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31a. Sanctions and unless orders
SITUATIONS WITH NO SANCTION
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Relief from sanctions only required where there is a sanction
"[25] The critical starting point, as the appellant's submissions recognise, is a breach of a rule, practice direction or order. It may seem trite to say that if there has been no breach of a rule, practice direction or order then the relief from sanctions provisions do not apply, but it is worth emphasising. That is because in some contexts it appears that the concept of "relief from sanctions" has been used as a label simply to characterise the tougher approach to case management and compliance which can be found in Mitchell and Denton. That is not right. The courts today do apply an approach to case management in general which is less tolerant of delays than before. The modern approach has a greater emphasis on compliance and the need for efficient conduct of litigation at proportionate cost. There is recognition that the need for efficiency and proportionate cost applies both in the given case and in relation to knock on effects on other cases. The basis in the rules for this general approach, as I mentioned in Lufthansa at [23], is not r3.9 and relief from sanctions, rather it is that the two principles identified are now embedded in the overriding objective (r1.1(2)(e) and (f)) and they play an important part in its application. That is why it can be said that the "ethos" of Denton applies even when r3.9 (relief from sanctions) is not engaged (c.f. FXF paragraph 76)." (Yesss (A) Electrical v. Warren [2024] EWCA Civ 14)
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Application to extend time limit before expiry
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​See also M18: Extending and shortening time limits
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- Not subject to relief from sanctions principles
"[18] I agree with [HMRC] that this is not a relief from sanctions case. Case law shows that the application for an extension of time to take any particular step in litigation is not an application for relief from sanctions provided that the applicant files his application notice before expiry of the permitted time period. Here the original 60 day time period had been extended by agreement until 24 February 2025 (the additional 60 days consensual stay expired on that date as the 60 days strictly expired on 22 February 2025 which was a Saturday, and the tribunal rules provide that the deadline date is the next working day, namely 24 February 2025)." (Lloyd v. HMRC [2025] UKFTT 563 (TC), Judge Popplewell)
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"[15] I first need to decide whether this is an in-time application for an extension of time. The appellant lodged its notice of appeal with the tribunal on 4 November 2022, the tribunal did not notify HMRC of this until 3 February 2023. The 60-day period for filing a statement of case, prescribed by the rules (and confirmed by the tribunal in its letter of 3 February 2023) therefore started on 3 February 2023 and ran until 4 April 2023. The application to extend time was made on 27 March 2023 i.e. before that deadline expired.
[16] I therefore agree with [Counsel for HMRC] that the application to extend time is an in-time application and thus this is not a relief from sanctions case. Instead, I should apply rule 2." (Tresserras v. HMRC [2024] UKFTT 538 (TC), Judge Popplewell)
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​See M18: Extending and shortening time limits
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- Retrospectively no breach if application granted
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"[24] This principle is derived from the decision of Alexander Nissen QC (sitting as a deputy High Court judge) in Everwarm Ltd v BN Rendering Ltd [2019] 4 WLR 107 (“Everwarm”). That case concerned an application for extension of time for compliance with an unless order, where the application was made before the deadline for compliance, but was not heard until after that deadline. In that case, the deputy judge drew a distinction between the applicable tests for determining in-time and out-of-time applications for an extension of time for compliance with an unless order. In short, in-time applications did not engage the principles concerning relief from sanctions (because if granted there had been no breach), whereas out-of-time applications did. The deputy judge decided that the application in question should be treated as an in-time application even though it was not heard until after the unless order would have taken effect. In doing so, the deputy judge confirmed that, if the extension of time was granted, the claim would be treated in retrospect as if it had never been struck out (Everwarm [15]).
[25] Everwarm was a decision on the application of the Civil Procedure Rules. It was common ground between the parties that the principle should apply equally in this case. Both parties also proceeded on the basis that the variation application could only have this retrospective effect if it was made in-time. In other words, the variation application had to have been made before the deadline by which the appeal was automatically struck-out by the Unless Order. But it did not matter if the FTT did not determine that in-time variation application until after that deadline." (Lingajothy v. HMRC [2023] UKUT 63 (TCC), Judge Raghavan and Judge Greenbank)
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- Burden on applicant to prove application was in time
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"[27] [The taxpayer] accepts that the appellant bears the burden of proof of showing the application was in-time[1]. He submits that it was an error for the FTT not to make a clear finding on the time at which the variation application was made." (Lingajothy v. HMRC [2023] UKUT 63 (TCC), Judge Raghavan and Judge Greenbank)
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FTT'S POWERS TO IMPOSE SANCTIONS
“(2) If a party has failed to comply with a requirement in these Rules, a practice direction or a direction, the Tribunal may take such action as it considers just, which may include--
(a) waiving the requirement;
(b) requiring the failure to be remedied;
(c) exercising its power under rule 8 (striking out a party's case);
(d) restricting a party's participation in proceedings; or
(e) exercising its power under paragraph (3).” (FTT Rules, r.7(2)).
