England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE LUTON COUNTY COURT
DISTRICT JUDGE WILDING
8LU01623

		Royal Courts of Justice Strand, London, WC2A 2LL
		26/04/2012

Lord Justice Rix:

1. This is an appeal about the powers of the court to "vary or revoke" an order which it has itself made, pursuant to CPR 3.1(7). It arises as a "second appeal" on the basis that it concerns an important point of principle or practice regarding the width or limitations of that rule.
2. The bone of contention is whether a district judge should, when reallocating a small claims track case to the fast track, have made a special order to avoid the default operation of CPR 44.11 whereby costs incurred prior to reallocation would be dealt with under the small claims track rules. The claimant, here the appellant, Mr Matthew Tibbles, submits that the district judge misled himself (in the absence of having the default rule drawn to his attention by counsel) by failing to make a special order that costs prior to the reallocation be dealt with according to fast track, and not small claims track, rules. It is said that £20,000 of costs incurred prior to reallocation are thus curtailed by the stringent costs rules relating to small claims track cases.
3. The claimant submits that there is power within CPR 3.1(7) to vary the district judge's order (which had said nothing about avoiding the default rule) and that as a matter of discretion the district judge was right subsequently to vary his order by ordering that prior costs should be dealt with on the fast track basis. The defendant, here the respondent, SIG plc trading as Asphalt Roofing Supplies, submits that the district judge was wrong to have varied his order and that on first appeal the county court judge was right to have concluded that the district judge should not have done so, both for the reasons which he gave and for further reasons contained in a respondent's notice.
4. As will appear below, the claimant did not apply to vary the district judge's order until after trial and final judgment in his claim. It was only when the question of pre-reallocation costs came to be debated as part of the detailed assessment of costs following judgment that the issue came to the fore and an application to vary was issued. Thus the district judge's reallocation order was made on 11 December 2008, final judgment was given on 28 April 2009, the CPR 44.11 point was taken by the defendant in its points of dispute on 15 June 2009, and the claimant's application to vary was issued on 23 October 2009. The application was to add the words: "The costs incurred prior to today [ie prior to 11 December 2008] are to be treated as costs in the fast track."
5. The district judge, DJ Wilding, varied his order, as requested, on 7 April 2010. On appeal, HHJ Elly, on 4 February 2011, allowed the defendant's appeal, albeit with regret, on the basis that the district judge lacked jurisdiction to operate under CPR 3.1(7).

The rules

6. CPR 3.1(7) provides:

"A power of the court under these Rules to make an order includes a power to vary or revoke the order."

7. CPR 26.9 provides:

"(1) When it has allocated a claim to a track, the court will serve notice of allocation on every party."

8. CPR 26.10 provides:

"The court may subsequently re-allocate a claim to a different track."

9. CPR 44.9 (headed "Costs on the small claims track and fast track") provides:

"(1) Part 27 (small claims) and Part 46 (fast track trial costs) contain special rules about –

(a) liability for costs;

(b) the amount of costs which the court may award; and

(c) the procedure for assessing costs.

(2) Once a claim is allocated to a particular track, those special rules shall apply to the period before, as well as after, allocation except where the court or a practice direction provides otherwise."

10. CPR 44.11 ("Costs following allocation and reallocation") provides:

"(1) Any costs orders made before a claim is allocated will not be affected by allocation.

(2) Where –

(a) a claim is allocated to a track; and

(b) the court subsequently re-allocates that claim to a different track,

then, unless the court orders otherwise, any special rules about costs applying –

(i) to the first track, will apply to the claim up to the date or reallocation; and

(ii) to the second track, will apply from the date of reallocation.

(Part 26 deals with the allocation and reallocation of claims between tracks.)

11. The Costs Practice Direction (CPR Pt 44) provides by its section 16 ("Costs Following Allocation and Re-Allocation: Rule 44.11"):

"16.1 This paragraph applies where the court is about to make an order to re-allocate a claim from the small claims track to another track.

