DWF IP team advises on landmark Court of Appeal Decision

Leading Intellectual Property litigators from DWF have acted for one of the successful appellants in the Court of Appeal (Lord Dyson MR, Lord Justice Jackson and Lord Justice Vos) who have given a landmark judgment reformulating the guidance on relief from sanctions under CPR r.3.9 following the landmark decision in Andrew Mitchell MP v News Group Newspapers [2013] EWCA Civ 1537. The Court says that “Mitchell has been misunderstood and is being misapplied by some courts” which is “leading to decisions which are manifestly unjust and disproportionate”. Dealing with appeals in three cases, and after receiving submissions from the Law Society and Bar Council, the Court has given new guidance setting out a “more nuanced approach” to applications for relief from sanctions.

The new approach can be summarised as follows:

  1. Identify the default and assess its “seriousness or significance”: relief will usually be granted for breaches which are neither serious nor significant (the word “trivial” used in Mitchell has been dropped);
  2. Consider why the default occurred (i.e. whether there is a good reason for it);
  3. Consider “all the circumstances of the case, so as to enable [the court] to deal justly with the application”. It is not the case that an application for relief from sanctions for a non-trivial breach for which there was no good reason will automatically fail. The particular factors mentioned in the rule (the need for litigation to be conducted efficiently and at proportionate cost and to enforce compliance with rules, practice directions and court orders) “may not be of paramount importance [but] are of particular importance and should be given particular weight” (interestingly, Jackson LJ dissents on this point, saying that those factors have to be considered but not necessarily given greater weight than others). The promptness of the application, and other past or current breaches, will also be relevant at this stage.

The Court also emphasises the need for cooperation by the party not in breach: “it is wholly inappropriate for litigants or their lawyers to take advantage of mistakes made by opposing parties in the hope that relief from sanctions will be denied and they will obtain a windfall strike-out or other litigation advantage… The court will be more ready in the future to penalise opportunism… Heavy costs sanctions should, therefore, be imposed on parties who behave unreasonably in refusing to agree extensions of time or unreasonably oppose applications for relief from sanctions. An order to pay the costs of the application under rule 3.9 may not always be sufficient.”

The Court accordingly allowed all three of the appeals before it, reversing an “unduly relaxed” grant of relief in Denton v T H White Ltd (late witness statements causing adjournment of trial), and reversing the “unduly draconian” refusals of relief in Decadent Vapours Ltd v Bevan (claim struck out for late payment of hearing fee in breach of an “unless” order) and Utilise TDS Ltd v Davies (costs budget filed 45 minutes late, combined with delay in complying with another court order).

DWF acted for Decadent Vapours Limited after the company had dis-instructed their previous advisors.