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A useful relief from sanctions decision where the Applicant had not acted promptly and for arguments directed at the reason for the breach

9th November 2016

GUNARATNAM v AGEAS INSURANCE LIMITED [2016] EWHC 845 (QB)
Relief from sanctions - Unless Orders - promptness - arguments directed at the merits

Case note: A useful relief from sanctions decision where the Applicant had not acted promptly (delay of six-months after breach) and for arguments directed at the reason for the breach (stage 2 of Denton) and the merits of the case.

The Claimant appeared in person at a Case Management Conference (her previous solicitors having come off record). An Unless Order was made allowing four months to serve expert evidence. The Claimant approached a 12 firms of solicitors but all refused to take on the case despite the Claimant having the benefit of public funding. Thus, notwithstanding the extra time to comply, the Claimant breached the order and the claim was struck out. Some six-months later, solicitors were found and an application for releif from sanctions was made. Two days prior to the hearing the Defendant made an open offer on terms that £40,000 would be paid regardless of the success or failure of the application for relief. The Defendant relied upon R (Hysaj) v Home Secretary (CA) [2015] 1 WLR and argued that the Court cannot look at the merits of the quantum claim and, therefore, it was not open to the Court to say that the Claimant would recover more than £40,000. The Deputy Master found that there was a good reason for the breach (stage 2 of Denton) namely that later developments in the litigation (being the continued unsuccessful attempts to find a firm of solicitors willing to take the case) showed that the four-month period was insufficient. Further, the Deputy Master found that the Claimant was likely to beat the £40,000 that was offered. The Defendant appealed. All grounds were dismissed. The case was significant in three regards:

  1. Failure to bring the application promptly (the application having being made some 6-months after the breach) was not a bar to relief being granted.
  2. The passage in Mitchell [at 41] referring to later development can include a continuation of the status quo.
  3. Hysaj was distingushed. Justice Picken, stated that “the rigours of Hysaj should not be applied strictly in a case where liability is admitted”.

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