16.2 Before making the order to re-allocate the claim, the court must decide whether any party is to pay costs to any other down to the date of the order to re-allocate in accordance with the rules contained in part 27 (The Small Claims Track).

16.3 If it decides to make such an order about costs, the court will make a summary assessment of those costs in accordance with that Part."

The background facts

12. Mr Tibbles' claim was a low value personal injury claim arising out of an accident at work. He strained his back while lifting a roll of lead weighing 55 kilos. He suffered moderately severe back symptoms for about 3 weeks and his symptoms resolved in about 8 weeks.
13. He instructed solicitors on the same day as he suffered his injury, 6 July 2006. A letter of claim was sent to the defendant on 4 October 2006. The reply sent on 6 December 2006 denied liability. A claim form was issued on 28 May 2008, claiming damages in excess of £1,000 (the small claims track limit, see CPR 26.6(1)(a)(ii)). A medical report from the consultant orthopaedic surgeon, Mr Knottenbelt, dated 25 February 2009, was served with the proceedings. A defence was filed on 3 July 2008. In late July 2008 both parties lodged their respective allocation questionnaires at court, contending for a fast track allocation. On 11 September 2008 the parties, by their solicitors, agreed directions involving allocation of the claim to the fast track. Their agreed order was sent to the court.
14. Although the views expressed by the parties are a factor in the court's allocation discretion, they are far from being the only factor: see CPR 26.8. It is for the court to allocate.
15. On 28 October 2008 DJ Wilding made his order, without a hearing, allocating the claim to the small claims track, with appropriate directions.
16. On 3 November 2008 the claimant applied to set aside the order, and on 7 November 2008 the defendant wrote to the court to say that it did not object.
17. At a first telephone hearing before DJ Wilding on 9 December 2008, the judge indicated that he was not minded to set aside his order (which would have involved a fresh allocation) but at most to reallocate the claim. However, he expressed his preference for keeping the claim in the small claims track, on the basis that the claim was worth just £500 or £600. The hearing was adjourned for further argument, and there was a second telephone hearing on 11 December 2008. The judge was then persuaded that the claim was worth more than £1,000 and reallocated it to the fast track. He said nothing to detract from the default position that prior costs would be on the small claims track basis. There was no submission that he should order otherwise. There was no request for him to decide whether any party should actually pay costs to any other party down to the date of the reallocation order, and no one brought CPR Costs PD16 to his attention, any more than any other rule. The defendant's attitude, expressed by its solicitor, Mr Johnson, was that it was a "borderline case…on the cusp between small and fast" and that he was content for the judge to decide. The district judge agreed that it was "on the cusp".
18. On 28 April 2009 the claim was tried by HHJ Everall QC. He gave judgment for Mr Tibbles for £750, being £1,500 less a fifty per cent reduction for contributory negligence. Thus the ultimate decision justified the decision to reallocate to the fast track, since contributory negligence is not to be taken into account for the purpose of the £1,000 threshold. The defendant was ordered to pay Mr Tibbles' costs on the standard basis to be the subject of detailed assessment if not agreed.
19. On 22 May 2009 Mr Tibbles commenced detailed assessment and on 15 June 2009 the defendant served points of dispute. The point was taken that by reason of CPR 44.11 costs prior to reallocation on 11 December 2008 were to be assessed subject to the restrictive special rules relating to the small claims track. Mr Tibbles complains (or perhaps his solicitors for they are acting under a CFA) that £20,000 (out of a total of some £30,000) costs which they are claiming from the defendant were incurred prior to 11 December 2008, and that under the small claims track's special rules none of such costs will be recoverable. The £20,000 is said to be inclusive of success fee, disbursements and VAT.
20. On 23 October 2009, that is to say some four months after the point was taken in the defendant's points of dispute and some ten months after the district judge's reallocation order in question, Mr Tibbles applied under CPR 3.1(7) (alternatively under the slip rule in CPR 40.12) to vary that order by adding the words: "The costs incurred prior to today are to be treated as costs in the fast track". A witness statement was served from a solicitor within Pictons, who were acting for Mr Tibbles. The statement set out the background to the application. Subject to that, it contains little more than submission, which is encapsulated within the following passage:

"The important point for the purposes of this application is that the court (and for that matter the parties) did not intend to create a situation whereby costs incurred prior to 11 December 2008 were to be treated other than as fast track costs. On any objective view, where the parties had agreed that the case should be allocated to the fast track and where the case only ended up on the small claims track (for just 6 weeks) by reason of (with respect) mistaken judicial assessment of its value the clear intention of the parties and the court was to treat all costs as though the mistaken allocation had never taken place."

