Distinguishing unwise decision-making from lacking capacity
Dec 12 2023
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As the UK national lockdown continues, the High Court judgement in the case of Masten v London Britannia Hotel Ltd 2020, provides a reminder that the Court will not always view the Covid-19 pandemic as a reason for missing court deadlines.
The Senior Courts Costs Office (SCCO) refused an application to set aside a Default Costs Certificate (DCC), where the Defendant’s failure to serve a Points of Dispute (POD) on time was due to the organisational impact of Covid-19. In doing so, it provided guidance on the correct way to deal with the prospect of missing a court deadline, and an indication of how it will approach similar applications in the future.
In light of the Claimant’s successful personal injury claim, the Claimant’s representatives served a Notice of Commencement and a Bill of Costs (claiming just over £363,500). The parties agreed extensions for service of the POD up to 28 February 2020. When this deadline was not met by the Defendant, the Claimant’s representatives filed a request for a DCC, which was issued on 16 June 2020.
There was a delay in preparing the POD and processing the DCC by the Defendant’s costs draftsman. In attempting to respond to the DCC, they encountered issues with the SCCO’s CE-filing system, and the application was not successfully filed until 26 August 2020.
In considering whether the application to set aside the DCC had been made promptly, the court acknowledged the issues with the SCCO’s filing system. Furthermore, the relevant date was deemed to be the date that the Defendant knew, or should have known, that a DCC had been issued, rather than the due date of the POD.
The Defendant’s cost draftsman submitted that they were late in preparing the POD and responding to the DCC because the file handler had prioritised other work without re-allocating the file. Moreover, the Covid-19 pandemic had led to an increase in staff workload, and as the firm operated on a predominantly paper-based file system, this had caused difficulty with the majority of their staff working from home. The court held that this was not sufficient to excuse the negligent mismanagement of files, particularly as there was an option to make an application for an extension of time when it became clear that they would miss the deadline, which was not exercised.
In refusing the application, Master Leonard highlighted an avoidable delay of four months, with no good reason. He emphasized the importance of “dealing with cases expeditiously, of complying with rules, practice directions and orders”.
In the case of Stanley v London Borough of Tower Hamlets 2020, the High Court took a different view and set aside a default judgement when the failures of the Defendant to respond arose out of the Covid-19 pandemic, as these were deemed to be outside their control. In the Masten case, the court viewed the inaction of the Defendant’s costs draftsman in failing to prioritise or reallocate the case to be inexcusable. Conversely, in the Stanley case, it accepted that the Defendant council had no choice but to close their office due to government restrictions, and took the view that the Claimant should have considered the effects of office closure on the Defendant’s ability to receive correspondence.
The Masten case demonstrates that the court will not look favourably upon those that allow deadlines to be missed without undertaking any action to prevent this, even if such inaction is due to the organisational impact of Covid-19.
It is also relevant when considering co-operation between parties in agreeing extensions. By the time the Defendant had contacted the Claimant inviting them to set aside the DCC, there had been a four-month delay. For that reason, the court was sympathetic to the Claimant for their refusal to do so. This is of importance given that Practice Direction 51ZA (which increased the time limit that parties could agree between themselves to extend time for compliance with deadlines to 56 days) has expired, and practitioners are operating under the previous CPR 3.8 limit of 28 days. The lesson to be taken from these two cases is that the Courts are more likely to be sympathetic to delays caused by the pandemic (whether that be because of a lack of access to the offices/file and/or staffing issues) if an extension has been requested in advance. Any delays should be kept to a minimum and applications made promptly.
Finally, both the Masten and Stanley cases involved missed deadlines by legal advisors due to circumstances surrounding Covid-19, rather than a clinical negligence setting in which a party is unable to comply with a deadline (a defence, or service of witness statements) due to clinical demands. Therefore, it is open to interpretation whether the court will be more sympathetic if the reason for the delay is due to clinical pressures as a result of the pandemic. We suspect that they will be, but again, any application should be made promptly and be supported by evidence detailing the cause and extent of the delay.
This article was written by Alisha Muhmood, Trainee Solicitor.