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The judiciary having successfully put the frighteners on solicitors following the Andrew Mitchell case Mitchell v News Group Newspapers  EWCA Civ 1537, the details of which I am sure do not need rehearsing, and having indirectly been on the sticky end of a separate matter involving a substantial success fee (or lack of it as it turned out to be) following the ruling in the Long -v- Value Properties Ltd & Anor at the Supreme Court Costs Office in January this year, I was somewhat heartened to hear of the case of Stephen Warner -v- John Merrett handed down on 12 June in the Mercantile Court of the Queens Bench Division.
The circumstances were pretty identical to those of Long in that documentation in respect of additional liabilities was not served with the notice of commencement as required by CPR 47.6 (1) PD 32.5 (1 & 2) but was immediately disclosed to the Defendant when this omission was realised following receipt of the points of dispute. The defendant argued that in accordance with CPR 44.3 (B) the Claimant’s solicitor and counsel should be denied their success fees and that the after the event insurance premium should be disallowed.
As you may recall in Long, in his review of the evidence before him, Master Rowley of the Senior Courts Costs Office said that, ‘this one strike and you’re out issue troubled me throughout this hearing’ and went on, ‘the Court of Appeal …….in Mitchell…….expressly refer to Sir Rupert Jackson’s conclusion in his report that the “extreme” approach of non-compliance always suffering a sanction save in exceptional circumstances was not one to be followed’.
In a further paragraph the Costs Judge compared the position where a notice of funding is not served for some time but the receiving party is still able to claim a success fee from the period after service until conclusion. He continued, ‘There is a least an escape route of sorts for a party who overlooks serving the relevant notice immediately and then rectifies the error. The sanction for a failure to provide information at the commencement of detailed assessment proceedings however has no similar provision for late notice and as such it is all or nothing.’ The rather telling point in my view is the following observation by the Master in going on, ‘That seems strange to me given that the complete absence of knowledge to the opponent caused by a failure to serve the N251 [notice of funding] always seems to cause more prejudice than a failure to serve information regarding a CFA whose existence was already known.’
Despite his concerns and having ‘qualms about the nature of the sanctions imposed for a breach of this particular provision of CPR [above]’ Master Rowley seemingly felt obliged to follow Mitchell in that the breach in his view was not trivial and that there was no good reason for granting relief.
In stark contrast we now have the case of Warner -v- Merrett which, in view of the seemingly softening and more sensible approach taken recently by those who have the unenviable task of ruling in these types of cases, appears to offer some welcome “relief” for those (mainly claimant solicitors) who have fallen foul of wig and gavel since Mitchell.
In his ruling His Honour Judge Mackie QC said that ‘whilst the decision in Mitchell provided guidance on how to apply CPR 3.9 [relief from sanctions], that judgment should not be applied like a rule or statute’, as seemed to be the case in Long. ‘It was necessary to look at the context and the effect of the breach. The question of triviality had to be seen in the context of the duty to cooperate imposed on lawyers involved in Mercantile Court cases.’ It should be noted that in both Long and Merrett the claimant solicitors had no history of either breaching a court order or default and both had acted immediately when each became aware of their respective omissions following commencement of detailed assessment proceedings.
His Honour went on, ‘The breach was of a general kind and not a total failure. The consequences of the breach caused inconvenience to the [paying party], not the court. In the context, the breach was trivial or insignificant. Even if that were wrong, it was just to grant relief in all the circumstances.’
So, whether claimant solicitors can begin to raise their heads above the parapets remains to be seen, but what appears to be emerging is that a much more pragmatic and sensible approach is being demonstrated by the judiciary on the whole question of relief from sanctions. Theoretical arguments should not take precedent over common sense. For those of you who remember the late Master of the Rolls Lord Denning, some of his landmark judgments were made applying common sense, not just the law.