The defendant filed no evidence.

The judgment of DJ Wilding

21. The application came before DJ Wilding on 10 February 2010, and he handed down a reserved judgment on 7 April 2010 whereby he acceded to the request to vary.
22. In his judgment he considered jurisprudence on CPR 3.1(7) (to which I will refer below) and reasoned as follows:

"It can be seen that neither party made any submission that I should make any different order about costs and that no one had in mind CPR 44.9, 44.11, or the PD.

It is clear that there is no new evidence before me today than was before me at the hearing on the 11^th December 2009 [sic]^[1] and the only basis on which the application could succeed is in respect of additional argument today that was not before me on the 11^th December 2009 [sic]…

It seems that in this case I must consider if argument alone is enough to provide me with jurisdiction to vary my earlier order under CPR 3.1(7)…"

23. DJ Wilding then cited extensively from Business Environment v. Deanwater [2009] EWHC 2014, where Mann J said, in a passage highlighted by the district judge, that "the right question" is "should the costs order have been made in the first place knowing what is now known – rather than approaching it more obliquely". He then continued:

"I have highlighted a part of the decision as in my judgment this is the right test to apply in circumstances where there has been a failure by the parties to alert the court to mandatory rules that it should have considered, but did not do so by reason of an oversight on the part of both of the parties and it has to be said, in this instance by me, the court…In asking the question in this case "should the costs order have been made in the first place knowing what is now known?" I would answer that by saying that it would not, if I had been alerted to the relevant rules, I would have been bound to consider the issue of costs on reallocation…

It seems to me therefore that I should address the issue of costs afresh as at the date of reallocation.

In my judgment an order for costs as sought by Mr Neale in his application would have been the order that I would have made. There has been no argument to the contrary before me on that point.

I shall therefore amend my order…"

24. DJ Wilding therefore considered that he both had jurisdiction to vary and that in his discretion, exercised retrospectively as at the date of the order whose variation he was considering, he ought to vary his earlier order. He applied the test, "should the costs order have been made in the first place knowing what is now known?", on the basis that it was in line with jurisprudence in this court.

The judgment of HHJ Elly

25. Judge Elly reversed the district judge's decision. He expressed regret, for he sympathised with the judge's ultimate exercise of his discretion ("I do not criticise the exercise of the discretion of the District Judge. I have a great deal of sympathy with the claimant's position…" at para 14), but he regarded the district judge as exceeding the jurisdiction allowed by CPR 3.1(7). The kernel of his reasoning is in this passage (at para 13):

"I do not think the District Judge had the jurisdiction to grant the application in circumstances where what he is being asked to do is to revisit the decision where the parties had, or one of them, had failed to appreciate the consequences of that decision. I am afraid that the consequences are very clear in the practice rules and I think it is trite law to say that people are taken to understand what the law is but I do not think it is quite so trite when it comes to expecting solicitors working in particular fields to understand what the practice rules are."

26. Thus Judge Elly considered that he was bound by this court's jurisprudence to say that the jurisdiction of CPR 3.1(7) did not extend to the situation where parties' lawyers simply failed to look after their clients' interests in terms of applicable rules of civil procedure.

