same reasons, therefore, as set out above in relation to the third stage, in all the circumstances, the application for relief must fail.”

RELATED POSTS: LATE SERVICE OF WITNESS STATEMENTS

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