Relief from sanctions: the third stage does the work

Stage one is over-argued

Applicants spend a great deal of effort arguing that a breach was neither serious nor significant, in circumstances where the court was always going to find that it was. A missed deadline that required an application, a hearing and an order to resolve has consumed court time and the other side’s costs, and describing it as trivial invites the obvious answer.

The tactical cost of over-arguing stage one is real and is underestimated. A party that opens by minimising its own default has framed itself as not taking the breach seriously, which is precisely the impression it needs to avoid before it gets to the part of the test that matters. Conceding seriousness where it is obvious, and moving on quickly, is a stronger position than winning a marginal point about significance.

Stage two attracts the opposite error. There is a narrow category of genuinely good reasons, and most defaults do not fall into it. Solicitor oversight, pressure of other work and resourcing problems are not good reasons, and presenting them as though they were wastes the opportunity to present them honestly as what they are: circumstances relevant at stage three. The absence of a good reason is not fatal. Pretending to have one is close to it.

Stage three is the application

All the circumstances of the case is a genuinely open enquiry, and the two factors the rule names, the need to conduct litigation efficiently and at proportionate cost and the need to enforce compliance with rules, practice directions and orders, are expressly stated to be considerations rather than the whole of it. That leaves room for material that has to be put in evidence, because the court will not assume it.

The things that carry weight are concrete, and each of them has to be put in evidence:

• Actual prejudice to the other party, as opposed to prejudice in principle.
• Whether a trial date is affected, which is close to decisive when the answer is yes.
• The applicant’s compliance record in the case as a whole, which cuts both ways and is worth putting in when it is good.
• Whether the respondent’s own conduct contributed to the default.
• Promptness, which is not a separate hurdle but is weighed here, and where a delay between realising the default and applying is far more damaging than the original breach.

Promptness deserves particular attention because it is entirely within the applicant’s control after the fact. A party that defaults and applies within days is in a different position from one that defaults, hopes the point will not be taken, and applies once the other side raises it.

The buffer is narrower than it looks

CPR 3.8(4) lets parties agree in writing to extend time for compliance by up to 28 days, provided the extension does not put a hearing date at risk. It is relied on more loosely than its terms allow. Three limits are worth being precise about.

• The 28 days are an allowance, not a renewable quantity. The rule does not say in terms whether successive agreements can carry the total beyond 28 days, and the point is not free from doubt. The prudent working assumption is that it cannot, because the contrary reading would let parties extend indefinitely without ever troubling the court. A party that has used part of it should treat what is left as thin, not as a fresh 28 days.
• The agreement must be prior and in writing. An exchange in which one side proposes an extension and the other simply does not object is not obviously within the rule.
• The proviso about hearing dates is objective. It is not satisfied by the parties agreeing between themselves that the trial window is safe, if in fact the consequential steps no longer fit inside it.

Beyond those limits the parties cannot extend time by agreement at all where the rule, practice direction or order specifies the consequence of failure. An agreement purporting to do so is ineffective, the sanction bites, and the party that relied on it is making a relief application from a worse starting point than if it had simply applied for an extension in time.