The jurisprudence

27. District Judge Wilding and Judge Elly considered seven cases on the width of CPR 3.1(7). As Dame Janet Smith observed in granting permission to appeal in this case, the application of that rule appears to be causing difficulty. I will therefore briefly survey the jurisprudence.
28. It begins with Patten J in Lloyds Investment (Scandinavia) Ltd v. Ager-Hanssen [2003] EWHC 1740 (Ch), whose observations have been repeated in subsequent cases. Patten J there refused to vary the order of a deputy judge of the high court setting aside a default judgment on terms of payment into court of a sum of money by the defendant, who was a litigant in person. The condition was not complied with. Patten J said at [7]):

"It seems to me that the only power available to me on this application is that contained in CPR Part 3.1(7), which enables the Court to vary or revoke an order. This is not confined to purely procedural orders and there is no real guidance in the White Book as to the possible limits of the jurisdiction. Although this is not intended to be an exhaustive definition of the circumstances in which the power under CPR Part 3.1(7) is exercisable, it seems to me that, for the High Court to revisit one of its earlier orders, the Applicant must either show some material change of circumstances or that the judge who made the earlier order was misled in some way, whether innocently or otherwise, as to the correct factual position before him. The latter type of case would include, for example, a case of material non-disclosure on an application for an injunction. If all that is sought is a reconsideration of the order on the basis of the same material, then that can only be done, in my judgment, in the context of an appeal. Similarly it is not, I think, open to a party to the earlier application to seek in effect to re-argue that application by relying on submissions and evidence which were available to him at the time of the earlier hearing, but which, for whatever reason, he or his legal representatives chose not to deploy."

29. In Collier v. Williams [2006] EWCA Civ 20, [2006] 1 WLR 1945 four conjoined appeals were heard in order to give guidance on rules for service of proceedings. In that context consideration was given to CPR 3.1(7). Dyson LJ set out Patten LJ's observations from Lloyds Investment and continued:

"[40] We endorse that approach. We agree that the power given by CPR r.3.1(7) cannot be used simply as an equivalent to an appeal against an order with which the applicant is dissatisfied. The circumstances outlined by Patten J are the only ones in which the power to revoke or vary an order already made should be exercised under rule 3.1(7)."

30. However, later in the judgment of the court Dyson LJ revisited the question of CPR 3.1(7) in these terms:

"[119] The possibility of recourse to CPR r 3.1(7) remains to be considered. As we have said earlier, this rule gives a very general power to vary or revoke an order. It appears to be unfettered. But it is a wrong exercise of this power to vary or revoke an order where there has been no material change of circumstances since the earlier order was made and/or no material is brought to the attention of the second court which was not brought to the attention of the first. A party who unsuccessfully deploys all his material before a court should not be allowed to have a second bite of the cherry merely because he failed to succeed on the first occasion…

[120] In short, therefore, the jurisdiction to vary or revoke an order under CPR r 3.1(7) should not normally be exercised unless the applicant is able to place material before the court, whether in the form of evidence or argument, which was not placed before the court on the earlier occasion."

31. I have emphasised the words "only" in [40] and "normally" in [120] to draw attention to the theoretical inconsistency between these passages. However, in my judgment, the inconsistency is apparent rather than real. The two situations of which Patten J spoke were not intended as an "exhaustive definition" and this court in Collier v. Williams endorsed Patten J's observations. However, they were treated as perhaps the only obvious situations in which the power within CPR 3.1(7) is to be invoked. As such, it was possible to say that in their absence the exercise of that power was to be discouraged.
32. This court revisited the subject in Edwards v. Golding [2007] EWCA Civ 416. The lower court had revoked an earlier order whose effect was to do the very opposite of what a master's judgment had demonstrated that he wished to do, namely to leave a question of limitation to be canvassed in the proceedings. The exercise of the CPR 3.1(7) power was upheld by this court, one of the rare examples of that happening in a disputed case. Buxton LJ said that the terms of the rule "are very wide. They appear to give the court a broad discretionary power" (at [23]). After citing Collier v. Williams Buxton LJ continued:

"[24] The basis of that jurisprudence is that the jurisdiction under order 3.1(7) is not a substitute for an appeal. There must be additional material before the court in the form of evidence or, possibly, argument. I would reserve the issue of whether additional argument in itself is enough to attract the jurisdiction of rule 3.1(7), but the general thrust of Collier is that the case before the court before which rule 3.1(7) is moved must be essentially different from one of simple error that could be righted on appeal. As was pointed out in the course of argument, it would be striking if, taking the words of Patten J literally, new facts could lead to rule 3.1(7) being applied, but that did not apply to a case such as the present, where not new facts but a completely new understanding of the nature of the Master's order was before the judge."

