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Party “should waive privilege” to explain breach of court order

Lien: former solicitors retained file [1]

Lien: former solicitors retained file

A company that blamed its former solicitors as the reason for its continuing failure to comply with an order to serve witness statements has failed in its attempt to vacate an imminent trial date.

Mr Justice Green ruled that a party could not hide behind privilege as a reason for not providing a full explanation of its failure.

Devon & Cornwall Autistic Community Trust (t/a Spectrum) v Cornwall Council [2015] EWHC 129 (QB) [2]

concerns a £700,000 dispute over whether the defendant has properly paid the claimant for services to individuals in its care homes, and the judge said that if it could not adduce oral evidence, the claimant was “unlikely to be able to advance a realistic case at all”.

With the trial window commencing on 16 February, the claimant remained in continuing breach of a court order to serve witness statements by 25 November. On 3 December, its solicitors, south-west firm Kitsons, and leading counsel Philip Coppel QC terminated their retainers, with its new solicitors telling the court that Kitsons has retained most of the case papers and was maintaining a lien over them.

This meant the claimant was unprepared for trial and it applied to serve evidence out of time and vacate the trial date, which it was agreed engaged the principles in Mitchell and Denton.

Green J said the breach was “very serious” and had a direct and adverse impact upon the efficiency of the litigation.

He then described the reasons given for it as “opaque” and not good enough to explain away the failure. Though the claimant had experienced internal difficulties with senior personnel being investigated by the police – which was the reason the former lawyers ended their involvement, it claimed – the judge said there was no evidence “to explain how or why these events actually caused the failure”.

There was also no direct evidence as to why Kitsons and Mr Coppel terminated their retainers and the reasons “cried out for proper and detailed explanation”. Green J said he would have expected a detailed witness statement from senior employees of the claimant and a waiver of privilege to permit the legal advisers to explain themselves.

“I do not accept that a claimant can hide behind privilege as a reason for not providing an explanation to the court which justifies such an assertion which is advanced by way of exculpatory justification,” he said.

He added that in Mitchell, the Court of Appeal made clear that the burden of proof lay on the applicant and that an explanation based on the failure of legal representatives may well not be sufficient.

Moving on to assess all of the circumstances, Green J did not accept the submission that vacating the trial was a “moderate step” and involved a “reasonable” delay of only four months. Though the two factors set out in CPR 3.9 are not paramount, they carry “particular import”, he said.

“It is true that in many, if not most, cases a failure to observe a rule can be remedied by an extension of time permitting the defaulter to ‘have another go’ or ‘get its act together’. However, the court’s timetable is congested and all adjournments have consequences,” he ruled.

“A climate in which it could be said that a serious, ill-explained, breach should be overcome through an extension of time in which to comply or an adjournment as a matter of routine runs counter to the very change of ethos that the Court of Appeal in Mitchell and Denton was so anxious to bring about.”

Further, on the evidence provided, “I can have absolutely no confidence that adjourning this case will have the desired effect. In any event, if I vacate the trial there is also no guarantee that it can be listed for June (the claimant’s suggestion). More likely it would be adjourned for a much longer period”.

Though he decided not to vacate the trial, Green J said he was conscious that “an underlying theme behind the clarification of the Court of Appeal in Denton was the need to enable justice to occur and that this involves an assessment of proportionality”.

As a result, the vital nature of the witness evidence meant the “proper and proportionate balance” to be struck was to permit witness statements to be served within a tight timetable backed by an unless order prohibiting the claimant from relying upon witness evidence at trial in default of due service.