No Clearway to Relief from Sanctions for Late Witness Statements
In Clearway Drainage Systems Ltd v Miles Smith Ltd (08/11/2016) the Court of Appeal upheld a decision not to grant relief from sanctions for the late service of witness statements. This article reviews the decision, other similar recent cases and provides a reminder of the perils of failing to comply with case management directions and the Civil Procedure Rules.
The parties had been ordered to exchange witness statements by 4pm on 8 April 2016. At a pre-trial review on 26 May, the Defendant applied to strike out the claim for the Claimant’s failure to serve its witness statements. The hearing was adjourned to 14 June. On 9 June, the Claimant applied for relief from sanctions for the non-service of its witness statements. The Claimant served its witness statements on 13 June. At the hearing on 14 June it emerged that the statements were password-protected and so the Defendant could not read them. The Claimant also attempted to rely on a witness summary of a fourth witness but had not served a copy of the summary in accordance with CPR 32.9. The matter was adjourned to 21 June to enable the Defendant to be served with non-password-protected witness statements and the Claimant to apply for relief from sanctions in relation to the witness summary.
First instance decision
The court refused relief from sanctions in respect of the witness statements and the witness summary. HHJ Moulder handed down a detailed judgment with reference to the three-stage test in Denton, as follows:
1. Despite the late service having not imperilled the trial date or caused any particular prejudice, service two months late and less than a month before trial should be viewed as serious or significant because it affected the efficient progress of the litigation;
2. There was no good reason for the breach. The Claimant's solicitors' explanation was that they did not wish to be "bulldozed" into serving statements when they considered that there was still a chance of obtaining a full witness statement from the fourth witness. However, statements could have been served on time, with supplementary statements to follow if necessary. An application could also have been made to extend time before the deadline; and
3. In all the circumstances, the effect of the breach had been to prevent the Court and the Defendant from conducting the litigation efficiently and at proportionate cost. The Claimant's solicitors had not acted promptly in applying for relief. They could have applied at the 26 May hearing, but did not until 9 June. That was itself a breach of CPR 23.7(1)(b) because it was less than three clear days before the 14 June hearing. The explanation that several matters within the fee-earner's workload had needed urgent attention at the same time did not suggest that the fee earner had been unable to act promptly. The possibility that the claim could be struck out should have been appreciated and the matter should have been prioritised. It was also unacceptable that the statements had been provided in an unreadable form. Despite the Claimant having done nothing wrong, its representative had ignored the rules and caused disruption and expense.
The Master of the Rolls, Sir Terence Etherton, and King LJ confirmed that Denton remains good law in stating that whereas the two factors listed at CPR 3.9(1)(a) and (b) “may not be of paramount importance… they are of particular importance and should be given particular weight at the third stage when all the circumstances of the case are considered”. They concluded that:
1. HHJ Moulder had undertaken a “conscientious and impeccable” analysis of the three stage Denton test and was fully entitled to give importance to the Appellant’s solicitor’s lack of promptness in applying for relief;
2. A case management decision by the first instance judge would have to be wholly wrong before it would be overturned; and
3. There would be no return to the practice of previous years where costs orders were generally considered sufficient penalty for lax compliance; consistency in taking a rigorous approach is imperative.
Other recent cases
In Al Hamadani v Al Khafaf  EWHC 38 (QB) a witness statement was served 20 days late. Warby J granted relief from sanctions holding that failure to comply with the deadline was a serious and significant breach. The proper course was to seek an extension of time before expiry of the deadline to enable the court to retain control over the process; however, the delay was less than three weeks and the evidence was served more than two months before trial, by which stage the Defendant was debarred from taking part, meaning that he was not prejudiced by the delay and the orderly and proportionate progress of the litigation was not threatened.
In Sloutsker v Romanova  EWHC 545 (QB) Warby J granted the Claimant relief from sanctions after its failure to serve a witness statement in time. Here, service was four working hours late. The court held that although a failure to serve evidence by the deadline was a serious breach, such a default without good reason would not always lead to the refusal of relief from sanctions. Given that the breach was far from being at the extreme end of the scale of seriousness, was not deliberate and had no serious effect on the efficient progress or cost of the litigation, it was appropriate to grant relief from sanctions.
It is clear from all three cases that the late filing of witness statements will usually be a serious and significant breach. Whether relief is granted will therefore depend on the reason for the breach and a wider consideration of all the circumstances of the case. The case of Clearway is a reminder that the Court will not only take a “rigorous approach” to applications under CPR 3.9 but will also expect applications for relief to be made promptly.