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- Restricting participation
“Taking all the circumstances into account we are satisfied that it would be just and fair to refuse the Respondents’ application to amend their case and to rely on the Supplementary Report. Further we are satisfied that the Respondents should be barred from cross examining the Appellant’s expert witness and from making submissions on the Appellant’s case in relation to the Nano Products. We would have been minded to summarily allow the appeal in relation to the Nano Products but it is not clear to us that we have such jurisdiction.” (Moreton Alarm Services (MAS) Ltd v. HMRC [2016] UKFTT 192 (TC), §70 – HMRC attempted to contest a part of the Appellant’s case that it not indicated it contested in its SoC).
“Rule 7(2)(d) may be directed at some more limited form of restriction on participation in the proceedings falling short of striking out. Alternatively, at some exceptional circumstances which do not for some reason fall within the ambit of Rule 8.” (Elder v. HMRC [2014] UKFTT 729 (TC), §83)
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FTT’s power to refer to the UT
“(3) The Tribunal may refer to the Upper Tribunal, and ask the Upper Tribunal to exercise its power under section 25 of the 2007 Act (Upper Tribunal to have powers of High Court or Court of Session) in relation to, any failure by a person to comply with a requirement imposed by the Tribunal--
(a) to attend at any place for the purpose of giving evidence;
(b) otherwise to make themselves available to give evidence;
(c) to swear an oath in connection with the giving of evidence;
(d) to give evidence as a witness;
(e) to produce a document; or
(f) to facilitate the inspection of a document or any other thing (including any premises).” (FTT Rules, r.7(3)).
- Power only arises if there has been a failure to comply with a direction
“Rule 7 only gives the Tribunal power to refer persons who have failed to comply with a direction or summons.” (Clavis Liberty Fund 1 LP [2014] UKFTT 1077 (TC), §42)
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- Direction must have been validly issued
“If the Tribunal had no jurisdiction to issue the summons or direction then it is ineffective and there is no failure to comply with it; in any event Rule 7 was clearly only intended to apply to directions and summons which the FTT had power to issue.” (Clavis Liberty Fund 1 LP [2014] UKFTT 1077 (TC), §42)
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UNLESS ORDERS
- No express right to be heard before unless direction issued
“[44] Nor, as noted above, do the parties have any express right to be heard before the tribunal either makes the direction or exercises its power to strike out for non-compliance pursuant to rule 8(1) (a mandatory power) or rule 8(3)(a) (a discretionary power). This is in contrast to the position where a barring order is made under rules 8(2), (3)(b) or (3)(c), where the tribunal is obliged to give the parties an opportunity to be heard prior to making an order striking out or barring: rule 8(4).
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[103] It is, moreover, always open to any party who feels that further consideration is required to apply under rule 6(5) for a direction to be varied or suspended. In so far as the Revenue’s case suggests that the two directions and the order should not have been made without notice to the parties, who could then have sought to make representations to the tribunal, we think that it is an example of adding an impermissible gloss to the plain meaning of the rules themselves, and would risk giving rise to the kind of over-refinement to which we have referred.
[104] We do not overlook the observation of Moore-Blick LJ in Marcan Shipping that he would “find it difficult to imagine circumstances in which [an ‘unless’] order could properly be made for what were described in Keen Phillips v Field as ‘good housekeeping purposes’ ”. The position at which this appeal had arrived by the making of the first direction on 18 March 2013 was significantly out of order and the tribunal was fully entitled, in the circumstances of more than two years of extensions of time having been allowed, to exercise its powers under rule 5 to ensure that the delay in proceeding with the appeal did not continue. Nor can it be argued that the time then allowed for the directions to be complied with was too short, and indeed no submission to that effect has been made.
