The latest High Court decision refusing relief from sanctions shows how tough the courts are becoming in implementing the Jackson reforms, a QC has warned.
John de Waal QC of Hardwicke Chambers said the decision in Michael v Middleton  EWHC 2881 (Ch) – where he acted for the defendant – also gives a foretaste of the type of negligence claims that are going to catch up with solicitors who have not been on top of their caseload.
The claimants owned a string of fish and chip shops. The defendant was their solicitor. In about 2000 the parties agreed that the defendant should be paid for his work by being given an interest in the business his clients operated. What that agreement was remains to be decided but it was the claimants’ case that declarations of trust made in the defendant’s favour about the beneficial ownership of various properties should be set aside.
A claim was issued on behalf of the Michaels. But their then solicitors failed to provide satisfactory disclosure and, in 2012, and unless order was made and the case struck out. In January 2013 the Michaels instructed new solicitors, who Mr de Waal said “inexplicably” waited until July 2013 to issue an application for relief from sanctions under rule 3.9.
Even then, at the time the hearing came on they were still not ready to provide disclosure.
It was common ground that the claim was not time-barred and that the claimants had been badly let down by their first solicitors.
The claimants’ submission that the pre-1 April rule 3.9 should be applied was rejected – the relevant date was the date of issue, said HHJ David Cooke, sitting as a High Court judge. But he said the matters listed in the old 3.9 were still potentially relevant.
Refusing the application for relief, the judge focused on the two specific objectives in the rule – conducting litigation efficiently and saving costs, and enforcing compliance with orders. “It would send a wrong message” to grant relief, he said.
He said: “Standing back it seems to me that the justification for imposing this sanction, which has not been appealed against, is that the original trial date could not be met by reason of the default in the conduct of the action by the claimants’ solicitors.
“It is right, it seems to me, to consider also that the effect of granting relief from sanctions now that the original trial date has gone past would be not only significantly to extend time but also, it seems to me, to give the wrong impression that a failure to comply with a timetable leading to a sanction imposed because the case cannot be dealt with within the timetable set by the court may be overcome once that timetable is out of the way simply by setting a new timetable and effectively granting a very great extension of time for the matter to be put back on track.
“A court, in my view, should be slow to accept that the effects of timetabling and the discipline imposed on the parties that are sought to be achieved can be effectively sidestepped in that way.”
This could mean that actions with reasonable prospects of success could then not be brought, with parties left with taking action against their legal advisers. But HHJ Cooke noted that while this was open to the claimants, here the litigation could also be restarted without concerns about limitation or abuse of process.
Mr de Waal commented: “The tough approach is perhaps no surprise – ‘on message’ with Jackson, so to speak. The interesting consequence is the solicitor’s negligence claims that will follow: A [the first law firm acting in the case] is definitely liable, but so perhaps is B [the second] for delaying post 1 April. If sued, A’s insurers are bound to pursue B for a contribution claim.
“Meanwhile the Michaels will have to find a third firm of solicitors – in order, it must not be forgotten, to bring their original claim against their original solicitor.”