The Year We Got Mitchelled
Dec. 1st, 2014 10:07 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
major_clangerThe rather dramatic denouement to the Mitchell libel trial - or rather trials, because Mitchell was suing News Group Newspapers, and was being sued by PC Rowland - brings to an end a saga that has not only involved stroppy MPs, leaky police and massive legal bills, but has also led indirectly to what any English civil litigation lawyer is going to remember as The Year We Got Mitchelled.
So why has a short exchange outside the gates to Downing Street had such an effect on English civil legal practice? Well, to understand that we have to go back about 15 years, to the Woolf Reforms and the introduction of the Civil Procedure Rules, aka the CPR.
Back in the 1990s, there was a perception that civil litigation in the courts of England and Wales was slow, old-fashioned and excessively costly. There were separate sets of procedural rules for the County Courts and the High Court and Court of Appeal, and cases tended to wind their way through the courts pretty much at the pace that litigants and lawyers nudged them along. A major review took place under the then Master of the Rolls, Lord Woolf, which led to a major set of reforms. In a nutshell:
'Case management' means that there is a set route of stages a case runs along from pre-action correspondence through to trial, with judges giving clear and firm directions as to what the parties are to do by when. The terminology update saw 'plaintiffs' replaced by 'claimants', 'writs' become 'claim forms', and we now have 'statements of case' instead of 'pleadings' - although the latter is a term that has stuck around. Under the CPR, many of the steps necessary to reach a trial will be set down to strict deadlines, e.g. for filing witness statements, disclosing your records relating to a claim, or paying pre-trial fees.
So what is to ensure that these deadlines are complied with, rather than slipping back into Bleak House levels of delay? Either by specific provision in the CPR or by order of a judge, such deadlines will often carry sanctions if not complied with. For instance, CPR rule 32.10 provides that if you do not file a witness statement by the date ordered, you may not use it at trial. Since, in civil cases in England, a witness statement is taken as a witness's primary evidence (oral evidence-in-chief is mostly limited to criminal trials) this is a pretty serious sanction. Equally, failure to give disclosure of documents on schedule is likely to lead to a so-called 'unless order', which sets a further deadline with the sanction of your claim or defence being struck out if you don't comply.
Clearly, such sanctions can have serious consequences so the CPR include a mechanism for seeking relief from them. This is embodied in rule 3.9, which until April 2013 read as follows:
(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 including—
(a) the interests of the administration of justice; whether the application for relief has been made promptly;
(b) whether the failure to comply was intentional; whether there is a good explanation for the failure;
(c) the extent to which the party in default has complied with other rules, practice directions, court orders and any relevant pre-action protocol;
(d) whether the failure to comply was caused by the party or his legal representative;
(e) whether the trial date or the likely trial date can still be met if relief is granted;
(f) the effect which the failure to comply had on each party; and
(g) the effect which the granting of relief would have on each party.
This was pretty much a checklist of available excuses and it was a sorry barrister who could not mine this for some sort of sob story to recount to the judge, complete with mitigating circumstances, so as to justify an "oh very well, but don't be late again" relief order. In fact, this was so much believed to be so that when Lord Justice Jackson was directed to do a further review of the CPR, with a particular emphasis on managing costs, one key question was whether the rules on seeking relief from sanctions needed to be toughened up a bit so as to encourage better compliance with case management orders.
Sure enough, rule 3.9 is now a good deal shorter:
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
(b) to enforce compliance with rules, practice directions and orders.
Goodbye fluffy checklist of excuses! Hello to harsh words like 'efficiently' and 'compliance'! But what this change really mean? Most civil litigators assumed that sooner or later there would be a harsh decision under the new rules and the Court of Appeal would clarify matters for us, probably by interpreting the new 3.9 to in effect have the old checklist but with a rather firmer approach.
We were right about what would happen, but not the result. And the test case? Step (or ride) forward Mr Andrew Mitchell.
To understand the next bit you have to appreciate that another change introduced by the 2013 Jackson Reforms was costs budget management. This is an idea that had been tried out for a while in the Technology and Construction Court but Jackson rolled it out to all Multi-Track civil cases (i.e. those about disputes worth more than £25,000). In a nutshell, after you have issued your claim and the other side has filed its defence, the court will arrange a short 'case management conference' at which the lawyers for both sides and a junior judge will attempt to set a roadmap for the rest of the case. The Jackson reforms added a requirement that you now have to fill out a complicated spreadsheet identifying your estimated costs at each stage, and file it no less than a week before the CMC. You then get to pick holes in the other side's budget at the CMC whilst defending yours from your opponent and, often, the judge, who has encouragement from above to keep costs under control. Once your budget is set there is a firm expectation that it limits or at least strongly constrains the amount of costs you get off the other side if you win.
