Practice Direction 57AC: Case update

Our previous article on judicial guidance regarding Practice Direction 57AC was only published earlier this month here. Since then, another High Court case providing further guidance – Prime London Holdings 11 Limited v Thurloe Lodge Limited [2022] EWHC 79 (Ch) (“Prime London”) – has been handed down.

In Prime London, the offending witness statement was plainly non-compliant with Practice Direction 57AC. On its face, it omitted the witness confirmation (required by paragraph 4.1) and the solicitor’s certificate of compliance (required by paragraph 4.3). Upon scrutiny, its contents also failed to conform with various aspects prescribed by the Practice Direction.

The chronology is important. The trial was listed in a window beginning 11 January 2022. The key aspects of the history are these:

  • 17 December 2021, the Defendant served the non-compliant witness statement.
  • 4 January 2022, the Claimant first objected to the non-compliant witness statement. The Claimant asked the Court not to read the witness statement but without identifying the alleged non-compliance and told the Defendant it was asking this of the Court.
  • 7 January 2022 the Defendant responded to the Claimant’s complaints by, as the Judge described it, “brushing off the concerns raised”.
  • 10 January 2022, the Claimant provided a draft application effectively for the witness statement to be struck out but not particularising the non-compliance.
  • The Parties attempted from about 7 January 2022 to agree a solution. The Claimant explained some (but not all) of its complaints. The Defendant offered a revised witness statement, but the Claimant only agreed to accept certain paragraphs of this revised version.
  • Shortly before the trial started on 14 January 2022, the Claimant lodged its application and on or about 13 January 2022, the Defendant issued an application for relief from sanctions.

The Judge found fault with both parties in how they dealt with this matter. The Defendant’s explanation that confusion had arisen from the wording of a Consent Order was lambasted as “not much of an excuse”. However, the Claimant’s delay in raising the matter and particularising its complaints – which was attributed to the vacation period – was also criticised because its well-resourced solicitors “should have been able to arrange cover so that the matter was spotted and dealt with earlier”.

In deciding how to deal with the applications, the learned Judge drew heavily on the earlier authorities of Mansion Place and Blue Manchester, covered in our previous article on Practice Direction 57AC here.  The Defendant was allowed to rely on some (but not all) of its revised witness statement and the Judge gave directions in relation to further redactions. The Judge:

  • agreed with Blue Manchester that the striking out of a witness statement is “a very significant sanction which should be saved for the most serious cases”.
  • as in Blue Manchesterallowed some (but not all) of the Defendant’s proferred revised witness statement because: “[it] includes a useful core of compliant material and … the failures by the Defendant in relation to the content of the Original Witness Statement were not particularly egregious in their non-compliance.
  • confirmed that the Court has a wide range of sanctions to choose from.
  • adopted the same approach as in Mansion Place and Blue Manchester by considering how to sanction the original non-compliance with the Practice Direction, rather than by applying the sanction of striking it out and then considering under the Denton principles whether to grant relief.
  • indicated that he was minded to order indemnity costs against the Defendant to mark its role as the party most at fault.
  • specifically warned that his decision “should not be seen as providing any carte blanche to parties to play fast and loose with the Practice Direction, and to leave it to the court to produce a compliant witness statement.

In light of Prime London and the preceding authorities, the message appears to be clear. Parties are expected to cooperate promptly and closely to resolve any non-compliance. If the Court has to step in, it has broad powers available to resolve the dispute and punish non-compliance with Practice Direction 57AC. It will not hesitate to apply sanctions (albeit proportionately) in indemnity costs to mark the court’s disapproval.