Litigants will have noted the recent toughening of the judicial approach to compliance with directions and case management orders. However, a High Court decision has underlined that a slavish deference to deadlines can itself cause delay and harm the interests of justice.
The owners and managers of a vessel had claimed $500,000 from marine insurers in respect of damage to the ship’s hull and machinery. The former had been required to lodge £100,000 as security for costs by a particular time and date. That deadline was missed by a matter of hours and, due to that default, the action was automatically stayed.
The insurers had refused a request to lift the stay by consent and the owners and managers were thus constrained to apply to the Court for relief from sanctions. In allowing that application and lifting the stay, the Court described the relevant delay as ‘trivial’ and the insurers’ attitude as ‘unreasonable’.
The Court noted, “The insurers have sought to turn to their tactical advantage a short delay in providing security for costs which, in itself, had no material impact on the efficient conduct of the litigation. They have argued that the consequence of the default should be that the action remains permanently stayed.
“Unlike the default itself, the insurers’ response to it has had a very serious impact on the litigation. The whole timetable for the proceedings has been derailed, significant costs have been incurred and court time has been wasted to the detriment of other court users.” The insurers’ approach had had the very impact which judicial insistence on meeting litigation deadlines had been designed to avoid.
Whilst not under-valuing the need for compliance with rules, practice directions and orders, the Court found that the very brief delay in lodging security for costs had been satisfactorily explained by the owners and managers and was in any event of little or no consequence. In those circumstances, the insurers’ refusal to agree to the stay being lifted was unreasonable.