[105] We do not see that the contested directions could fairly be characterised merely as ‘good housekeeping’: there is a public interest in the efficient and timeous resolution of disputes and it is proper for the tribunal by its case management decisions to have regard to that. The delay in this case had become unacceptable and, in the absence of an application to vary the directions, any objection to their being made without notice cannot be sustained.” (Compass Contract Services UK Ltd v. HMRC [2014] UKFTT 403 (TC), Judge Cornwell-Kelly)
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- Tribunal should carefully consider appropriateness of sanction before imposing unless order
“[36]…before making conditional orders, particularly orders for the striking out of statements of case or the dismissal of claims or counterclaims, the judge should consider carefully whether the sanction being imposed is appropriate in all the circumstances of the case. Of course, it is impossible to foresee the nature and effect of every possible breach and the party in default can always apply for relief, but a conditional order striking out a statement of case or dismissing the claim or counterclaim is one of the most powerful weapons in the court's case management armoury and should not be deployed unless its consequences can be justified. I find it difficult to imagine circumstances in which such an order could properly be made for what were described in Keen Phillips v Field as “good housekeeping purposes”.” (Marcan Shipping (London) Ltd v. Kefalas [2007] EWCA Civ 463)
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​"[31]...As the courts have emphasised, the court's power to strike out a statement of case is one of the most powerful weapons in the court's case management armoury, and should only be deployed as a sanction of last resort. It is likely only to be imposed for a serious and deliberate breach, and the court must consider very carefully whether it is appropriate, proportionate and justified in all the circumstances of the case: Marcan Shipping v Kefalas [2007] EWCA Civ 463, [2007] 1 WLR 1864, §36; Walsham Chalet Park v Tallington Lakes [2014] EWCA Civ 1607, §44; Michael Wilson v Sinclair [2015] EWCA Civ 774, §34; Byers v Samba [2020] EWHC 853 (Ch), §120.
[32] When assessing the overall proportionality and justification for a debarring order, the court will have regard to all of the circumstances of the case. Particular factors to consider will include the seriousness of the breach, the extent to which it is excusable and the consequences of the breach: Byers v Samba, §123." (WWRT Limited v. Tyshchenko [2023] EWHC 907 (Ch), Bacon J)
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[47] Two other things trouble me. The first is a point which I have made on a number of occasions, namely Marcan Shipping and the fact that the sanction would follow automatically, which is uncomfortable when one has in mind that potential for difficulties. The second is the fact that what is being sought - and I pressed Mr McCombe on this last time -is only the "nuclear option" of striking out the claim. No lesser sanction is sought. So it is not a case where what is being sought is a condition which leads to, for example, debarring the Second Claimant from relying on any disclosure or so forth. This is the nuclear option in terms of conditions.
[48] In those circumstances, while it is a situation where it is quite close to being one where I would grant an unless order, as a matter of the exercise of my direction I do consider that doing so in these circumstances against this background would be disproportionate and inappropriate. I hear what Mr McCombe says about the benefits of putting the onus on the Second Claimant, and I certainly have sympathy with his point; but for all that in my estimation where there is no longer an unrepentant breach (unlike Global Torch) and where there are these very particular circumstances offering obvious potential for difficulties not of the Second Claimant's making, the balance tilts away from an unless order.
[49] So in those circumstances I am not going to make the order on an unless basis. I do not accept Mr McCombe's submission that Global Toch binds me to imposing a sanction. What was said there was that a sanction is almost inevitable and that "if persistence in the disobedience would lead to an unfair trial, it seems, at least in the absence of special circumstances, hard to quarrel with a sanction which prevents the party in breach from presenting … the claim". It does not suggest that, even then, failure to impose the sanction would be wrong; and it explicitly contemplates (i) persistent disobedience and (ii) no special circumstances." (Al-Subaihi v. Al-Sanea [2020] EWHC 3206 (Comm), Cockerill J)
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"[49] The Court of Appeal has repeatedly emphasised the very great care that needs to be taken by a court before it decides to impose an ‘unless’ order for the striking out of a party’s case, having regard to the grave consequences of non-compliance. An ‘unless order’ or ‘conditional order’ striking out a statement of case was described by Ward LJ as an “atomic weapon in judicial armoury”: Hytec Information Ltd v Coventry City Council [1997] WLR 1666 at 1676D." (Compass Contract Services UK Ltd v. HMRC [2014] UKFTT 403 (TC))
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- Persistent disobedience justifying unless order
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"[23] ...The importance of litigants obeying orders of court is self-evident. Once a court order is disobeyed, the imposition of a sanction is almost always inevitable if court orders are to continue to enjoy the respect which they ought to have. And, if persistence in the disobedience would lead to an unfair trial, it seems, at least in the absence of special circumstances, hard to quarrel with a sanction which prevents the party in breach from presenting (in the case of a claimant) or resisting (in the case of a defendant) the claim. And, if the disobedience continues notwithstanding the imposition of a sanction, the enforcement of the sanction is almost inevitable, essentially for the same reasons. Of course, in a particular case, the court may be persuaded by special factors to reconsider the original order, or the imposition or enforcement of the sanction.