33. The exercise of the power in CPR 3.1(7) was approved on the basis that –

"[The master] made an order intending to keep that issue live, but the form of his order frustrated his intention. It was open to the judge to hold that since the application should never have been made in that form, it could be set aside. That is not to usurp the power of the Court of Appeal, but rather to correct a fundamental procedural error" (at [26]).

34. Roult v. North West Strategic Health Authority [2009] EWCA Civ 444, [2010] 1 WLR 487 concerned the settlement of medical negligence litigation which had to be approved by the court. The order reserved the subsequent quantification of certain care costs. Later, the claimant sought to revise the relevant schedule of costs by reference to private, as distinct from local authority, care. The judge said he had no power to reopen the settlement, but on appeal it was argued that CPR 3.1(7) gave him that power. This court disagreed. Hughes LJ said:

"[15] There is scant authority upon rule 3.1(7) but such as exists is unanimous in holding that it cannot constitute a power in a judge to hear an appeal from himself in respect of a final order. Neuberger J said as much in Customs and Excise Comrs v Anchor Foods (No 2) The Times 28 September 1999. So did Patten J in Lloyds Investment (Scandinavia) Ltd v. Ager-Hanssen [2003] EWHC 1740 (Ch). His general approach was approved by this court, in the context of case management decisions, in Collier v Williams [2006] 1 WLR 1945. I agree that in its terms the rule is not expressly confined to procedural orders. Like Patten J in the Ager-Hanssen case [2003] EWHC 1740 I would not attempt any exhaustive classification of the circumstances in which it may be proper to invoke it. I am however in no doubt that CPR r 3.1(7) cannot bear the weight which Mr Grime's argument seeks to place upon it. If it could, it would come close to permitting any party to ask any judge to review his own decision and, in effect, to hear an appeal from himself, on the basis of some subsequent event. It would certainly permit any party to ask the judge to review his own decision when it is not suggested that he made any error. It may well be that, in the context of essentially case management decisions, the grounds for invoking the rule will generally fall into one or other of the two categories of (i) erroneous information at the time of the original order or (ii) subsequent event destroying the basis on which it was made. The exigencies of case management may well call for a variation in planning from time to time in the light of developments. There may possibly be examples of non-procedural but continuing orders which may call for revocation or variation as they continue – an interlocutory injunction may be one. But it does not follow that wherever one or other of the two assertions mentioned (erroneous information and subsequent event) can be made, then any party can return to the trial judge and ask him to reopen any decision. In particular, it does not follow, I have no doubt, where the judge's order is a final one disposing of the case, whether in whole or part. And it especially does not apply where the order is founded upon a settlement agreed between the parties after the most detailed and highly skilled advice. The interests of justice, and of litigants generally, require that a final order remains such unless proper grounds for appeal exist."

