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Articles | Mon 6th Jul, 2020
Regular readers will know that we at 1 Chancery Lane are always on the lookout for new ways of getting fit. And so it was that we read with interest that a certain national firm of solicitors planned to introduce twerking classes by Zoom. Alas, no sooner had we donned the 1CL branded spandex in eager anticipation of what we believe is known as a ‘twerk-off’, than the classes were cancelled for lack of interest. We’ve been consoling ourselves for the loss of what would surely have been a sight to strain credulity by reading the European Commission’s rap on the knuckles to those member states who responded proactively to the Great Refund Saga by disapplying or diluting the Package Travel and Denied Boarding Regulations; and by sharpening our pencils in readiness for the courts reopening, albeit at hours when some of us would more traditionally have been found in the pub.
The Latest on returning to Court – All Hands to the Pump with ‘Creative Listing’
The pandemic has dramatically reduced the number of cases that can be dealt with by the courts, and the use of remote hearings and the measures which will need to be implemented to facilitate in person hearings will mean that that problem is likely to continue for some time. No longer can cases be block listed with crowded waiting rooms in the hope that late settlements and failures to attend will allow the list to be completed.
HMCTS have now published a plan for the recovery of courts and tribunals which aims to set out how the phased return to pre Covid-19 capacity will work across the HMCTS estate. The commentary from the Lord Chief Justice and the Vice-President of Tribunals notes that the “Lord Chancellor has agreed that sitting days should be used to their maximum in this period and we should not hesitate in using fee-paid and deputy judges to fill any gaps which cannot be filled by the salaried judiciary. It is now all hands to the pump.”
Significantly, we are told that “Local leadership judges will also be looking to list creatively and to stagger and extend sitting times, with the potential to start hearings at different times of day and to sit at weekends.”
Key points from the plan itself include:
There is precious little detail as to how these measures to increase capacity will work, or exactly what ‘extended opening hours’ will entail, but the potential to have hearings listed at weekends as well as mornings and evenings is plainly problematic, and fails to take account of any number of issues; most obviously those practitioners who have childcare or other caring commitments. Further, no evidence has been provided to explain how much impact on the backlog the significant step of introducing a seven day working week will actually have.
Some comfort can be taken from the strong emphasis which appears to be placed on increasing the efficiency and use of remote hearing technology where appropriate. One of the stated aims of the plan is to increase the use of audio and video technology for more and new types of hearings, subject to the interests of justice.
Whilst regular in person hearings are probably going to have a slow uptake, it looks as though the return to court is likely to be mostly virtual for the next few months. Alternative venues and more judges will provide more capacity which is very positive news, but there is a long way to go before ‘normality’ returns. Perhaps the County Courts can draw inspiration from other divisions; the Business and Property Courts have maintained their administrative performance throughout the pandemic, with no backlog outside of standard turnaround times.
Unfortunately, however, it appears that the potential for parties to have to spend an August Saturday afternoon participating in a video hearing isn’t ruled out.
About the Author
Chris Pask was called in 2013. He undertakes work arising out of contractual disputes, including cases involving sale of goods and supply of services, and in particular claims raising issues of fundamental dishonesty. Chris accepts instructions by way of Direct Public Access.
How common is common sense? Relief from sanctions in a pandemic: Melanie Stanley v The London Borough of Tower Hamlets  EWHC 1622 (QB)
In this case the Claimant intimated a claim seeking damages for “psychological distress, stress, inconvenience and financial loss” flowing from an admitted data breach. The Defendant failed to respond to the Claimant’s pre-action correspondence, but during a telephone conversation on 13th February 2020 a solicitor in the Defendant’s Legal Services Department told the Claimant’s solicitor that the Council would only accept service of proceedings by post.
Particulars of Claim were duly posted to the Defendant’s officers on 25th March 2020 and therefore deemed served on 27th March 2020. As such the Acknowledgment of Service was due by 9th April 2020. On 10th April, with no Acknowledgment having been filed, the Claimant applied for judgment in default, which was granted by Senior Master Fontaine on 17th April 2020.