[24] In the present case, essentially for the reasons given by the three judges in their respective judgments, there do not appear to be any special factors (subject to what I say in the next two sections of this judgment). Further, it is difficult to have much sympathy with a litigant who has failed to comply with an unless order, when the original order was in standard terms, the litigant has been given every opportunity to comply with it, he has failed to come up with a convincing explanation as to why he has not done so, and it was he, albeit through a company of which he is a major shareholder, who invoked the jurisdiction of the court in the first place." (Al Saud v. Apex Global Management Ltd [2014] UKSC 64)
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"[66] In this case the Unless Order was made in the context of HMRC being in repeated breach of the Agreed Directions." (Ebuyer (UK) Limited v. HMRC [2023] UKFTT 611 (TC), Judge Bowler)
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- Usually only made against a party already in breach
"[37] In my view the reference in the first sentence of that paragraph to "unrelated failures" is a reference to earlier breaches of rules or orders which the applicant has committed during the course of the litigation. At stage 1 it is not legitimate to say "this breach is trivial but, set against X's history of failures and delays, this breach is the last straw. It becomes a serious matter." At stage 1 the court must ignore X's historic breaches and assess the breach in respect of which X is seeking relief.
[38] An "unless" order, however, does not stand on its own. The court usually only makes an unless order against a party which is already in breach. The unless order gives that party additional time for compliance with the original obligation and specifies an automatic sanction in default of compliance. It is not possible to look at an unless order in isolation. A party who fails to comply with an unless order is normally in breach of an original order or rule as well as the unless order.
[39] In order to assess the seriousness and significance of a breach of an unless order, it is necessary also to look at the underlying breach. The court must look at what X failed to do in the first place, when assessing X's failure to take advantage of the second chance which he was given.
[40] In my view the phrase "the very breach" in paragraph 27 of Denton, when applied to an unless order, means this: the failure to carry out the obligation which was (a) imposed by the original order or rule and (b) extended by the unless order.
[41] The very fact that X has failed to comply with an unless order (as opposed to an 'ordinary' order) is undoubtedly a pointer towards seriousness and significance. This is for two reasons. First, X is in breach of two successive obligations to do the same thing. Secondly, the court has underlined the importance of doing that thing by specifying an automatic sanction in default (in this case the Draconian sanction of strike out)." (Oak Cash & Carry Limited v. British Gas Trading Limited [2016] EWCA Civ 153, Jackson, King, Lindblom LJ)
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- Failure to comply with an order for further and better particulars
"[25] HMRC invited the Tribunal to strike out the Appellant's appeal because of its serious failure to comply with the FBP Direction, which it suggested fell within rule 8(3)(b) of the Tribunal Rules. Whilst the Appellant has clearly failed to cooperate with the Tribunal, I am not satisfied that the Appellant's behaviour means that the Tribunal cannot deal with the case fairly or justly. In order to enable the Tribunal to deal with the Variation Application (which, we should remember, is the Appellant's application, not HMRC's), the Appellant must comply with the FBP Direction, so that HMRC can decide what position it wishes to take in relation to the Variation Application and the Tribunal can then decide whether the proposed grounds of appeal have a reasonable prospect of success and whether (and to what extent) the Variation Application should be allowed. Accordingly, I propose to make an "unless" order, under which the Variation Application will be struck out automatically unless the Appellant has complied with the FBP Direction in full (including the parts which are more relevant to the Stay Application, even though I have dismissed that) within 14 days (the time the Tribunal originally gave for complying with the FBP Direction) of the release of this decision.
[26] I would just remind the Appellant that this is its last chance to comply with the FBP Direction and its response to the FBP Direction must set out its position/answers comprehensively (even if it considers it is making a point which is obvious or which it considers it has touched on before) and clearly, so that there can be absolutely no doubt at all about its position, and so that HMRC and the Tribunal can decide whether it has a real chance of success with its proposed amended grounds of appeal." (Scrimshaw Wealth Management Limited v. HMRC [2024] UKFTT 637 (TC), Judge Baldwin)
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- Unless orders operate automatically
“[34] In my view it should now be clearly recognised that the sanction embodied in an “unless” order in traditional form takes effect without the need for any further order if the party to whom it is addressed fails to comply with it in any material respect. This has a number of consequences, to three of which I think it is worth drawing particular attention. The first is that it is unnecessary, and indeed inappropriate, for a party who seeks to rely on non-compliance with an order of that kind to make an application to the court for the sanction to be imposed or, as the judge put it, “activated”. The sanction prescribed by the order takes effect automatically as a result of the failure to comply with its terms.” (Marcan Shipping (London) Ltd v. Kefalas [2007] EWCA Civ 463)
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- Party in default must apply for relief
