Relief from Sanctions – Mitchell & Denton in an Employment Tribunal Context

The new CPR 3.9 and Mitchell

2. The debate as to the correct approach to
   applications for relief from sanctions in the High Court takes place against
   the background of the revising of CPR 3.9 as part of the Jackson reforms. The Rule sets out the general approach to be
   taken in all such applications. That is applications
   for relief from a sanction imposed for a failure to comply with a rule,
   practice direction, or court order. The
   classic case was a strike out following the failure to comply with an unless
   order.
3. The old High Court Rule required the court to
   consider all the circumstances, including nine particular matters. The revised rule abandoned mention of the
   nine matters, but not the need to consider all the circumstances. It makes particular mention of two factors,
   the efficient conduct of the litigation at proportionate cost and the need to
   have rules etc complied with.
4. Mitchellappeared, to many practitioners, to have adopted a rather draconian approach to
   that new CPR 3.9. It was one which
   bordered on zero tolerance. Only in the
   case of trivial breaches could an applicant expect to obtain relief. Where the breach was more than trivial, only
   a good explanation (usually involving matters outside the control of the party
   in question) would be likely to secure relief.
   The CA now tells us (in Denton)
   that Mitchell has been misunderstood
   and misapplied. 

The (old and new) ET Rules and the CA’s views in Neary

5. The ET Rules did not and do not follow CPR
   3.9. The test in Rule 38(2) for setting
   aside a strike out following an unless order is whether “it is in the interests of justice” to set it aside. That test had been considered, under the old
   ET Rules, in Governing Body of St
   Alban’s Girls’ School v. Neary [2010] IRLR 124. The case involved a review after a strike out
   consequent upon a failure to provide particulars. The test was whether it was in the interests
   of justice to set aside the order. The
   EJ held that it was not. The EAT held
   that as he had failed to take into account the nine factors to be considered
   under (old) CPR 3.9 the EJ’s reasoning displayed an error of law.
6. The CA held that it was the EAT’s approach which
   was in error. The ET Rules referred to
   the overriding objective, but did not incorporate CPR 3.9. The CA held that it was appropriate to
   require the ET to adopt the same general approach to such matters as the High
   Court, but not to require compliance with the specific terms of the CPR. The CA pointed out that all cases are fact
   sensitive and at the heart of any decision on such a matter would be the
   proportionality of the draconian sanction of strike out on the facts of the
   case. One touchstone that the CA has
   referred to in other cases is the impact of the default upon the prospect of
   having a fair trial (on the dates originally listed).
7. The new ET Rules similarly do not cross refer to
   CPR 3.9. Furthermore, the overriding
   objective as defined in Rule 2 does not refer to either of the two matters
   highlighted for particular consideration in the new CPR3.9. Of course, the list of factors (in Rule 2) to
   be kept in mind when considering the overriding objective is expressly
   non-exhaustive. 

Life after Denton – a three stage approach

8. What does the CA now say is the correct
   approach? The majority in Denton set out a three pronged test[1]: 

9. Although the approach has been divided into
   three, the first two ‘stages’ can be seen as specific aspects of the third,
   more general, stage. Following the approach
   of the CA in Neary it seems likely
   that the higher courts will expect an EJ to follow a broadly similar approach. They will certainly not criticise one who
   does so when exploring where the interests of justice lie: 

10. In
    summary, I consider that the higher courts will expect an EJ considering an
    application for relief from sanctions to approach the matter in a similar way
    to that suggested in Denton. What seems to me beyond question is that an
    EJ who does that will find the approach adopted to be beyond criticism by
    higher courts. Hence, that is the
    approach to expect from and to urge upon an EJ. 

The possible wider impact of Denton

11. The
    ET frequently has to deal with one other kind of application to which a similar
    approach may be adopted. That is
    applications to amend claim forms and responses. One can detect similarities between the
    approach in Denton and that embraced
    by Mummery P in Selkent Bus Co Ltd v.
    Moore [1996] IRLR 661 (and approved in numerous subsequent decisions). It may be that adopting the same three stage
    test in such cases will enable such applications to be considered more easily.
12. I
    find it helpful to consider an application to (say) add an alternative way of
    bringing the same cause of action in that way.
    If it arises from facts substantially already in the claim form it is
    likely to be allowed (stage one) subject to the impact on the conduct of the
    case, but the reason for omitting it in the first place may be significant
    (stage two) and all the factors must be considered (stage three) including
    whether there have been previous applications to amend, or failures to comply
    with orders and so forth