16 December 2013Print This Post

Mitchell ruling “not an enhanced tactical weapon” for non-defaulting parties

High Court: Mitchell decision not confined to the examples cited

The new emphasis on courts considering a “wide range of interests” beyond just those of the parties before them when deciding applications for relief from sanctions is not “an enhanced tactical weapon” for non-defaulting parties, the High Court warned last week.

Robin Knowles QC, sitting as a deputy High Court judge, also suggested that parties were wrong to think that the examples given in the Court of Appeal’s Mitchell ruling defined the limits of the decision.

In SC DG Petrol SRL & Ors v Vitol Broking Ltd [2013] EWHC 3920 (Comm), the judge refused to grant relief from sanctions – an automatic strike-out – for the claimant’s failure to comply with an unless order for security for costs.

The claimant acknowledged that the breach was not trivial, meaning the burden was on the claimant to persuade the judge to grant relief. Mr Knowles comprehensively failed to be persuaded, and refused relief. He said it would have been the same result before Mitchell or even before rule 3.9 was amended.

However, he then offered two observations arising from the way the Mitchell case was used in the hearing (emphasising that he was not criticising either counsel or the solicitors).

He referred first to the Court of Appeal’s statement that the court should seek “to have regard to a wide range of interests”, and not just the case in hand, when considering granting relief.

“I respectfully offer the observation that there are limits to the contribution that a party, especially a non-defaulting party, can usefully make in evidence or argument in respect of circumstances extending beyond the case in hand – for example on what is needed ‘to enforce compliance with rules, practice directions and orders’.

“This is pre-eminently an area for the judge. In Mitchell, the Court of Appeal was not putting an enhanced tactical weapon into the hands of non-defaulting parties to the litigation. This is clear from the nature of the factors specified at (a) and (b) of CPR 3.9(1). It is reinforced by the concern of the Court of Appeal to reduce satellite litigation.”

Secondly he noted that when citing Mitchell, the parties referred him closely to the examples given by the Court of Appeal, with the defendants pressing the point that their case was not within one or more examples.

“I respectfully doubt that is the right approach. The examples are there simply to illustrate the principles described by the Court of Appeal. The court’s inquiry should be guided by the principles.

“My own view is that ideally the jurisdiction to extend time and grant relief from sanctions is one in which (as Lord Templeman urged in The Spiliada [1987] AC 456, HL in relation to service out of the jurisdiction) a judge would not be referred to other decisions on other facts.”

By Neil Rose

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