35. Within the period of this trio of decisions in the court of appeal, there have been a number of cases on CPR 3.1(7) in the high court. Thus in Latimer Management Consultants Ltd v. Ellingham Investments Ltd [2006] EWHC 3662 (Ch) Bernard Livesey QC sitting as a deputy high court judge held that there was jurisdiction to vary a costs order to make a party to the litigation responsible for paying the costs of another party against whom an order had already been made. That was a case where there had been both a material change of circumstances and a material misrepresentation (see at [30] and [40]). Therefore, other than being an example where CPR 3.1(7) was successfully exercised, it does not seem to me to advance matters.
36. Simms v. Carr [2008] EWHC 1030 (Ch) is another first instance decision which Judge Elly considered. There Morgan J held on appeal that a master did not have power to revoke his previous order for security for costs. Although the master, second time around, had been told things of which he had not known first time around, the new information was not material to the exercise of his discretion and "the facts could have been, but were not, correctly stated first time round" (see at [46] and [53]). (However, where circumstances change, the question of security for costs may be revisited: see Kaistjansson v R. Verney & Co Ltd (CA, 18 June 1998, unreported).
37. Business Environment Bow Lane Ltd v. Deanwater Estates Ltd [2009] EWHC 2014 (Ch), [2009] 4 Costs LR 672, was influential in DJ Wilding's judgment. However, the observations of Mann J at the end of his judgment were entirely obiter, and a CPR 3.1(7) point was not even argued (see at [40]). It seems to me that they can throw no new light on the subject.
38. Kojima v. HSBC Bank plc [2011] EWHC 611 (Ch) was decided after the hearing before Judge Elly. There the claimant, as a litigant in person, had admitted his liability to the bank and the judge had ordered that unless he executed a charge for the admitted amount the bank should be entitled to enter judgment. Subsequently the claimant was advised of a defence and wished to withdraw his admission of liability. He executed the charge, and applied under CPR 3.1(7) to have the "unless order" revoked. His application failed. However, that case was decided by Briggs J, building on what Hughes LJ had said in Roult, on the basis that even the limited scope for the rule allowed by the jurisprudence commencing with Patten J's observations did not apply to final orders. As such that decision does not touch on the interlocutory and case management order with which we are concerned in this case. Nevertheless, Briggs J also commented more generally as follows:

"[33] Leaving aside default judgments, with their self-contained regime for setting aside, I consider that a line has to be drawn between orders for which revocation may be sought under CPR 3.1(7) upon the alternative grounds first identified in Lloyds Investment v Ager-Hanssen and approved in Collier v. Williams [2007] 1 All ER 991 on the one hand, and final orders, to which the public interest in finality applies, on the other. I consider that orders made by way of judgment on admissions fall clearly within the second of those categories. Once a party has admitted a claim, and judgment has been given against him on that claim, the other party is in principle entitled to assume that, barring any appeal, there is an end to the matter.

[34] It is unnecessary for me to conclude whether exceptional circumstances may none the less justify the revocation of a final order within that second category, still less to prescribe in advance what those circumstances might be…

[35] Having concluded that the Lloyds Investment v Ager-Hanssen analysis is inapplicable in the present circumstances, it is also unnecessary for me to resolve the apparent tension between Patten J's dictum that a party will be excluded from seeking revocation of an order where he has chosen not to present certain materials, and Morgan J's analysis in Simms v Carr [22008] EWHC 1030 (Ch) that a party will be precluded merely because those materials were available for use, regardless whether their non-use was a matter of conscious choice. Had it been necessary, I would have concluded that whereas a conscious choice not to deploy relevant material (whether evidence or argument) would generally present an almost insuperable barrier to an applicant for revocation under CPR 3.1(7), the failure to do so, otherwise than through conscious choice, for example because of the absence of legal representation at the material time, would be a relevant negative factor against the exercise of discretion, but by no means an insuperable hurdle, if other relevant considerations militated in favour of exercise of the discretion."

39. In my judgment, this jurisprudence permits the following conclusions to be drawn:

(i) Despite occasional references to a possible distinction between jurisdiction and discretion in the operation of CPR 3.1(7), there is in all probability no line to be drawn between the two. The rule is apparently broad and unfettered, but considerations of finality, the undesirability of allowing litigants to have two bites at the cherry, and the need to avoid undermining the concept of appeal, all push towards a principled curtailment of an otherwise apparently open discretion. Whether that curtailment goes even further in the case of a final order does not arise in this appeal.

(ii) The cases all warn against an attempt at an exhaustive definition of the circumstances in which a principled exercise of the discretion may arise. Subject to that, however, the jurisprudence has laid down firm guidance as to the primary circumstances in which the discretion may, as a matter of principle, be appropriately exercised, namely normally only (a) where there has been a material change of circumstances since the order was made, or (b) where the facts on which the original decision was made were (innocently or otherwise) misstated.

