Relief from Sanctions

The Court of Appeal has overturned a Judgment criticised for imposing draconian sanctions on a law firm for missing four cost deadlines.  The decision by Lord Justice Richards in the case of Michael Wilson & Partners Ltd v Sinclair & others [2015] EWCA Civ 774 (23 July 2015) has confirmed the position in Denton, and effectively ‘reversed’ the earlier decision of Mitchell.  

In Denton v TH White Ltd & another [2014] EWCA Civ 906 the Court set new guidance for assessing whether relief from sanction should be granted for non-compliance with Court orders. Emphasis was placed on requiring the Court to consider “all the circumstances of the case” and a new 3 stage test was introduced for applications for relief.  The stages of the test are:

  • Stage 1: Identify and assess the seriousness of the non-compliance.  Is the breach “serious or significant?
  • Stage 2: If it is, why did the default occur?
  • Stage 3: Consider all of the circumstances of the case in order to deal with the application “justly” including (a) the need for litigation to be conducted efficiently and at proportionate cost, and (b) the need to enforce compliance with rules, directions and Court orders.

This test was materially different to the earlier decision in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537 which gave only limited circumstances in which relief would be granted. 

Lord Justice Richards was satisfied in Michael Wilson & Partners that the circumstances were exceptional, such to justify him exercising his discretion to revoke the earlier orders, thus affirming the 3 stage test in Denton.  Richards LJ commented “This is a key point, since consideration of all of the circumstances of the case casts a very different light on the matter.

The affirmation that this case has given to the 3 stage test will certainly bring some comfort to practitioners knowing that the draconian Mitchell guidelines are slowly fading and making room for a more practical approach to relief from sanctions.