Court of Appeal clarifies when a party in breach of a court rule or order must apply for relief from sanctions

The Court of Appeal has found that a claimant did not need relief from sanctions under CPR 3.9 where it made a late application for permission to rely on additional expert evidence. This contrasts with the position for witnesses of fact, where the rules contain an express sanction for failing to serve a witness statement on time, and therefore relief from sanctions is required if a party wants to call a witness whose statement was served late: Yess (A) Electrical Ltd v Warren [2024] EWCA Civ 14.

In a number of cases, the courts have held that sanctions should be implied for breach of certain court rules and orders where there is no express sanction, so that parties in breach must apply for relief from sanctions under CPR 3.9 and the three-stage test set out in Denton (outlined here) applies. It has, however, been far from clear how far this principle extends, and when the court will (or will not) imply a sanction where a rule or court order is silent. The Court of Appeal's judgment in this case is therefore welcome in suggesting that the courts will be hesitant to expand the principle beyond the two examples identified in the case law to date, namely the failure to file a notice of appeal or a respondent's notice on time.

Nonetheless, the decision makes it clear that, even where there is no need for relief from sanctions, the court will still exercise its case management powers to further the overriding objective of dealing with cases justly and at proportionate cost. This includes an emphasis on compliance and the need to conduct litigation efficiently, which means the courts have become less tolerant of delays than previously. Parties should therefore be mindful of the risks of seeking late permission to take a step in the proceedings regardless of whether the application is one to which the relief from sanctions regime applies.

Background

The claimant started proceedings for personal injury against his employer, the defendant, in October 2019.

A Case Management Conference (CMC) took place in October 2020. The claimant had already obtained four reports from an orthopaedic surgeon. The district judge gave the claimant permission to rely on those four reports, and the defendant permission to rely on a report of their own orthopaedic surgeon. The claimant's expert's fourth report said he thought the opinion of a pain management expert should be sought, but no point was made about this at the CMC so no permission was sought or given for a pain management expert.

On 22 February 2022 the claimant applied for permission under CPR 35.4(1) to rely on a report from a pain management expert. A few days later, the trial was listed for September 2022, but the claimant applied to vacate the trial due to the unavailability of its witnesses. (Dates on which the witnesses were unavailable had been notified to the court but had been overlooked due to an administrative error.)

The district judge granted both applications. He held that the requirement to obtain relief from sanctions under CPR 3.9 did not apply to the late application to call a new expert and so the matter was to be decided in accordance with the overriding objective. The judge noted the claimant's acceptance that the application was late but said it was not "very late" because, as a result of the trial date having just been vacated, the application would not cause a trial date to be lost. He also gave permission to appeal on the relief from sanctions ground.

The defendant's appeal to the circuit judge was dismissed, but the defendant was given permission for a second appeal.

Decision

The Court of Appeal dismissed the appeal, finding that the application was not one to which CPR 3.9 applied. Birss LJ gave the leading judgment with which Males and Asplin LJJ agreed.

In what circumstances is CPR 3.9 engaged?

Birss LJ started by considering the relevant rules on relief from sanctions, namely:

• CPR 3.8(1) "Where a party has failed to comply with a rule, practice direction or court order, any sanction for failure to comply imposed by the rule, practice direction or court order has effect unless the party in default applies for and obtains relief from the sanction."
• CPR 3.9(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 -

1. 1. for litigation to be conducted efficiently and at proportionate cost; and
   2. to enforce compliance with rules, practice directions and orders."

The critical starting point is the existence of a breach of a rule, practice direction or order: if there has been no such breach then the relief from sanctions provisions under CPR 3.9 do not apply.

Birss LJ commented that, in some contexts, the concept of “relief from sanctions” has been used simply as a label for the tougher approach to case management and compliance following the Mitchell and Denton cases, but that is not the correct approach. The courts do apply an approach to case management which is less tolerant of delays and has a greater emphasis on compliance and the need for efficient conduct of litigation at proportionate cost. However, the basis for that approach is not CPR 3.9 but the two principles embedded in the overriding objective at CPR 1.1(2)(e) and (f), which state that dealing with a case justly and at proportionate cost includes:

(e) allotting to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases; and

(f) enforcing compliance with rules, practice directions and orders.

Where a breach has been identified, the next question is whether there is a sanction for that breach. CPR 3.8 and 3.9 do not create sanctions but rather apply when a sanction already exists. Birss LJ identified three scenarios where sanctions exist:

• express sanctions that are provided for in the rules or the relevant order (eg a failure to file a witness statement on time);
• implied sanctions where the court's permission is required to proceed, such as where a party has failed to file a notice of appeal on time; and
• cases where a further step has been taken in consequence of the breach, such as the entry of a default judgment.

Birss LJ referred to Mark v Universal Coating & Services [2019] 1 WLR 2376 (QB), in which Martin Spencer J sought to identify the circumstances in which a breach with no express sanction might attract an implied sanction. His conclusion was that the answer depended on the significance of the circumstances the applicant found themselves in for the purposes of the litigation. Birss LJ said he sympathised with the attempt to explain the cases in which implied sanctions had been identified, but could not agree with that approach as it was too uncertain.

He added, however, that bearing in mind the importance of clarity in the procedural framework, the hurdle for identifying something as an implied sanction must be a high one. The caselaw had identified only two examples, namely, failure to provide a notice of appeal and failure to serve a respondent's notice, and the scope for adding further implied sanctions to that list "must be very narrow". Since the overriding objective applies even when CPR 3.9 is not engaged, the need for the court to extend this concept further was likely to be very limited.

Birss LJ commented that, just because a rule, PD or order provides that a party needs permission to take a step, does not mean that that need for permission has been imposed as a sanction for breach of something. While there were cases in which a permission requirement had been imposed as a sanction – such as CPR 32.10 which provides that where a witness statement is served late the court's permission is needed to call the witness to give oral evidence at trial - there are other cases where the need for permission is not intended as a sanction, for example, the general requirement for permission to amend statements of case.

Was CPR 3.9 engaged in this case?

Birss LJ found that there had been two breaches by the claimant, namely: (1) a breach of the requirement in the allocation order to attend the CMC with the dates of availability of all witnesses including experts; and (2) a breach of the requirement in the CMC order that applications for oral expert evidence be made in the pre-trial checklists.

He held, however, that CPR 35.4 was not a sanction for the breaches identified. The fact the claimant needed permission under CPR 35.4 to call a pain management expert was not a consequence imposed for a breach of a rule, PD or order: the requirement for permission was imposed to control expert evidence. The claimant would have needed permission even if it had complied with the allocation order and brought the pain management expert's dates to that hearing. Therefore, the application was not an application for relief from sanctions under CPR 3.9

Was the judge's decision wrong applying the overriding objective?

Finally the court considered the alternative ground of appeal, namely whether the judge should have refused the application to allow the expert evidence taking into account the modern emphasis on compliance and the need for efficient conduct of the litigation at proportionate cost.

Birss LJ conceded that the case was "very near the line" given that the claimant should have raised the need for a pain management expert at the original CMC and the delay in so doing was very serious. However, he held that the judge's decision to allow the late evidence was within his wide case management discretion. The critical factor, which the judge had well in mind, was that at that time there was no trial listed so allowing the application would not vacate the trial or disrupt any extant lists. Given those circumstances, Birss LJ dismissed this second ground of appeal.