Kerry Underwood

TRIAL FEE PAID LATE – TRIAL SHOULD STILL GO AHEAD

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The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

 

In

Badejo v Cranston [2019] EWHC 3343 (Ch)

the Chancery Division of the High Court allowed an appeal and granted relief from sanctions against an automatic strikeout of a claimant who had failed to pay the trial fee on time.

This was an appeal against a decision of the Central London County Court, which is still notionally open, but performing barely any better than the 90 County Courts closed since 2010, and where the loss of the trial date was effectively caused by the court staff.

Consequently, it should not be treated as meaning that such failure to pay the trial fee will always be treated so lightly, although the decision does disagree with that in

Hyslop v 38/41 CHG Residents Company Limited [2018] EWHC 3893 (QB)

where the High Court overturned the trial judge’s decision to accept an undertaking from the claimant’s solicitor to pay the fee and to allow the trial to proceed.

 

Here the High Court said:

 

“If the county court had heard the application shortly before or at the trial, I cannot conceive that if a solicitor’s undertaking had been given to pay the trial fee, relief would have been refused…”

 

So, there are two recent High Court decisions strongly disagreeing with one another, as that was precisely what happened in Hyslop – the Circuit Judge accepted the solicitor’s undertaking, but the High Court overruled that decision on appeal.

 

See my blog  – COURT FEE REMISSION .

 

Here, the court fee was due on 13 August 2018 in relation to a trial due to commence on 10 September 2018 and on 20 August 2018 the claimant’s solicitors realised their error in not paying the fee, and the individual solicitor conferred with his partners on 21 August 2018 and issued an application on 22 August 2018 for relief from the sanction of automatic strikeout.

The solicitor asked for a telephone hearing and pointed out the imminent trial date.

 

Paragraph 6 of the judgment here, gives a flavour of Central London County Court:

 

“The County Court at Central London did not list the hearing as requested. On 6 September, when the appellant’s solicitors made enquiry as to what was happening, they were informed by the court that the application would be heard on the first open date after seven days, but that no order had been made adjourning the trial. It appears therefore that in this case the trial had not been removed from the list as a result of the automatic strikeout that had occurred. This indeed was acknowledged in the judgment in the lower court. The trial date was in fact vacated by the court on the following day, Friday 7 September, but the application for relief against sanctions was not heard until 4 October 2018, by HHJ Roberts.”

 

The judge refused relief, holding that a CPR 3.7A(1)(vii) provides for automatic strikeout if the trial fee is not paid, it was not open to the claimant to argue that is was disproportionate to refuse relief, or that the sanction was disproportionate.

The judge also regarded the loss of the trial date as important and held that the application was not made promptly.

 

Here the court said:

 

“10. In my judgment the Judge misdirected himself in saying that the appellant could not rely on the criterion of disproportionality in relation to the sanction. In paragraph 13 of his judgment, he had recorded the appellant’s submission that it would be disproportionate not to grant relief from sanctions for an inadvertent failure. It seems to me clear that in the paragraph of his judgment that I have just read, the Judge is not referring to whether or not the rule itself is disproportionate in imposing a sanction of automatic strikeout, but is referring to the argument as to whether or not it would be disproportionate to refuse relief.

11. The test, when one reaches the third stage of the Denton v White analysis, is whether it is just in all the circumstances to grant relief, and therefore proportionality of the sanction, as compared with the effect of the breach and the consequences of refusing it, must lie at the heart of the analysis. It is inevitably harder for an applicant to say that refusing relief would be disproportionate to the breach where the breach is a serious breach and is unexplained, but the court must assess the justice, including the proportionality, of refusing or granting relief in all the circumstances of the case. It appears to me that the Judge did not appropriately consider the proportionality of the consequences of refusing relief to the nature of the breach because he considered that it was not open to the appellant to argue about proportionality.

12. I also consider that the Judge was wrong in principle to hold against the appellant as strongly as he did the fact that the trial date was lost. In a busy court centre, it may well happen that when an automatic strikeout occurs, a case is removed from the list, the hearing vacated, and another case takes its place. In those circumstances the trial date may well be lost, but the Judge did not say that that was what happened in this case, and indeed it is clear that that did not happen because the appellant’s solicitors were told the contrary on 6 September. The case was only removed from the list on 7 September, when the parties were ready for a trial and were seeking to know whether the trial and the application would be heard.