“The second consequence [of an unless order], which follows from the first [see above], is that the party in default must apply for relief from the sanction under rule 3.8 if he wishes to escape its consequences.” (Marcan Shipping (London) Ltd v. Kefalas [2007] EWCA Civ 463, §35)
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IMPLIED SANCTIONS
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Not every breach of a rule or direction has a sanction
"[29] In relation to implied sanctions counsel referred to the judgment of Martin Spencer J in Mark v Universal Coatings & Services [2019] 1 WLR 2376 (QB). In that case the judge (at [54]) made the point that the fact a provision breached used the word "must" does not mean there must be a sanction for non-compliance. I agreed with this in Lufthansa at [22] and still do. Putting it another way, not every rule, PD or order made or applicable in the civil justice system, even if it is couched in mandatory terms, has or needs to have a sanction already built in somewhere in the rules (or PDs or anywhere else) which is triggered when that provision is breached." (Yesss (A) Electrical v. Warren [2024] EWCA Civ 14)
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- Modulated approach to case management
"[35] Some might misunderstand this reasoning as a signal of some kind of rowing back from the modern approach to timeliness and procedural compliance. Not so. The structure of the rules, PDs and for that matter the directions orders made by judges all the time, are aimed at taking a modulated approach to case management. Mandatory provisions in orders, rules and PDs are meant to be adhered to. Full stop. The point is that the system can and does accommodate a scheme in which some provisions have sanctions for breach expressly provided for, and others do not." (Yesss (A) Electrical v. Warren [2024] EWCA Civ 14)
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- Three types of case
"[59] I hope that I have now dealt with all the truly relevant authorities. I have done so at some length, because they show a difference of approach that requires resolution by this court. As Birss LJ explained in argument, there are really three categories of case: (i) cases where the rule or order expressly provides for the sanction that will apply on non-compliance (e.g. failure to file witness statements on time), (ii) cases where the rule does not expressly state the sanction which applies for non-compliance, but permission of the court is needed to proceed (e.g. failure to file a notice of appeal on time), and (iii) cases where a further step is taken in consequence of the non-compliance, such as the entry of a default judgment (as in this case) or the striking out of a claim for non-attendance at trial." (FXF v. English Karate Federation Limited [2023] EWCA Civ 891)
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Situation 1: no express sanction but permission of court needed to proceed
"[29] In relation to implied sanctions counsel referred to the judgment of Martin Spencer J in Mark v Universal Coatings & Services [2019] 1 WLR 2376 (QB). In that case the judge (at [54]) made the point that the fact a provision breached used the word "must" does not mean there must be a sanction for non-compliance. I agreed with this in Lufthansa at [22] and still do. Putting it another way, not every rule, PD or order made or applicable in the civil justice system, even if it is couched in mandatory terms, has or needs to have a sanction already built in somewhere in the rules (or PDs or anywhere else) which is triggered when that provision is breached." (Yesss (A) Electrical v. Warren [2024] EWCA Civ 14)
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- Not every requirement for permission is imposed as a sanction
"[34] I would also add this, just because a rule, PD or order provides that a party needs permission to take a step, does not mean that that need for permission has been imposed as a sanction for breach of something. There are cases in which a permission requirement has indeed been imposed as an sanction – such as r32.10 as it applies to witness statements - but there are other cases in which the need for permission under the rules is plainly not there as a sanction for breach. An example which springs to mind is the general requirement for permission to amend statements of case." (Yesss (A) Electrical v. Warren [2024] EWCA Civ 14)
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- Permission to amend statement of case is not a sanction
"[34] I would also add this, just because a rule, PD or order provides that a party needs permission to take a step, does not mean that that need for permission has been imposed as a sanction for breach of something. There are cases in which a permission requirement has indeed been imposed as an sanction – such as r32.10 as it applies to witness statements - but there are other cases in which the need for permission under the rules is plainly not there as a sanction for breach. An example which springs to mind is the general requirement for permission to amend statements of case." (Yesss (A) Electrical v. Warren [2024] EWCA Civ 14)
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- Permission to rely on expert evidence not a sanction
"[44] The question then is whether r35.4 is a sanction for the breaches identified. In my judgment it is not. The fact that the claimant needs permission under r35.4 to call the pain management expert is not a consequence imposed for a breach of a rule, PD or order. The requirement for permission is imposed by the rules to control expert evidence. Parties always need that permission. The court's role in controlling expert evidence is a more searching one than in relation to fact evidence and r35.4 plays a key role in that control. But it is not there to impose a sanction for non-compliance and I accept the respondent's submission to that effect.
[45] The point is best illustrated by noting that the claimant would have needed the same permission at the first CCMC even if he had complied with the allocation order and brought the pain management expert's dates to that hearing.
