Legal Cost Specialists

Mitchell vs Denton – relief from sanctions

The guidance given by the Court of Appeal in Mitchell was that in relation to non-compliance with the relevant rule, practice direction or court order:

“If this can properly be regarded as trivial, the court will usually grant relief provided that an application is made promptly. … the court will usually grant relief if there has been no more than an insignificant failure to comply with an order”

The Court recognised:

“We acknowledge that even the question of whether a default is insignificant may give rise to dispute and therefore to contested applications. But that possibility cannot be entirely excluded from any regime which does not impose rigid rules from which no departure, however minor, is permitted.”

The Court of Appeal’s new guidance in Denton is that:

“we think it would be preferable if in future the focus of the enquiry at the first stage should not be on whether the breach has been trivial. Rather, it should be on whether the breach has been serious or significant.”

The Court recognised that “seriousness and significance” is perhaps no more clear-cut than “trivial”:

“We recognise that the concepts of seriousness and significance are not hard-edged and that there are degrees of seriousness and significance, but we hope that, assisted by the guidance given in this decision and its application in individual cases over time, courts will deal with these applications in a consistent manner.”

The new test to apply is:

“If a judge concludes that a breach is not serious or significant, then relief from sanctions will usually be granted”

There is clearly a range of significance in terms of non-compliance with rules, practice directions or court orders. At one end of the spectrum are “trivial”/”insignificant” ones. At the other are “serious or significant” ones. “Trivial”/”insignificant” ones might occupy the bottom 10-20% of the spectrum in terms of significance. “Serious or significant” ones might occupy the top 10-20%. There is therefore a world of difference between the Mitchell test where 10-20% of breaches might be saved by the first stage test (being categorised as “trivial” – everything at the bottom of the spectrum) and the Denton test which saves 80-90% of breaches which do not fall into the top 10-20% of the spectrum.

A 14 year old at their school debating society would not try to argue “trivial” and “not serious or significant” are the same thing.

It is therefore laughable that the Court of Appeal stated the guidance given in Mitchell “remains substantially sound”.

If a solicitor drafted a legal document and used the word “trivial” when they meant “not serious or significant” they would leave themselves wide open to a professional negligence claim. As Kerry Underwood recently commented: “When courts go wrong why do parties, rather than the state, have to pay the legal costs? If fees reflect full cost we should get full value.”

Fortunately the Court of Appeal is never bound by their own decisions and can overturn themselves whenever they feel like it. If it were otherwise we would now, for the first stage of the test, have two conflicting decisions of the same weight. Then we would be in a right mess.

3 thoughts on “Mitchell vs Denton – relief from sanctions”

  1. Jacques Hughes

    Of course, the CA is bound by its own decisions – I assume you were being ironic! However, where the CA interprets one its own decisions, lower courts are bound to assume the interpretation is right (see Sayce v TNT). So the statement that Denton is consistent with Mitchell is binding even though – as you say – it is laughable.

    If he were a politician – and after all in Mitchell he acted like one – John Dyson would probably have to resign.

  2. I theoretically have a case where a claimant solicitor never disclosed a CFA had been entered or premium taken out in any form before settlement.

    Pre 1 April 2013 Claimant almost certainly gets no additional liabilities but chances their arm with a relief app. Clearly a potential prejudice to PP.

    Post 1 April, post Mitchell, Claimant definitely gets no additional liabilities and would not even try for relief.

    Post Denton Claimant can refer to the dimwitted far reaching obiter guidance that I should be consenting to relief from sanction and not being an opportunist trying for a windfall and that this is not a case that is exceptional. If this is followed rather than the test, which it inevitably will be in some cases, the pendulum has swung back further than the pre 1 April position which surely was not the intention.

    Court of Appeal have got in wrong on Henry, then on Mitchell and now have got it wrong again in Denton.

  3. I have a similar case – although no ATE – where no notice of funding arrangement with letter of claim and no Notice of Funding after proceedings issued and served.

    In my view, that is a serious and significant breach and will not advise consent to relief from sanction. No application yet as PODs only served last week.

    Surely failure to provide notice of funding is a serious and significant breach of both practice direction and rule.?

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