Now, the rules on costs budgets have a very harsh built-in sanction. Rule 3.14 was introduced and it says:
Unless the court otherwise orders, any party which fails to file a budget despite being required to do so will be treated as having filed a budget comprising only the applicable court fees.
For a really big case, that might be the difference between having a budget approved that will allow you to recover hundreds of thousands or even millions of pounds if you win, for your lawyers' bills, and just getting a couple of thousand for the fixed fees you have to pay to bring your case at all.
So how does Mitchell come into this? Well, when he sued News Group, directions were given by the court that included listing the case for a CMC. Mitchell's solicitors ought to have filed a costs budget for him on time. In the event, they were six days late, filing a £500k budget the day before the CMC. As a later hearing noted:
They were a small firm; two of their trainee solicitors were on maternity leave; the senior associate who was used to dealing with costs budgeting had recently left the firm; and the firm was engaged on work on other heavy litigation ... the firm was "stretched very thin in terms of resources"
Nonetheless, the High Court Master dealing with the CMC held that this was a clear breach of rule 3.14 and she disallowed Mitchell's budget. This was a disastrous sanction: it meant that even if he won, he would not get his very large legal costs paid. Naturally, his lawyers appealed, and relatively quickly the matter came before the Court of Appeal. This was the case everyone had been waiting for.
The Court of Appeal said, in essence "quite bloody right".
We therefore dismiss the appeals against both orders. The Master did not misdirect herself in any material respect or reach a conclusion which was not open to her. We acknowledge that it was a robust decision. She was, however, right to focus on the essential elements of the post-Jackson regime. The defaults by the claimant's solicitors were not minor or trivial and there was no good excuse for them. They resulted in an abortive costs budgeting hearing and an adjournment which had serious consequences for other litigants. Although it seems harsh in the individual case of Mr Mitchell's claim, if we were to overturn the decision to refuse relief, it is inevitable that the attempt to achieve a change in culture would receive a major setback.
In the result, we hope that our decision will send out a clear message. If it does, we are confident that, in time, legal representatives will become more efficient and will routinely comply with rules, practice directions and orders. If this happens, then we would expect that satellite litigation of this kind, which is so expensive and damaging to the civil justice system, will become a thing of the past.
If you want to imagine the reaction of the English legal profession, or at least that bit that does civil litigation, to this, just think back to that scene in Game of Thrones where Joffrey says "Nope - off with his head!" It really was that seismic. And the consequences were stark and immediate. All over the place judges took Mitchell v News Group as clear binding authority that CPR sanctions were now, in effect, a tripwire, and a tripwire attached to a landmine at that. The verb "to be Mitchelled" gained currency, meaning to face a brutally harsh case management ruling, as claims were thrown out because a procedural step had been done a day late. For about six months, from November 2013, civil litigation seemed to revert to exactly the sort of model the Woolf reforms were meant to have taken us away from, as lawyers engaged in tactical skirmishing by looking for the slightest hint of non-compliance by opponents so as to file an application for strike-out, or for an unless order that would be fatal not to comply with.
It couldn't last, we thought. Luckily, we were right, In July, the Court of Appeal heard three further appeals from case management decisions and in Denton v White and ors took the opportunity to say "well, maybe we spoke a little harshly..."
The full judgment is here. In an nutshell, the CoA said that whilst it didn't get Mitchell wrong, that had been quite a serious case and perhaps guidance needed to be given in a rather more thoughtful manner as to when judges should and should not allow relief from sanctions. In particular, it emphasised the need to consider "all the circumstances of the case", with emphasis on 'all'. Although not stated, the ghost of the old 3.9 checklist could be discerned creeping back in, albeit in attenuated form.
So, late 2013 to mid-2014 is going to go down as the Year of Mitchell. The actual cause behind his case became lost in the background as far as civil litigators were concerned, many of whom probably had to think twice to remember who the evil bogeyman Mitchell actually was.
And Mitchell himself? Well, in a bitter irony, it now turns out that through having lost he wouldn't have got his costs at all even if his solicitors had filed on time...
So why has a short exchange outside the gates to Downing Street had such an effect on English civil legal practice? Well, to understand that we have to go back about 15 years, to the Woolf Reforms and the introduction of the Civil Procedure Rules, aka the CPR.