[46] In truth the rules, PD and orders relied on represent paradigm examples of provisions for which there is no built in sanction for non-compliance. The non-compliance may lead to negative consequences (so in T (Child) v Imperial College Healthcare Trust the very late evidence was not admitted) but that is not because of the application of CPR r3.9." (Yesss (A) Electrical v. Warren [2024] EWCA Civ 14)
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- Supplemental expert report that reopens the existing issue v. raises a new issue
"[32] At this stage I will mention the matter which came before Arnold J as he then was in Global Energy (see [31] to [33]). That was an application to adduce a supplemental expert's report beyond the date fixed for directions, which report sought to reopen an approach to valuation which was no longer open to the party as a result of previous findings (see [29] and [30]). The application was dismissed. The question was whether the application was covered by CPR r3.9 or not. The judge held on the facts that the relief from sanctions analysis in Denton was either directly applicable or was highly material to the circumstances ([31]). Then at [32] he held that the answer to whether the relief from sanctions approach applied depended on the circumstances of the application, so the actual supplemental report meant the application was for relief from sanctions because it sought to reopen a decided issue, whereas if the supplemental report had been different and had sought to raise new points which only arose after an earlier expert's report, then the relief from sanctions approach was not applicable. I agree with Arnold J about the outcome, but in my judgment the way to answer the question posed about whether relief from sanctions is applicable is the approach described above. Rule 3.9 either applies or it does not and if not then the application will be governed by the modern approach to the overriding objective, which will in appropriate circumstances bring in the "ethos" of Denton. The distinction between different factual circumstances identified in the judgment may carry weight relevant to the outcome either way but is not relevant to whether r3.9 applies or not." (Yesss (A) Electrical v. Warren [2024] EWCA Civ 14)
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- Failure to serve an expert report that brought proceedings to a halt
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"[43] In my judgment Judge Platts was correct to treat this as a case in which the order of Judge Pelling by implication imposed a sanction for non-compliance, here the inability to proceed with the claim for compensation under the cross-undertaking. That was the approach taken by this court in Altomart Limited v Salford Estates (No 2) Limited [2015] CP Rep 8, [2014] EWCA Civ 1408 which concerned an application for an extension of time in which to file a Respondent's Notice, and Hysaj, above, which concerned an application for an extension of time within which to file a Notice of Appeal. The tide is flowing strongly in that direction, and towards a less indulgent approach to non-compliance." (Elliott v. Stobart Group Limited [2015] EWCA Civ 449, Tomlinson LJ)
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Failure to make strike out application by specified time: no implied sanction
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"[28]...Having considered his submissions I am satisfied that the order did not contain an implied sanction and there is no requirement to consider the first defendant's application to extend time for issuing and serving the application with their evidence against the backdrop of the relief from sanctions regime as is required in some circumstances. It seems to me that the order amounted to no more than routine case management. It would have been open to the court to have imposed an express sanction but in the absence of the order there is no basis for importing a sanction that does not arise by way of necessary implication or because it is obvious. Indeed, the court should not be over-inclined to import that sanctions regime unless it is clear that this is what was intended." (DJurberg v. London Borough of Richmond [2019] EWHC 3342 (Ch), Chief Master Marsh)
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Failure to serve medical report and schedule of loss with particulars of claim: no implied sanction
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[53] However, in my judgment the failure to serve a medical report and/or a schedule of loss with the Particulars of Claim is not in the same category [as failure to file a notice of appeal on time], for the reasons which I have endeavoured to set out in paragraph 49 above. Often, within the context of the particular litigation, this will be a trivial breach because compliance can be achieved with the service of documents which, in the end, are relatively uninformative and do not take the matter any further." (Mark v. Universal Coatings & Services Limited [2018] EWHC 3206 (QB), Martin Spencer J)
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- Extension of time to file notice of appeal is request for relief from sanction
"[60] The law as stated in Denton applies directly to the first category of case. Sayers, Altomart and Hysaj make clear that, despite Matthews, applications for extensions of time to file a notice of appeal (an instance of so-called "implied sanctions") should be approached in the same way as applications for relief from sanctions and should attract the same rigorous approach..." (FXF v. English Karate Federation Limited [2023] EWCA Civ 891)
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"[36]...As the authorities demonstrate, for the past twelve years it has been consistently understood that in Sayers v Clarke Walker this court deliberately equated applications for extensions of time for filing a notice of appeal with applications for relief from sanctions because in its view the implied sanction of the loss of the right to pursue an appeal meant that the two were analogous. Following the decision in Mitchell the courts have continued to proceed on the basis that applications for extensions of time for filing a notice of appeal should be approached in the same way as applications for relief from sanctions under CPR 3.9 and should attract the same rigorous approach. It might even be said that the decision in Mitchell has provided an independent basis for a similar approach to applications of that kind. The clearest example is perhaps to be found in Baho v Meerza, to which I have already referred. Whatever one may think of the doctrine of implied sanctions, therefore, particularly in the light of the views expressed by the Privy Council in Matthews, I think that the approach to be taken to applications of the kind now under consideration is now too well established to be overturned. It follows that in my view the principles to be derived from Mitchell and Denton do apply to these applications." (R (Hysaj) v Secretary of State for the Home Department [2014] EWCA Civ 1633)
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“It is agreed before me that the requirement to transmit the case stated to the High Court within 30 days of receiving it is a jurisdictional requirement.” (Woodpecker Ltd v. HMRC [2009] EWHC 3443 (Ch), §24 – relating to the former procedure of asking the General Commissioners to state a case for the opinion of the High Court).
