Liverpool Law Bulletin December 2013 December 2013 | Page 12

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Judges’ Question Time

This month we include the questions and responses to the Dispute Resolution topics
1. Under the amended terms of Rule 3.9 is it correct that all parties should assume that
every Order of the Court is a pre-emptory order such that if it is anticipated that there will
be a breach of a term permission will be required but may not necessarily be granted to
obtain relief? In this regard does the recent decision of Mr Justice Andrew Smith in Rayyan
Al Iraq C Ltd –v- Victory Marine Inc indicate that the Courts in their consideration of all the
circumstances of the case are prepared to temper the tough approach that has otherwise
been applied since 1st April 2013?

1. The new and old CPR Part 3.9 both required the court to consider all of the
circumstances. It is the extended overriding objective at CPR Part 1.2(f) coupled Part
3.9(1)(b) both of which draw attention to the need to enforce compliance with rules,
practice directions and court orders that sets the tone. Moreover, the CPR Part 1.1
requirement to deal with cases ‘justly’ and ‘at proportionate cost’ will apply. It is likely
to be very difficult to appeal against an individual exercise of discretion, but the
Court of Appeal has already signalled that the courts will be required to be less
tolerant of breach than used to be the case (see Fred Perry v Brands Plaza [2012]
EWCA Civ 224). I submit that the only safe and correct approach is as follows.

* if in breach of a rule practice direction or order, an application must be made to
regularise the position
* even if the breach did not attract a 'sanction' as such, it still requires the
indulgence of the court which requires the court to apply Part 1.2(f) and therefore
to enforce compliance and also Part 1.1 costs proportionality
* it will be dangerous in the extreme to assume any tempering of the tough
approach suggested
* where the breach did bring about a sanction such that Part 3.9 is engaged, that
will place the guilty party under an additional burden and even less tolerance can be
expected.

Andrew Smith J at the moment is in a minority of 1 and every single high court or
appeal court reported decision is to contrary effect. Absence of ‘prejudice’ remains
relevant but will no longer be determinative and will not necessarily provide a
solution especially if the solution offends costs proportionality.

2.The Civil Procedure (Amendment) Rules 2013 SI No. 262 confirm at Section 22 (3) that
the extension of the small claims track limit from £5,000 to £10,000 will not apply to
allocation of the claim under Part 26 and more particularly under Part 26 8(f) for any claim
issued before 1st April 2013. Is it therefore correct that some claims which should be
subject to this transitional provision are automatically being allocated to the small claims
track? Is it also correct that the only way either party may address this point and obtain
clarity in respect of costs is within the Directions Questionnaire or by submission of an
application to the Court? In such circumstances how likely is it that the claim will be
reallocated to the fast track, and will the party making the application have to bear the
costs of their opponent?

2. I cannot answer this question at the moment because I believe it arises in an
appeal pending in the Liverpool County Court and the answer therefore will have to
await the judgment of the appeal judge who hears the case. But as a matter of
generality, s/he who is dissatisfied with either notice of proposed allocation or
allocation has no alternative but to raise that in the directions questionnaire or/and
by way of discrete application. S/he then is subject to the general case management
exercise of discretion as to both allocation and as to costs. Not only therefore will
outcome probably depend on the judgement of the District Judge bearing in mind all
of the factors in CPR Part 26.8 (which is therefore unlikely to be appealable) but not
only would the usual order for costs be that they follow the event of the application
(CPR part 44.2) but the court could take the view that it is appropriate to depart
from that if it forms the view that either the application itself or the costs thereof
offend the proportionality requirement of CPR Part 1.1. The message therefore is
beware of satellite litigation of these issues. Presumably claimant solicitors in modest
value claims will justify the success fee irrecoverable from the defendant in part on
the risk of the adverse costs consequences of allocation to the small claims track.

3.The report of the Transport Select Committee has made strong recommendations against
the increase of the small claims track limit on the basis that it would have an impact upon
accessibility to justice. To what extent is it believed that access to justice would be reduced
by a SC increase and do the Court believe ]]