Back in the 1990s, there was a perception that civil litigation in the courts of England and Wales was slow, old-fashioned and excessively costly. There were separate sets of procedural rules for the County Courts and the High Court and Court of Appeal, and cases tended to wind their way through the courts pretty much at the pace that litigants and lawyers nudged them along. A major review took place under the then Master of the Rolls, Lord Woolf, which led to a major set of reforms. In a nutshell:
- A single set of Civil Procedure Rules was introduced
- Archaic terminology was updated
- Much more emphasis was placed on case management
'Case management' means that there is a set route of stages a case runs along from pre-action correspondence through to trial, with judges giving clear and firm directions as to what the parties are to do by when. The terminology update saw 'plaintiffs' replaced by 'claimants', 'writs' become 'claim forms', and we now have 'statements of case' instead of 'pleadings' - although the latter is a term that has stuck around. Under the CPR, many of the steps necessary to reach a trial will be set down to strict deadlines, e.g. for filing witness statements, disclosing your records relating to a claim, or paying pre-trial fees.
So what is to ensure that these deadlines are complied with, rather than slipping back into Bleak House levels of delay? Either by specific provision in the CPR or by order of a judge, such deadlines will often carry sanctions if not complied with. For instance, CPR rule 32.10 provides that if you do not file a witness statement by the date ordered, you may not use it at trial. Since, in civil cases in England, a witness statement is taken as a witness's primary evidence (oral evidence-in-chief is mostly limited to criminal trials) this is a pretty serious sanction. Equally, failure to give disclosure of documents on schedule is likely to lead to a so-called 'unless order', which sets a further deadline with the sanction of your claim or defence being struck out if you don't comply.
Clearly, such sanctions can have serious consequences so the CPR include a mechanism for seeking relief from them. This is embodied in rule 3.9, which until April 2013 read as follows:
(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 including—
(a) the interests of the administration of justice; whether the application for relief has been made promptly;
(b) whether the failure to comply was intentional; whether there is a good explanation for the failure;
(c) the extent to which the party in default has complied with other rules, practice directions, court orders and any relevant pre-action protocol;
(d) whether the failure to comply was caused by the party or his legal representative;
(e) whether the trial date or the likely trial date can still be met if relief is granted;
(f) the effect which the failure to comply had on each party; and
(g) the effect which the granting of relief would have on each party.
This was pretty much a checklist of available excuses and it was a sorry barrister who could not mine this for some sort of sob story to recount to the judge, complete with mitigating circumstances, so as to justify an "oh very well, but don't be late again" relief order. In fact, this was so much believed to be so that when Lord Justice Jackson was directed to do a further review of the CPR, with a particular emphasis on managing costs, one key question was whether the rules on seeking relief from sanctions needed to be toughened up a bit so as to encourage better compliance with case management orders.
Sure enough, rule 3.9 is now a good deal shorter:
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
(b) to enforce compliance with rules, practice directions and orders.
Goodbye fluffy checklist of excuses! Hello to harsh words like 'efficiently' and 'compliance'! But what this change really mean? Most civil litigators assumed that sooner or later there would be a harsh decision under the new rules and the Court of Appeal would clarify matters for us, probably by interpreting the new 3.9 to in effect have the old checklist but with a rather firmer approach.
We were right about what would happen, but not the result. And the test case? Step (or ride) forward Mr Andrew Mitchell.
To understand the next bit you have to appreciate that another change introduced by the 2013 Jackson Reforms was costs budget management. This is an idea that had been tried out for a while in the Technology and Construction Court but Jackson rolled it out to all Multi-Track civil cases (i.e. those about disputes worth more than £25,000). In a nutshell, after you have issued your claim and the other side has filed its defence, the court will arrange a short 'case management conference' at which the lawyers for both sides and a junior judge will attempt to set a roadmap for the rest of the case. The Jackson reforms added a requirement that you now have to fill out a complicated spreadsheet identifying your estimated costs at each stage, and file it no less than a week before the CMC. You then get to pick holes in the other side's budget at the CMC whilst defending yours from your opponent and, often, the judge, who has encouragement from above to keep costs under control. Once your budget is set there is a firm expectation that it limits or at least strongly constrains the amount of costs you get off the other side if you win.
Now, the rules on costs budgets have a very harsh built-in sanction. Rule 3.14 was introduced and it says:
Unless the court otherwise orders, any party which fails to file a budget despite being required to do so will be treated as having filed a budget comprising only the applicable court fees.
For a really big case, that might be the difference between having a budget approved that will allow you to recover hundreds of thousands or even millions of pounds if you win, for your lawyers' bills, and just getting a couple of thousand for the fixed fees you have to pay to bring your case at all.
