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RELIEF FROM SANCTIONS – MITCHELL & DENTON IN AN EMPLOYMENT TRIBUNAL CONTEXT

Andrew Clarke QC

Introduction 
  1. I will look briefly at two points:
1.1 The re-consideration of the Mitchell approach in Dentonshows a change in the judicial approach and may well be seen as helpful to EJs considering similar problems. Indeed, consistent with earlier CA authority, it may be that EJs will be expected to follow the same three stage approach as found in Denton. 

1.2. The underlying reasoning of the CA in Denton may provide guidance on the approach to be taken towards a wider range of case management issues. 

The new CPR 3.9 and Mitchell

  1. The debate as to the correct approach to applications for relief from sanctions in the High Court takes place against the background of the revising of CPR 3.9 as part of the Jackson reforms. The Rule sets out the general approach to be taken in all such applications. That is applications for relief from a sanction imposed for a failure to comply with a rule, practice direction, or court order. The classic case was a strike out following the failure to comply with an unless order.
  2. The old High Court Rule required the court to consider all the circumstances, including nine particular matters. The revised rule abandoned mention of the nine matters, but not the need to consider all the circumstances. It makes particular mention of two factors, the efficient conduct of the litigation at proportionate cost and the need to have rules etc complied with.
  3. Mitchellappeared, to many practitioners, to have adopted a rather draconian approach to that new CPR 3.9. It was one which bordered on zero tolerance. Only in the case of trivial breaches could an applicant expect to obtain relief. Where the breach was more than trivial, only a good explanation (usually involving matters outside the control of the party in question) would be likely to secure relief. The CA now tells us (in Denton) that Mitchell has been misunderstood and misapplied. 

The (old and new) ET Rules and the CA’s views in Neary

  1. The ET Rules did not and do not follow CPR 3.9. The test in Rule 38(2) for setting aside a strike out following an unless order is whether "it is in the interests of justice” to set it aside. That test had been considered, under the old ET Rules, in Governing Body of St Alban’s Girls’ School v. Neary [2010] IRLR 124. The case involved a review after a strike out consequent upon a failure to provide particulars. The test was whether it was in the interests of justice to set aside the order. The EJ held that it was not. The EAT held that as he had failed to take into account the nine factors to be considered under (old) CPR 3.9 the EJ’s reasoning displayed an error of law.
  2. The CA held that it was the EAT’s approach which was in error. The ET Rules referred to the overriding objective, but did not incorporate CPR 3.9. The CA held that it was appropriate to require the ET to adopt the same general approach to such matters as the High Court, but not to require compliance with the specific terms of the CPR. The CA pointed out that all cases are fact sensitive and at the heart of any decision on such a matter would be the proportionality of the draconian sanction of strike out on the facts of the case. One touchstone that the CA has referred to in other cases is the impact of the default upon the prospect of having a fair trial (on the dates originally listed).
  3. The new ET Rules similarly do not cross refer to CPR 3.9. Furthermore, the overriding objective as defined in Rule 2 does not refer to either of the two matters highlighted for particular consideration in the new CPR3.9. Of course, the list of factors (in Rule 2) to be kept in mind when considering the overriding objective is expressly non-exhaustive. 

Life after Denton – a three stage approach

  1. What does the CA now say is the correct approach? The majority in Denton set out a three pronged test[1]: 

8.1. What is the seriousness and significance of the failure?

8.2. Why did the default occur?

8.3. Look at all the circumstances of the case, giving particular weight to the two factors highlighted in CPR3.9. 

  1. Although the approach has been divided into three, the first two ‘stages’ can be seen as specific aspects of the third, more general, stage. Following the approach of the CA in Neary it seems likely that the higher courts will expect an EJ to follow a broadly similar approach. They will certainly not criticise one who does so when exploring where the interests of justice lie: 

9.1. It can be said that stages one and two have been separated out from the general consideration of all the factors at stage three because they deal with matters frequently central to (and often decisive of) such an application.

9.2. It is clear that the CA isolated the seriousness and significance of the default, because it took the view that defaults which were considered not to be serious and (perhaps or) to be of little significance would be unlikely to require any detailed consideration at stages two and three. Hence, a trivial delay of a few days in compliance where this did not significantly prejudice the prospect of a fair trial would be earmarked for relief. Note that the other stages must be considered, because (eg) the default may have been deliberate with an intention to cause difficulties which did not actually materialise (considered at stage two), or may follow on from a series of past failures (to be considered at stage three). Stage one is really designed to focus on the possibility of there being a likely reason to grant relief. It is an opportunity to identify the presence of a factor which often leads to it being granted.

9.3. The reason for the default occurring appears to have been singled out because certain reasons may strongly suggest that relief should, or should not, be given. Deliberate default will often properly incline an EJ to refuse relief. Understandable default (eg because someone about to comply was taken ill, or an entry in a diary was recorded incorrectly) will often have the opposite result. However, it is important to note that such matters must be seen in context. An otherwise ‘excusable’ delay may not give rise to relief where the time for compliance had been carefully selected to give one party the maximum time to comply, leaving the other with the minimum period of time to trial.

9.4. The final stage is to look at all the factors. For CPR3.9 purposes Denton says that the judge must give ‘particular weight’ to the two factors given special mention in the rule. That is, first, the efficient conduct of litigation (said by the CA to require consideration of the effect of the breach) and, secondly, the importance of complying with rules, orders etc.. I would suggest that whilst these are not factors singled out in the ET Rules, they are both matters which an EJ would be expected to have in mind in every case. The first may be said already to be considered at the first stage, so far as the particular case itself is concerned, the second is a factor that EJs have often had regard to. The CA felt that the importance of that second matter may have been given insufficient attention in the past: that is a point which EJs may well seize upon to give it particular prominence. The fact that the ET system is not presently under the strain it once was will not be seen as a reason to be more lax in considering such applications. 

  1. In summary, I consider that the higher courts will expect an EJ considering an application for relief from sanctions to approach the matter in a similar way to that suggested in Denton. What seems to me beyond question is that an EJ who does that will find the approach adopted to be beyond criticism by higher courts. Hence, that is the approach to expect from and to urge upon an EJ. 

The possible wider impact of Denton

  1. The ET frequently has to deal with one other kind of application to which a similar approach may be adopted. That is applications to amend claim forms and responses. One can detect similarities between the approach in Denton and that embraced by Mummery P in Selkent Bus Co Ltd v. Moore [1996] IRLR 661 (and approved in numerous subsequent decisions). It may be that adopting the same three stage test in such cases will enable such applications to be considered more easily.
  2. I find it helpful to consider an application to (say) add an alternative way of bringing the same cause of action in that way. If it arises from facts substantially already in the claim form it is likely to be allowed (stage one) subject to the impact on the conduct of the case, but the reason for omitting it in the first place may be significant (stage two) and all the factors must be considered (stage three) including whether there have been previous applications to amend, or failures to comply with orders and so forth

[1] Jackson LJ was in the minority is proposing an even more general ‘interests of justice’ approach.

Posted: 27.10.2014 at 16:30
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