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Relief from Sanctions – Mitchell & Denton in an Employment Tribunal Context

Introduction

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

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.
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.
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

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.
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).
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

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.

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.

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

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.
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