When Andrew Mitchell MP got into a little fracas in Downing Street whilst pushing his bicycle, he could not possibly have conceived of the consequences. He lost his job, police officers have been dragged before Parliamentary Select committees, arrests are taking place and libel actions abound. In a new twist, the incident is playing a significant part in the working out of the Jackson reforms to civil litigation.
As readers may know, Mitchell has brought a libel claim against News Group Newspapers Ltd in respect of an article that appeared in the Sun about the affair. The costs are horrendous. His solicitors filed a costs budget for £506,425. However, they failed to file it on time – at least 7 days before the case management and costs budget hearing – and so the Master ordered that he would only be able to recover the court fees. In a subsequent decision the Master refused to grant relief against sanctions. Mitchell’s appeal to the Court of Appeal has now been refused. Half a million in costs have just gone down the drain! Ouch!! See Mitchell v New Group Newspapers Ltd  EWCA Civ 1537 – 27 November 2013.
This was the first time that the Court of Appeal has considered the new version of CPR 3.9 on relief from sanctions together with the revised Overriding Objective. The question the Court of Appeal asked itself was: How strictly should the courts now enforce compliance with rules, practice directions and court orders? The Master of the Rolls noted that Sir Rupert Jackson had concluded that “a still tougher and less forgiving approach was required” and took a hard line.
Although “all the circumstances of the case” are to be taken into account on an application for relief from sanctions, specific significance is to be given to the two specific factors mentioned in CPR 3.9: the need (i) for litigation to be conducted efficiently and at proportionate costs and (ii) to enforce compliance with rules, practice directions and court orders. (Paragraphs 36 and 37 of the judgment). The focus is away from doing justice in the individual case (para 38). Some detailed guidance on the court’s approach to applications is at paras 40 and 41. Pressure of work is unlikely to be a good reason for allowing a relief from sanctions. “The new more robust approach that we have outlined above will mean that from now on relief from sanctions should be granted more sparingly than previously” (para 46). “Well-intentioned incompetence, for which there is no good reason, should not usually attract relief from a sanction unless the default is trivial.” (para 48).
The Master of the Rolls concluded as follows at para 60:
“In the result, we hope that our decision will send out a clear message. If it does, we are confident that, in time, legal representatives will become more efficient and will routinely comply with rules, practice directions and orders. If this happens, then we would expect that satellite litigation of this kind, which is so expensive and damaging to the civil justice system, will become a thing of the past.”
Perhaps a more likely scenario, paradox, is that no litigator in his right mind will litigate any more, for fear that some small mistake will have devastating consequences. This is probably a greater spur to mediation than any other conscious encouragement from Jackson or the judicial system generally.
Costs issues play a major part in mediations and it is vital that all sides bring to the mediation information about how much has been spent so far, and how much more will be spent if the case does not settle. Regular users of mediation will know how costs can be a stumbling block especially where a receiving party is seeking to recover a success fee and / or an insurance premium. Now that these are no longer recoverable in litigation started since the Jackson reforms came into force in April the dynamics are likely to change.
The Mitchell case adds another element that will need to be carefully considered when questions of costs are discussed at mediation. If proceedings have been begun, has there been full compliance with the rules relating not just to costs budgets but everything else in the litigation? There is also of course the new requirement of proportionality in relation to costs, which must be borne in mind. All these changes need to be considered in negotiation and may have a powerful effect in the discussions.
Finally, it is worth standing back and thinking about the whole Plebgate affair in conflict resolution terms. How could such a minor incident end up with so many extraordinary and disastrous human tragedies, that are continuing to unfold? Do we not live in a country where someone bumps into us and we say sorry?! Perhaps the exercise of a few basic conflict resolution skills, and a little less testosterone all round might have made all the difference? Perhaps they still might.