13. The application for relief was issued nearly three weeks before the trial. It identified the trial date, and asked for a telephone hearing. Although the word “urgent” was not used on the face of the application, the purpose of indicating the trial date is so that the court is able to see how soon an application must be heard, and whether it should be heard by the trial judge, either in advance of or at the trial itself. While acknowledging that court staff as well as judges are very hard-pressed and that it may not always be possible to process applications as swiftly as is desirable, that matter should not be held against litigants.

14. If the trial had not been vacated, as was the case, it ought to have been possible to list either a thirty-minute telephone hearing in advance of the trial date, or alternatively to have the matter heard before the trial judge, either in the week before or at the start of the trial. In these circumstances, in my judgment, that should have happened. Had that been done, the trial date would not have been lost. Mr Clark for the respondent acknowledges that if the application had been heard in the week before the trial, or even at the start of the trial, he could not sensibly have opposed it. I consider that concession to be properly made, and it casts particular light on what it was just to do on the facts of this case.

15. Thus, although the failure to pay the trial fee contributed to the loss of the trial date, in that it provided the opportunity for the trial date to be lost, on the facts of this particular case, it was not the cause of the trial being derailed. In view of what I have said about the judge’s approach, it is clear that the exercise of his discretion was legally flawed. In those circumstances it is appropriate for this court to exercise the discretion afresh, as both parties agree.”

 

The fact that the claimant could bring another claim or sue his solicitors meant that even more court resources would be used:

 

“22. If the county court had heard the application shortly before or at the trial, I cannot conceive that if a solicitor’s undertaking had been given to pay the trial fee, relief would have been refused, though no doubt relief would have been granted on terms as to the costs of the application and any costs wasted. Those costs would have been significantly less than the budgeted costs of the whole claim. The fact that the application was heard at a time after the trial date had passed is not the fault of the appellant, for reasons that I have given. So, the application should not be judged as one where the breach caused the loss of the trial date.

23. Ultimately, in my judgment, despite the fact that a moderately serious breach was committed without mitigating circumstances, justice is better done in this case by enabling the current action to proceed to a trial, rather than requiring the appellant to start new proceedings for his claim, or alternatively a claim for negligence against the solicitors, or possibly both. Paying all the costs of the current claim, and incurring the cost of funding two new actions, would in my judgment be disproportionate to the seriousness of the breach and any harm done to the administration of justice or to the respondent that is attributable to the breach, as opposed to being attributable to the court’s failure to list the application urgently. So far as prejudice to the respondent is concerned, the respondent would be equally troubled by a new claim that the appellant would be able to bring.

24. Of course in general terms defaulting litigants who have to apply for relief against sanctions may not find themselves in a position where the trial date can be saved. A busy court centre may well vacate the hearing date when it is aware that the trial fee has not been paid. In those circumstances a breach will have caused the loss of the trial date, and that will be a significant factor, as the Judge in the lower court considered it to be, in the exercise of discretion. I do not by granting relief in this case suggest that a prompt application will always be liable to result in relief being granted. In any given case, there may be circumstances that make it unjust to grant relief, particularly if the applicant has previously been in serious breach of directions or rules of the court. Litigants and solicitors are therefore well advised to take no risk with the late payment of court fees. For the reasons I have given, however, I will allow the appeal in this case, with the consequence that relief against sanctions is granted to the appellant. I will hear counsel now on the terms on which such relief should be granted.”

 

Comment

An outstandingly sensible, just and pragmatic decision which one hopes marks a sea-change in the judiciary’s approach to inadvertent and relatively harmless errors.

We are all sick of a situation where County Courts can delay for weeks or months, and where orders are sent out ordering solicitors to do things several weeks earlier, but where a solicitor, and client, can be hammered for a few days inadvertent delay.

I do not normally name judges, but I will make an exception – well done Mr Justice Fancourt!

Written by kerryunderwood

December 17, 2019 at 7:27 am

Posted in Uncategorized

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