1. Analysis of recent case law in light of Mitchell costs case (appeared in Commercial Dispute
Resolution online publication)
The expanding caseload relating to post-Mitchell relief from sanction cases has recently
been strengthened by two judgments where relief was granted.
One concerned a Claimant’s failure to include a full Statement of Truth with their costs
budget and the other a case where the Defendants failed to comply with an Unless Order
relating to disclosure by 46 minutes.
In The Bank of Ireland & Anor v Philip Pank Partnership [2014] EWHC, the Defendant argued
that the Claimant’s failure to include a full Statement of Truth along with their costs budget
(in accordance with Precedent H) meant that that it was not filed correctly in accordance
with CPR 3.13 and that consequently the sanctions laid out in CPR 3.14 should apply (namely
that only applicable court fees could be claimed).
In considering the merits of this argument, Mr Justice Stuart-Smith acknowledged that
although Practice Direction (PD) 3E outlines the format with which the costs budget should
be set out and is supplemented by PD 22 (which outlines the wording for the accompanying
Statement of Truth): “there is nothing in the rules or practice directions which requires any
and every failure to comply with the formal requirements for budgets as rendering the
budget a nullity, as opposed to being one which is subject to an irregularity”.
If one were to extend this line of reasoning, Justice Stuart-Smith argued that any failure to
comply with the wording of Precedent H or PD 22 would render the costs budget a complete
nullity even if “words had been omitted, mis-spelt or muddled up”. Such a state of affairs
would, in his opinion, “serve only to bring the rules of procedure and the law generally into
disrepute”.
Indeed, the judge had sympathy with the Claimant’s solicitor’s assertion that ordinarily he
would have adopted the exact wording as prescribed in the practice direction but that in
this instance, because he had the costs budget prepared by a third-party costs draftsmen,
he failed to notice that the document did not contain the full Statement of Truth.
Although the budgeting sanction in CPR 3.14 was not therefore triggered, Justice Stuart-
Smith went on to consider what would have been the outcome if it had; ruling that relief
under CPR 3.9 would have been provided on the facts of this case.
In support of this supposition, he relied on two citations. Firstly, he considered the recent
high-profile Court of Appeal case of Mitchell which gave some guidance as to whether to
grant relief under the more rigorous application of CPR 3.9. Notably, the Master of the Rolls
in that ruling pointed out that the court will normally grant relief: “if there has been no more
than an insignificant failure to comply with an order: for example, where there has been a
failure of form rather than substance”. Relating this test to the facts of the case, Justice

2. Stuart-Smith was of the opinion that: “the inclusion of the words Statement of Truth and the
absence of the wording prescribed by PD 22 is a failure of form rather than of substance”,
going on to say that, “there can have been no reasonable doubt in the Defendant's mind that
the intention of the signing partner was to certify the costs as required by Precedent H but
that he had made a mistake in the form of the document”.
Secondly, he went on to consider Lord Dyson MR’s 18th Lecture in the Jackson
Implementation Programme, in particular the part which stated that even in light of the new
more rigorous accordance to rules and procedure there should still be relief against
sanctions should circumstances require it. As Lord Dyson said: “the court’s new no-nonsense
approach does not make compliance an end to itself which is superior to doing justice in any
case”. The new approach should not, in the words of Dyson “change the CPR to trip wires for
the unwary or incompetent”.
In Lakatamia Shipping Co Ltd v Nobu Su & Ors [2014], the Defendants’ solicitors applied for
relief from sanctions after they were 46 minutes late complying with an Unless Order
relating to disclosure.
The delay was due to the fact that the Defendants’ solicitors were working on the
assumption that the deadline for disclosure was 5.00pm rather than 4.30pm - which was in
fact the cut-off point in the absence of any express wording in the Unless Order (as set out
in D19.2 of the Commercial Court Guide).
In deciding the case in the favour of the Defendants and therefore allowing relief from
sanctions under CPR 3.9, Mr Justice Hamblen paid particular consideration to the tests as
set out in Mitchell – namely whether the breach was trivial and/or whether there was a
good reason for it.
Although the judge acknowledged that the mistake regarding the deadline was
“understandable given the silence of the Order on this point”, he ultimately considered that
there was no good reason for it, since “it was due to a mistake rather than extraneous
circumstances”.
As regards to the triviality or otherwise of the breach, Justice Hamblen considered that the
Defendants’ solicitors had narrowly missed the deadline and that this was expressly
contemplated in Mitchell as being de minimis and usually deserving of relief from sanctions.
In deciding upon whether the non-compliance is deemed trivial, consideration should also
be given to the effect of the breach and in this case “it has caused no prejudice to the
Claimant, and none is suggested”.
The Claimant sought to argue that the Defendants’ previous behaviour should have some
relevance to the current case and that this should be viewed through the prism of previous
defaults by the Defendants. In refuting this argument, although Hamblen stated that “the

3. history of default may be a relevant general circumstance to take into account”, the primary
consideration is “of the default in question, not other defaults at other times”.
The Claimant also submitted that the disclosure provided by the Defendants was deficient,
constituting a serious rather than trivial default. In refuting these claims, while the judge
acknowledged that eight further documents were disclosed a week later, this did not
detract from the real compliance made at the time. In ascertaining whether disclosure is
complied with for a purposes of an Unless Order, Hamblen cites the Court of Appeal
decision in Realkredit Danmark v York Montagu [1998] WL 104421 – which considered that
disclosure will be met as long as a list is provided and that this list is not “illusory”. The list
will be deemed to be “illusory” if, as Toulson LJ stated: “the court can infer lack of good faith
where it is obvious from patent deficiencies in the list that it had been prepared in apparent
but not real compliance with the obligation to give discovery”.
Finally, the Claimant also sought to rely on “other circumstances” as set out in the previous
version of CPR 3.9(1) to point against the grant of relief even if the non-compliance was
trivial. However, Hamblen stated that this has little bearing and that the new CPR 3.9 are of
paramount importance. As Hamblen himself said in a case he was presiding over only a
week before this one – Newland Shipping & Forwarding Ltd v Toba Trading - “the most
relevant circumstances are likely to be the two identified in Mitchell, namely the nature of
the non-compliance and the reason for it”.
Both cases illustrate that even in the post-Jackson reform world of greater adherence to
procedure and rules, courts are willing to look at the circumstances surrounding non-
compliance, and not, in the words of Lord Dyson, “make compliance an end to itself”.
Further useful guidance has been provided as to the Mitchell test of what constitutes a
‘trivial’ breach, with notable comments being made regarding previous behaviour and also
the effect the breach has on the other party. And although in both of these cases judgment
was found in favour of those accused of non-compliance, the facts of the cases illustrate yet
again the importance of preparation and strict timetabling in order to ensure deadlines are
met and the headaches of attempting to extricate oneself from the burden of sanctions
avoided.