This afternoon, the Commercial Court handed down a reserved judgment in which Mr Justice Leggatt gave important guidance on how the courts should treat applications for relief from different types of sanction under CPR Part 3.9.
In short, each type of sanction (as well as each type of breach) must be looked at on its own facts. As to an automatic stay that is triggered if security for costs is posted late, the Judge ruled that this constituted a sanction for the purposes of CPR Part 3.9.
However, it is a special sort of sanction, by reason of its inherently temporary nature and its purpose; therefore Mitchell v News Group was distinguished. Different, less stringent, principles should be employed where there an application to lift such a stay. Even if Mitchell had applied, it was held that the delivery of security for costs slightly late and with no effect on the trial time table is a trivial breach. In any event, in the circumstances of this case, there was a sufficiently good reason for that short delay.
Finally, the Judge had a warning for respondents to applications for relief. Resisting an application where the breach has had no impact on the trial timetable (but the disruption caused by a contested hearing under Part 3.9 has) can result in the respondent being ordered to pay the costs, as in fact happened in this case. The Judge specifically reserved judgment in order to ensure that this warning had the greatest impact possible.
James Watthey acted for the successful claimants.
View the final judgment.