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Situation 2: some further step take in consequence of breach
"[59] I hope that I have now dealt with all the truly relevant authorities. I have done so at some length, because they show a difference of approach that requires resolution by this court. As Birss LJ explained in argument, there are really three categories of case: (i) cases where the rule or order expressly provides for the sanction that will apply on non-compliance (e.g. failure to file witness statements on time), (ii) cases where the rule does not expressly state the sanction which applies for non-compliance, but permission of the court is needed to proceed (e.g. failure to file a notice of appeal on time), and (iii) cases where a further step is taken in consequence of the non-compliance, such as the entry of a default judgment (as in this case) or the striking out of a claim for non-attendance at trial." (FXF v. English Karate Federation Limited [2023] EWCA Civ 891)
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- Application to set aside default judgment
"[63] In my judgment, the Denton tests do, as I have said, apply to applications to set aside default judgments under CPR Part 13.3. There are a number of reasons for this." (FXF v. English Karate Federation Limited [2023] EWCA Civ 891)
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Other situations: generally no implied sanctions
"[30] However the judgment in Mark v Universal Coatings & Services also sought at [52] to identify the difference between the circumstances when a breach with no express sanction might attract an implied sanction, and those when a breach did not attract any sanction at all. The conclusion was that the answer depended on the significance of the circumstances the applicant found themselves in for the purposes of the litigation. While I sympathise with the attempt to identify a principled distinction to explain the cases in which implied sanctions have been identified, I cannot agree with that approach. It is too uncertain. I should say that I do agree with the judge that the degree of importance of breaches of all the rules, PDs and case management orders made by judges is variable. That is why in some cases sanctions are provided for (expressly) and in other cases they are not. Where I part company is in using that measure as a way of identifying unexpressed implied sanctions.
[31] Bearing in mind the importance of clarity in the procedural framework to be followed by court users, the hurdle for identifying something as an unexpressed but implicit sanction must be a high one. It has been identified in the two circumstances mentioned in the cases above. I prefer to say that the scope for identifying any further implied sanctions over and above these two must be very narrow. Bearing in mind that the Denton "ethos" may apply even when r3.9 is not engaged, the need for further extensions of this concept is likely to be very limited.
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[33] In summary, in my judgment, the general approach to working out whether a case is covered by r3.9 is to start by identifying if a rule, PD or order has been breached. If there is none then the rule does not apply. If there has been a breach then the next task is to identify any sanction for that breach which is expressly provided for in the rules, PDs or in any order. If there is no such express sanction then, outside the third category identified in FXF and the specific recognised instances of implied sanctions identified in Sayers, and Altomart (i.e. notices of appeal and respondent's notices), there is no relevant sanction for the purposes of r3.9, and so that rule does not apply. Only if there is both a breach and a sanction does r3.9 apply. It is worth noting that these circumstances are all concerned with sanctions which take effect as a result of a breach without further intervention. The court can always decide later to impose a sanction for a breach, such as a fresh order expressed as an unless order or an order for costs thrown away, but for either of those things to happen, a fresh decision would been needed." (Yesss (A) Electrical v. Warren [2024] EWCA Civ 14)
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BREACHES WITH NO AUTOMATIC SANCTION
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- Warning in directions that failure to comply may lead to strike out does not impose sanction
"[36] Turning to the facts of this case, I start with the allocation order of 3 August 2020. It contains a rubric warning parties that they must comply with it otherwise their case is liable to be struck out or have some other sanction imposed. That is a salutary warning however it does not provide that the strike out or other sanction will happen automatically on breach of the order, and counsel did not suggest otherwise." (Yesss (A) Electrical v. Warren [2024] EWCA Civ 14)
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- Apply the overriding objective
"[36] For these reasons I conclude that no automatic consequence is provided for breach of an Island Records order, either expressly or by implication, by any rule, PD (or order). No relief from sanctions already in existence is required. Panasonic in particular does not have to persuade the court to disapply a sanction in place, whose prior imposition could not be said to have been disproportionate. The court has to apply the overriding objective." (Lufthansa Technik AG v. Panasonic Avionics Corporation [2023] EWCA Civ 1273)
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- Still consider the seriousness of the breach, reasons for it and consequences
"[48] To recap, on ground 2 the appellant submits that even if r3.9 does not apply so that the case is to be approached as one under the overriding objective, it was plainly wrong to allow in this expert evidence in the circumstances as they were. The reasons why have been summarised above already. Even more briefly, the respondent ought to have raised this at the original CCMC, and I have accepted the submission that the failure to do so was a breach of the allocation order, and the later failure was a breach of the CCMC order as well. The delay is very serious, even if it is a late application rather than a very late application.