So how does Mitchell come into this? Well, when he sued News Group, directions were given by the court that included listing the case for a CMC. Mitchell's solicitors ought to have filed a costs budget for him on time. In the event, they were six days late, filing a £500k budget the day before the CMC. As a later hearing noted:
They were a small firm; two of their trainee solicitors were on maternity leave; the senior associate who was used to dealing with costs budgeting had recently left the firm; and the firm was engaged on work on other heavy litigation ... the firm was "stretched very thin in terms of resources"
Nonetheless, the High Court Master dealing with the CMC held that this was a clear breach of rule 3.14 and she disallowed Mitchell's budget. This was a disastrous sanction: it meant that even if he won, he would not get his very large legal costs paid. Naturally, his lawyers appealed, and relatively quickly the matter came before the Court of Appeal. This was the case everyone had been waiting for.
The Court of Appeal said, in essence "quite bloody right".
We therefore dismiss the appeals against both orders. The Master did not misdirect herself in any material respect or reach a conclusion which was not open to her. We acknowledge that it was a robust decision. She was, however, right to focus on the essential elements of the post-Jackson regime. The defaults by the claimant's solicitors were not minor or trivial and there was no good excuse for them. They resulted in an abortive costs budgeting hearing and an adjournment which had serious consequences for other litigants. Although it seems harsh in the individual case of Mr Mitchell's claim, if we were to overturn the decision to refuse relief, it is inevitable that the attempt to achieve a change in culture would receive a major setback.
In the result, we hope that our decision will send out a clear message. If it does, we are confident that, in time, legal representatives will become more efficient and will routinely comply with rules, practice directions and orders. If this happens, then we would expect that satellite litigation of this kind, which is so expensive and damaging to the civil justice system, will become a thing of the past.
If you want to imagine the reaction of the English legal profession, or at least that bit that does civil litigation, to this, just think back to that scene in Game of Thrones where Joffrey says "Nope - off with his head!" It really was that seismic. And the consequences were stark and immediate. All over the place judges took Mitchell v News Group as clear binding authority that CPR sanctions were now, in effect, a tripwire, and a tripwire attached to a landmine at that. The verb "to be Mitchelled" gained currency, meaning to face a brutally harsh case management ruling, as claims were thrown out because a procedural step had been done a day late. For about six months, from November 2013, civil litigation seemed to revert to exactly the sort of model the Woolf reforms were meant to have taken us away from, as lawyers engaged in tactical skirmishing by looking for the slightest hint of non-compliance by opponents so as to file an application for strike-out, or for an unless order that would be fatal not to comply with.
It couldn't last, we thought. Luckily, we were right, In July, the Court of Appeal heard three further appeals from case management decisions and in Denton v White and ors took the opportunity to say "well, maybe we spoke a little harshly..."
The full judgment is here. In an nutshell, the CoA said that whilst it didn't get Mitchell wrong, that had been quite a serious case and perhaps guidance needed to be given in a rather more thoughtful manner as to when judges should and should not allow relief from sanctions. In particular, it emphasised the need to consider "all the circumstances of the case", with emphasis on 'all'. Although not stated, the ghost of the old 3.9 checklist could be discerned creeping back in, albeit in attenuated form.
So, late 2013 to mid-2014 is going to go down as the Year of Mitchell. The actual cause behind his case became lost in the background as far as civil litigators were concerned, many of whom probably had to think twice to remember who the evil bogeyman Mitchell actually was.
And Mitchell himself? Well, in a bitter irony, it now turns out that through having lost he wouldn't have got his costs at all even if his solicitors had filed on time...
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no subject
Date: 2014-12-02 07:43 am (UTC)no subject
Date: 2014-12-02 02:50 pm (UTC)no subject
Date: 2014-12-02 10:58 pm (UTC)no subject
Date: 2014-12-02 02:04 am (UTC)The British Legal System doesn't operate that way? Neither does the American, as far as I know. *sigh*
no subject
Date: 2014-12-02 08:49 am (UTC)- As a rule, the loser of a civil case pays the winning side's legal costs.
- Legal costs are assessed by a judge.
- Other than in personal injury cases, costs don't come out of damages, they are separately awarded.
- Damages themselves are assessed by a judge and are in almost all circumstances compensatory rather than punitive (and so far lower, in many cases, than in the USA).
This means that lawyers can be punished by judges by a refusal to award costs even in the lawyer is representing the winning side. That means that the client will have to pay the lawyer knowing that the money won't be refunded by the other side, which is not a situation a lawyer wants to put a client in. For really egregious cases, courts can make 'wasted costs orders' directly against a lawyer.
* Scotland has a separate and quite distinct (in history and nature) legal system from that of England and Wales. Northern Ireland also has a separate system, although it is rather closer to that of England and Wales than the Scottish one is. Referring to the 'British Legal System' within the hearing of a Scot is likely to get you a much longer and more forceful version of this explanation!
no subject
Date: 2014-12-04 07:10 am (UTC)no subject
Date: 2014-12-04 07:17 am (UTC)