Sanctions and relief from sanctions

Question 1

What are sanctions?

Answer 1

Sanctions are measures which are bad for a party and which aim to ensure compliance with court rules and orders. Sanctions can relate to:

Interest e.g. reducing the interest payable to the claimant as a sanction imposed on the claimant.

Costs e.g. ordering the defendant to pay costs on the indemnity rather than standard basis.

Striking out a statement of case

Question 2

What is the courts power in relation to imposing sanctions?

Answer 2

The court can impose sanctions by court order. The court may either:

*Impose a sanction immediately; or

*Make an unless order. An unless order is an order which provides for an automatic sanction in the event of non-compliance with the order. The order must specify the date and time within which the act must be done.

For example, “unless the defendant serves its list of documents at or before [time and date] its defence will be struck out and judgment entered for the claimant”.

Question 3

What are sanctions imposed by the CPR?

Answer 3

There are also various provisions of the CPR that impose automatic sanctions for default, examples include where failure to disclose an expert report prevents a party from using that report at trial and where failure to file a costs budget will be treated as only filing a costs budget of applicable fees.

Question 4

What is the general rule in relation to the timing of complying with a CPR or court order?

Answer 4

General rule is that the time specified by a CPR or court order for a party to do any act may be varied by the written agreement of the parties, unless a rule or PD provides otherwise or the court orders otherwise e.g. rules prevent the parties from agreeing to vary the date for CMC and most other types of hearing.

Question 5

What is the exception to the general rule in relation to the timing of complying with a CPR or court order?

Answer 5

Where a rule, practice direction or court order –

(a) Requires a party to do something within a specified time, and

(b) Specifies the consequence for failure to comply,

The time for doing the act must not be extended by agreement between the parties except that the parties can agree an extension of time by prior written agreement (i.e. before the deadline is reached) for a maximum of 28 days provided that this does not put at risk any hearing date.
This is unless the court orders otherwise.

Question 6

What happens if there is non-compliance with orders imposing sanctions?

Answer 6

If a party fails to comply with a rule, PD or court order imposing a sanction, the sanction takes effect unless the party applies for and obtains relief from that sanction.

Question 7

On an application for relief from sanctions, what should the court consider?

Answer 7

The court will consider all the circumstances of the case so as to enable it to deal justly with the application. The rules expressly require the court to consider the need:

For litigation to be conducted efficiently and at proportionate cost.

To enforce compliance with rules, PD and orders.

An application for relief must be supported by evidence

Question 8

What is the Denton case?

Answer 8

This is the test the court will apply for granting relief from sanctions alongside CPR 3.9:

1. If the breach is neither serious nor significant, then relief should be granted
   *Consider whether the breach has imperilled future hearing dates or otherwise disrupted the conduct of litigation.
2. Consider why the default occurred
3. Having considered the reason for the default, the court should then evaluate all the circumstances of the case
   *With particular weight to the need to conduct litigation efficiently and at a proportionate cost and to enforce compliance with rules, PD and orders.

Question 9

What happens if a party makes an in-time application?

Answer 9

The rules about relief from sanctions apply when a deadline has passed and the application is made after the deadline. This is different from when a deadline is looming and a party realises that it is not going to be able to comply with that deadline. This is known as an in-time application.

Question 10

Is setting aside a default judgment relief from sanctions?

Answer 10

An application to set aside default judgment is treated as an application for relief from sanctions when the defendant is relying on a discretionary ground to set aside a default judgment.

In other words, when considering whether to set aside a default judgment the court should apply the Denton principles.