Fri, 19 Jun 2020
Thinking of discontinuing, or settling a claim? This 21-page Judgment (admonishment) provides some important guidance on the dos and don'ts, particularly the don’ts.
As explained by Holgate J at paragraph 101 one of the main purposes of a hearing such as that which led to the Judgment, is to ensure that lessons are learnt, not only by the parties, but also more widely, for the benefit of all court users, so that it becomes well understood that:
(a) that the sort of conduct which happened in that case should not recur and
(b) parties must comply with CPR 1.3 as well as court orders
A quick reminder for those who need it, CPR 1.3 is a duty on the parties to help the court to further the overriding objective of dealing with cases justly and at proportionate cost (see CPR 1.1). In particular, under CPR 1.1(2) dealing with a case justly and at a proportionate costs includes, so far as is practicable “(d) ensuring that it is dealt with expeditiously and fairly; (e) allotting to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases; and (f) ensuring compliance with rules, practice directions and orders.” CPR 1.2 requires the court to seek to give effect to the overriding objective when it exercises any power given by the Rules or interprets any rule.
The case concerned two claims brought by Westminster City Council (“the Council”) under s.288 of the TCPA 1990, challenging decisions made by planning inspectors. The substantive hearing was listed for 5 March 2020, but on 26 February, the court received an indication that the matters were likely to settle. The parties hoped that a draft consent Order would be submitted for the court’s approval by Friday 28 February, or at the beginning of the next week on 2 March - just three days before the hearing.
The court, apparently dissatisfied with that approach, directed that an order be filed by 10am on 28 February and required the consent order to be accompanied by a proper explanation as to why the parties had not complied with previous case management directions in the run up to the hearing. The parties were also required to provide a detailed chronology of the settlement negotiations. They were informed that they might be required to appear on 5 March 2020 to explain the position, depending on the answers received.
Subsequently, a relatively straightforward draft Order was submitted to the court that simply provided that both claims would be discontinued, the hearing date vacated, and the first defendant’s costs paid by the claimant (to be assessed on the standard basis if not agreed). There was little justification for the failure to comply with directions, and for lateness of the claimant’s withdrawal, save for the following:
- That the key issues in the claim had apparently been decided by the Court of Appeal on 18 December 2018,
- The majority of decisions by planning inspectors reflected that judgment, and the legislation which had given rise to the issues had been repealed; and
- The claimant did “not consider it a proportionate use of resources to continue this claim to final determination”.
Unusually, it appears that the claimant Council chose to withdraw, not because it thought it would lose but rather that, according to the claimant, the pursuit of its claims would not be “a proportionate use of its resources”.
In any event, the court was not happy with the explanation provided and the parties were required to attend on the 5th March to explain themselves.
It then transpired that the Council had decided not to proceed on 7 February 2020 (around 4 weeks before the hearing) but failed to tell the court. The court was not told until 27 February, by which time, it was not possible to use the 5 March date for the hearing of any other case.
At paragraph 39, Holgate J explained that:
“… Every time a party behaves in this way, the court’s resources are wasted, and other litigants have to wait longer for their cases to be heard and judgment given than would otherwise be the case. Plainly, this is not in the public interest and it is contrary to the ethos of the Planning Court and its objective of delivering justice within efficient timescales.
Holgate J recorded at  that the vast majority of cases in the Planning Court are handled with great diligence, and that the court is grateful for that continuing assistance. The Judge was also keen to stress that the behaviour which occurred in that case does not, in his experience, represent conduct typical of the claimant or its legal representatives or officials.
The following figures were given at paragraphs 42-44 of the Judgment:
(a) Over the last year, 141 cases were determined substantively at a hearing in the Planning Court.
(b) In addition to these, 11 claims were discontinued, 10 were withdrawn by consent,
(c) 61 were the subject of consent orders.
(d) Very broadly, the pattern is that just over one- third of the cases which are granted permission settle and just under two-thirds are litigated at a substantive hearing.
However, it was noted that in a significant proportion of the cases dealt with by consent orders or withdrawal, the court was notified of the settlement less than 10 days before the hearing. In some instances, the court was notified after the judge had spent time, sometimes a day or more, pre-reading the papers, or even on the day of the hearing. It has therefore become important for the court to emphasise the need for parties to adhere to good practice and to correct and discourage bad practice.
The following points can be taken from the Judgment:
- A party contemplating withdrawal or submission to judgment needs to ensure that it initiates the necessary steps sufficiently early to enable all parties, fairly, to have a reasonable opportunity to agree the terms of the order and the statement of the legal basis upon which relief is sought from the court and for a judge to consider approving that order .
- This needs to be done sufficiently far in advance of any fixed substantive hearing so that the court’s resources can be redeployed rather than wasted, and other cases may be heard sooner .
- If directions cannot be complied with, then the parties should let the court and other parties know and make an application to extend the time limit. Not contacting the court is not a permissible option .
- If the Court is to have a good chance of redeploying its resources by listing another case, then it needs to be notified of the possibility of a settlement as soon as possible and typically at least 4 weeks before the fixture. In other words, pursuant to CPR 1.3 the parties should notify the court about the possibility of settlement before the time when they might otherwise be addressing compliance with time limits for the production of bundles and skeletons. There may be some cases where, unusually, there is good reason for not being able to achieve that, but the Westminster case was certainly not one of them .
It was noted that the claimant could have filed a notice of discontinuance under CPR 38.3, but the claimant didn’t because initially at least, it disputed liability for the first defendant’s costs. Where a claim is discontinued pursuant to CPR 38, then unless the court orders otherwise, a claimant who discontinues is liable for the defendant’s costs.
Consequences of failing to follow good practice
The Judgment made the following points:
- Parties who discontinue late in the day and fail to comply with court orders without good reason and explanation may be liable for costs on an indemnity basis.
- The parties may be required to attend a hearing in order to provide a satisfactory explanation to the court. Again, costs consequences may follow.
- In sufficiently serious (and rare) cases the court might decide that it is appropriate to have a hearing, analogous to that which takes place under the Hamid If the hearing in Westminster could be regarded as the naughty step, a Hamid hearing is getting called in to see the Headteacher. In such hearings, lawyers can be required to attend court to formally explain their conduct, supported by evidence and witness statements. They may have to write to the court afterwards to demonstrate that lessons have been learned and implemented. A worst-case scenario is referral by the court to the relevant professional body; see paragraph 72.
This case, and the above consequences shouldn’t dissuade parties from settling claims. Neither should it dissuade parties from withdrawing or settling a claim late in the day where this couldn’t reasonably have been done earlier. However, what the Judgment makes clear is that early and ongoing contact with the court is essential, as is complying with relevant directions. Even if parties think a case might settle, that is not a good enough reason to ignore existing directions; an extension should be sought. Where a case settles late in the day, parties should ensure that the circumstances are fully explained and justified if they are to avoid a court hearing. In such circumstances a jointly agreed submission between the parties would be helpful, even preferable.