Relief from Sanctions during a Pandemic
November 13, 2020
Let’s hope that any guidance taken from this article applies solely to 2020. How does the COVID-19 pandemic and its fallout influence the courts consideration of an application for relief from sanctions?
CPR 3.9 governs any application for relief from sanctions. The court will consider all the circumstances of the case, so as to enable it to deal justly with the application.
The Court of Appeal, in Denton v TH White  EWCA Civ 906, provided guidance for such applications. The “three stage test” applies:
- Identify the seriousness and significance of any failure to comply with a rule, PD or order;
- Is there a good reason for why the default occurred?
- Consider all of the circumstances of the case so as to deal with it justly.
Serious and Significance
The threshold is low. In practice, a failure to comply with a rule, PD or order is usually deemed serious/significant. Most courts encourage applicants to move on from this limb of the test. If the applicant fails to comply with a rule, PD or order during a pandemic, the failure remains serious/significant.
Why did it happen?
In Mitchell v News Group Newspapers Limited  EWCA Civ 1537 the Court of Appeal gave some guidance as to what might be considered good reasons for a serious and significant breach. One example was provided at Para. 43 of the decision:
“In short, good reasons are likely to arise from circumstances outside the control of the party in default…”
It doesn’t take much imagination to apply this example to a global pandemic and a national lockdown. The impact of COVID-19 and national/local lockdown is clearly outside of the control of the parties to litigation. In March 2020, overnight, lawyers were required to work from home. For many, their systems were simply not prepared. It was this overnight need to work remotely that caused many breaches. The question is, how much sympathy does the court have for lawyers in the current situation and, crucially, for how long will that sympathy last?
All of the circumstances
CPR 3.9 specifies that the court should consider the need:
- For litigation to be conducted efficiently and at proportionate cost; and
- To enforce compliance with rules, practice directions and orders.
From 2nd April 2020 to 30th October 2020, CPR PD 51ZA, Para. 4 inserted the following consideration:
“In so far as compatible with the proper administration of justice, the court will take into account the impact of the Covid-19 pandemic when considering applications for the extension of time for compliance with directions, the adjournment of hearings, and applications for relief from sanctions.”
The Courts Approach
Depp II v News Group Newspapers Ltd and Anor  EWHC 1237 (QB)
The Defendant made an application for a declaration that the claim was struck out as a result of the Claimant’s alleged failure to comply with an unless order for disclosure. The Claimant made an application for relief from sanctions. The Defendant had argued that the trial, should it go ahead, would absorb vast resources. Five courtrooms would be needed to observe social distancing. In response, the Claimant pointed to the COVID-19 pandemic as causative of the extensive resources needed. This was nothing to do with the Claimant’s breach. The court granted relief from sanctions. As part of its consideration of all of the circumstances of the case, the court made the following comments [Para. 30(vi)]:
“This trial will be unusually resource intensive. As Mr Sherborne submitted, this is a consequence of COVID-19. As it happens, the same pandemic has led the courts to favour where possible the use of technology to conduct hearings remotely. Somewhat ironically, there is not therefore quite the same competition for court resources that there would be in normal times and therefore the continuation of this trial will not necessarily be at the expense of other litigants and cases. Mr Sherborne argued that the demand on the court was independent of the Claimant’s breach. Of course, the COVID-19 pandemic is not the result of the breach, though the breach has led to two quite extensive hearings and two reserved judgments.”
Stanley v Tower Hamlets LBC  EWHC 1622 (QB), Julian Knowles J
The Claimant issued proceedings for data protection breaches. The Claimant obtained judgment in default of an acknowledgment of service. The Defendant applied to set aside the default judgment and sought relief from sanctions. In considering the application of the principles of Mitchell/Denton, the judge noted that he was bound to take account of the requirement set out in CPR PD 51ZA, Para. 4.
In this case, the Claimant served the claim form two days after the Defendant closed its offices due to the national lockdown. The Judge stated that the Claimant ought to have checked that service by post was “possible and feasible” at the time. This “was an obvious step which he should have taken”.
Notwithstanding the need to secure compliance with rules, to ensure that litigation is carried out proportionately, it would been “unconscionable” to enable the Claimant to benefit from a public health crisis.
There are many unreported cases where COVID-19/the national lockdown is identified as the reason for a breach. Generally, the court will have sympathy for those who were in breach at the time of significant change to their working practices. However, that sympathy is and will continue to wane. We are seven months on from the national lockdown. The court will expect adaptations to have been made to avoid further breaches. Further, the court will expect parties to be prepared for further restrictions (whether that be local or national). The likelihood that a defaulting party can successfully blame COVID-19 for a breach is decreasing by the day.
David is a member of the Personal Injury: Defence team at Exchange Chambers.