What could the reason be for the Defendant failing to file their Acknowledgment of Service? Those of you wondering why we’ve all been sat at home for the last three months aren’t going to get the answer. However, the rest of you will have guessed correctly that two days before the Claimant’s solicitor posted the Particulars of Claim the Government put the country into lockdown and passed the Coronavirus Act 2020 that came into effect on 25th March 2020. The effect of the Act and its secondary legislation was that all but essential workers were required to stay at home and that it was a criminal offence to be found outside if you did not fall into one of the relevant exceptions. Accordingly, the Defendant had closed its offices on 23rd March 2020, to all but a skeleton staff, so that no one was present to note the arrival of the Claimant’s Particulars.
The Defendant therefore sought to set the judgment aside. The Claimant, in a fit of tactical brilliance, decided to oppose the application.
To succeed in their application, it was common ground that first the Court had to decide whether one or both limbs of CPR 13.3 were satisfied before then considering whether relief from sanction should be afforded in accordance with the Mitchell/Denton principles.
CPR 13.3 provides the Court with a discretion to set aside a default judgment if:
On 18th June 2020 the matter came before Mr Justice Knowles, who found in favour of the Defendant, set aside the judgment and afforded them relief from sanction.
First the Court was satisfied that the Council had a real prospect of defending the claim on the basis that the Claimant had not served a medical legal report with the Particulars:
“The Claimant will have to rely on the evidence of a medical practitioner if she is going
to establish psychological injury giving rise to actionable loss. At the moment there is
therefore no evidence that the Claimant has suffered any actionable loss as a result of the
Claimant’s alleged unlawful conduct. Without loss, there is no cause of action.”
I do have some difficulty with this element of the judgment, as it ignores that in claims under data protection legislation and for claims of misuse of private information damages can be awarded for injury to feelings, and/or the loss of the right to control one’s own information without the need for medical evidence (see Gulati & Ors v MGN Limited  EWHC 1482). The Claimant’s pleading that her losses consisted of “psychological distress, stress, inconvenience” was, I think, broad enough to encompass an actionable loss that did not need to be proved by reference to medical evidence. However, that point seems not to have been advanced on behalf of the Claimant.
In any event however, even if arguably the Defendant should not have succeeded under the first limb of CPR 13.3(1) (i.e. whether the Defendant had a real prospect of successfully defending the claim) it could still rely on the second limb – that there was another good reason why the judgment should be set aside – notably that the claim was received into the Defendant’s office at the start of the biggest world health emergency in a century, and when no one was present to deal with the claim.
Whilst accepting that the Defendant had not covered themselves in glory in failing to respond to the pre-action correspondence, Knowles J went on to find that the Claimant’s solicitor had exercised “poor judgment” in serving the Defendant by post when “[a] moment’s thought on his part would have shown that it was not fair or reasonable for him simply to place papers in the post to an office that he knew or should have known had been closed down two days before because of a national emergency“. The court was therefore satisfied that there was a good reason to set aside the judgment.
Turning to the question of relief from sanction. It was accepted that the failure to file an acknowledgement of service was serious and significant, but in light of the overall circumstances it was right that the Defendant be afforded relief. In coming to his conclusion Knowles J rightly had regard to CPR PD 51ZA which provides:
“4. In so far as compatible with the proper administration of justice, the court will take into account the impact of the Covid19 pandemic when considering applications for the extension of time for compliance with directions, the adjournment of hearings, and applications for relief from sanctions“.
The Court thought that it would be “unconscionable” for the Claimant to benefit from the “unprecedented health emergency“.
Stanley really is a lesson in the importance of parties exercising proper judgment. The Court was rightly critical of the Claimant’s solicitor’s decision to post the Particulars of Claim to an empty office, but Stanley also highlights the need to properly think about opposition to relief applications from a commercial and tactical standpoint. We should not need to be reminded of what the Master of the Rolls said at [§43] of Denton:
“The court will be more ready in the future to penalise opportunism. The duty of care
owed by a legal representative to his client takes account of the fact that litigants are
required to help the court to further the overriding objective. Representatives should
bear this important obligation to the court in mind when considering whether to advise their clients to adopt an uncooperative attitude in unreasonably refusing to agree extensions of time and in unreasonably opposing applications for relief from sanctions.”