[49] The case is very near the line, and many judges might well have refused the application, particularly bearing in mind the modern emphasis on compliance and the need for efficient conduct of litigation at proportionate cost (overriding objective r1.1(2)(e) and (f)). However I cannot hold that it was outside the wide case management discretion of the judge in this case. The judge clearly understood all the points which really mattered: the lateness of the application, the fact that it should have been raised at the original CCMC, and the fact that the only explanation why it had not been raised at the CCMC was the change in the file handler. However the critical factor, which the judge also had well in mind, was that at the time at which the judge's decision was being made there was no trial listed. Allowing the application would not vacate a trial or disrupt any extant lists. It would mean the case came on for trial later than it might have done but the judge understood that. A curiosity in the judgment is that it contemplates the possibility of refixing the trial for December 2022 after the new evidence is admitted (paragraph [12]) but the judge's order clearly provides directions for a new CCMC the following January 2023." (Yesss (A) Electrical v. Warren [2024] EWCA Civ 14)
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"[38] Even though this is not an application for relief from sanctions, it is still useful to consider the seriousness and/or significance of the breach, and the reasons for it, when looking at all the relevant circumstances and applying the overriding objective. The breach in this case was plainly a serious one and significant in its consequences, simply owing to the magnitude of the relative difference between the profit to be derived from Mr Varner's statement and the $30 million lower profit to be derived from the figures in Mr Takahashi's statement. The absolute amount is large but even though the details are confidential one can also see given the revenue was about $165 million, that the change is large in relative terms. It is manifest that such a large error in Island Records information means that there is, at its lowest, a question mark over whether the claimant would wish to reconsider its election. The seriousness of the breach is compounded by the fact noted by the judge that the wrong information was caused by the prior breach of the order in that Mr Varner was not a director. As the judge also identified (paragraph 76) the fact it took so long to be corrected compounds the negative consequences of the breach.
[39] If this breach had never happened or had been corrected promptly and in any case before Lufthansa's election in September 2022, then it would not have led to a hearing in the High Court and on appeal. That alone shows that Panasonic's non-compliance with the court's order has had an impact on other litigants and the administration of justice.
[40] Another factor in terms of consequences is whether the breach puts the trial date in jeopardy. Lufthansa submitted that if on ground 1 of the appeal, the court finds that the matter has to be considered afresh not as an application for relief from sanctions, then since this was a new point taken on appeal, the reference point for considering circumstances should be now rather than looking from the time of the judgment. Lufthansa then submits that if it re-makes its election and chooses to go for an enquiry rather than an account, then that puts the trial date in October 2024 in jeopardy. I accept the proposition that in these circumstances the fair reference point to consider is now, but I am not persuaded that this trial date would be imperilled if Lufthansa did elect for an enquiry as to damages instead. There is no evidence directed specifically to that point before us. In any event the idea that an enquiry of this kind could not be brought to a trial in the Patents Court in a year is, to put it politely, unconvincing. The parties have highly experienced legal teams of counsel and solicitors. Even if the matter had to be done from a standing start, which it does not, it could be done."​ (Lufthansa Technik AG v. Panasonic Avionics Corporation [2023] EWCA Civ 1273)
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- Major difference is at the overall balancing stage re what order, if any, to make
"[42] Turning to the balance, this is where the major difference between this application and one for relief from sanctions arises. No consequential provision is currently in place which may or may not be disapplied. The court has a free hand to make whatever order is appropriate in the circumstances, being a proportionate response to the breach which has occurred. If no order is made then there is nothing to prevent Panasonic from advancing a case at the trial of the account which involves all the costs and deductions shown in Mr Takahashi's statement. Panasonic does not need the court's permission at this stage to do that. That does not mean that the court does not have a wide range of powers to exercise, including I suppose the power to remove an issue from consideration, but whether that would be an appropriate response in these circumstances is a very different matter.
[43] The obvious proportionate response is simply that Lufthansa should have the chance to remake its election in the light of the new information (that information being permitted to come in via Mr Takahashi's statement), potentially with costs consequences which I address below. Despite the time that has passed, the proceedings are in fact still at an early stage. There is time between now and trial to accommodate a change in the election if Lufthansa sees fit. Moreover there was even more time to accommodate this when Lufthansa were first offered the chance to re-elect, in January 2023. That offer was rightly made by Panasonic and the fact Lufthansa turned it down is itself a relevant factor." (Lufthansa Technik AG v. Panasonic Avionics Corporation [2023] EWCA Civ 1273)
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