Given that dicta, the best-practice guidance that has been agreed by both APIL and FOIL and in light of CPR PD 51ZA, any decision to oppose an application for relief from sanction is going to have to be thought about very carefully when the underlying breach may be related to the Covid-19 emergency. While the consequences of the pandemic may be receding the importance of commercial awareness and tactical acumen (or common sense) remains as great as ever.
The case also highlights the continuing confusion among many about how damages for the misuse of data are handled by the courts. Whilst it is right that if a Claimant is suggesting that the data breach caused an psychological illness then medical evidence will be required in the normal way, it is not right though to say that a claim for injury to feelings, distress or the loss of the control of the data cannot advance absent a medical report. Indeed, the ability to bring such a claim is the main reason why there is currently so much disquiet among insures about the potential scope of such claims.
About the Author
Ian Clarke was called in 2005. He specialises in professional negligence claims, but also undertakes cross border claims, with a particular emphasis on serious injuries arising out of sporting accidents. The Legal 500 rates him as being ‘very adept at picking up the detail of document-heavy matters very quickly’ and an ‘accessible and level-headed junior’.
EU Commission on collision course with member states over flight and holiday refunds
In recent months this briefing has tracked the storm brewing over airlines and tour operators refusing to comply with EU rules over cancelled flights or holidays; either by providing refunds well outside the prescribed time limits, or by insisting that customers accept vouchers instead.
The crisis faced by the travel and hospitality sector across Europe has led to several countries adopting drastic measures designed to protect businesses from a run on their cash reserves. Italy and Greece in particular have introduced legislation at national level which potentially undercuts consumers’ rights to a prompt cash refund for a cancelled flight or holiday.
On 13th May 2020 the EU Commission published its recommendations (https://ec.europa.eu/info/sites/info/files/recommendation_vouchers_en.pdf) on how vouchers could be made to be more attractive while still upholding EU rules. These recommendations included ensuring vouchers can be applied flexibly to bookings, providing a minimum 12 month expiry period (after which if the voucher is not redeemed, a refund is provided) and inviting member states to guarantee vouchers in the event the provider becomes insolvent.
The Commission has now intervened in the Great Refund Saga directly by launching formal proceedings against member states deemed to have infringed EU rules. Last Thursday (2nd July) the Commission issued ‘letters of formal notice’ to ten member states – including France, Italy and Greece – requiring them to protect consumers’ rights under (among other things) Article 8 of the Denied Boarding Regulations and Article 12(4) of the Package Travel Directive. The letters are the first stage in a process that may end up in a full-scale dispute before the Court of Justice, and in the event a member state is found to have infringed EU law, the court has the power to order corrective action be taken at national level. States may also be issued with fines in the event of continued non-compliance.
We hate to say we told you so, but we did in fact tell you that where member states encouraged or allowed tour operators and airlines to infringe consumers’ rights under the Regulations and Directive, they were laying themselves open to just such action on the part of the Commission.
About the Author
Called in 2010, Tom Collins is ranked in the Legal 500 as a specialist in Travel Law. He has considerable experience across a wide range of travel and private international law disputes and has advised claimants and defendants in multi-party actions.
Did you know that the European Commission maintains a ‘single market scoreboard’ comparing member states’ historic compliance with EU rules? As soon as we found out, we immediately scrambled to look up where we in the UK are placed in what is now known to us as the Scoreboard of Shame. As of 1st December 2019, Spain was the worst offender with 57 infringement cases pending, followed by Italy (49) and Germany (47). The UK came 19th out of 28 member states, with a relatively paltry 33 pending cases. Interestingly, the UK is the second fastest to comply with the judgments of the CJEU (on average the Commission closes cases against the UK 8.6 months after judgment). Austria was by far the slowest, taking over six years to comply, on average. The full statistics are available here.