(iii) It would be dangerous to treat the statement of these primary circumstances, originating with Patten J and approved in this court, as though it were a statute. That is not how jurisprudence operates, especially where there is a warning against the attempt at exhaustive definition.

(iv) Thus there is room for debate in any particular case as to whether and to what extent, in the context of principle (b) in (ii) above, misstatement may include omission as well as positive misstatement, or concern argument as distinct from facts. In my judgment, this debate is likely ultimately to be a matter for the exercise of discretion in the circumstances of each case.

(v) Similarly, questions may arise as to whether the misstatement (or omission) is conscious or unconscious; and whether the facts (or arguments) were known or unknown, knowable or unknowable. These, as it seems to me, are also factors going to discretion: but where the facts or arguments are known or ought to have been known as at the time of the original order, it is unlikely that the order can be revisited, and that must be still more strongly the case where the decision not to mention them is conscious or deliberate.

(vi) Edwards v. Golding is an example of the operation of the rule in a rather different circumstance, namely that of a manifest mistake on the part of the judge in the formulation of his order. It was plain in that case from the master's judgment itself that he was seeking a disposition which would preserve the limitation point for future debate, but he did not realise that the form which his order took would not permit the realisation of his adjudicated and manifest intention.

(vii) The cases considered above suggest that the successful invocation of the rule is rare. Exceptional is a dangerous and sometimes misleading word: however, such is the interest of justice in the finality of a court's orders that it ought normally to take something out of the ordinary to lead to variation or revocation of an order, especially in the absence of a change of circumstances in an interlocutory situation.

40. I am nevertheless left with the feeling that the cases cited above, the facts of which are for the most part complex, and reveal litigants, as in Collier v. Williams, seeking to use CPR 3.1(7) to get round other, limiting, provisions of the civil procedure code, may not reveal the true core of circumstances for which that rule was introduced. It may be that there are many other, rather different, cases which raise no problems and do not lead to disputed decisions. The revisiting of orders is commonplace where the judge includes a "Liberty to apply" in his order. That is no doubt an express recognition of the possible need to revisit an order in an ongoing situation: but the question may be raised whether it is indispensable. In this connection see the opening paragraph of the note in The White Book at 3.1.9 discussing CPR 3.1(7), and pointing out that this "omnibus" rule has replaced a series of more bespoke rules in the RSC dealing with interlocutory matters.
41. Thus it may well be that there is room within CPR 3.1(7) for a prompt recourse back to a court to deal with a matter which ought to have been dealt with in an order but which in genuine error was overlooked (by parties and the court) and which the purposes behind the overriding objective, above all the interests of justice and the efficient management of litigation, would favour giving proper consideration to on the materials already before the court. This would not be a second consideration of something which had already been considered once (as would typically arise in a change of circumstances situation), but would be giving consideration to something for the first time. On that basis, the power within the rule would not be invoked in order to give a party a second bite of the cherry, or to avoid the need for an appeal, but to deal with something which, once the question is raised, is more or less obvious, on the materials already before the court.
42. I emphasise however the word "prompt" which I have used above. The court would be unlikely to be prepared to assist an applicant once much time had gone by. With the passing of time is likely to come prejudice for a respondent who is entitled to go forward in reliance on the order that the court has made. Promptness in application is inherent in many of the rules of court: for instance in applying for an appeal, or in seeking relief against sanctions (see CPR 3.9(1)(b)). Indeed, the checklist within CPR 3.9(1) must be of general relevance, mutatis mutandis, as factors going to the exercise of any discretion to vary or revoke an order.
43. It is in the light of these principles that I turn to the circumstances of this case.

Discussion

44. Thus I ask myself: what might or ought DJ Wilding to have done if he had been asked by Mr Tibbles, on the very next day after the order of 11 December 2008, to make the variation to the effect that all the costs of the case, including the costs incurred prior to his reallocation order, should be on the fast track basis? There would it seems have been no new material, merely a belated realisation of the effect of CPR 44.11 and a frank acknowledgment that that had been overlooked. There would it seems have been no opposition. If there had been, the judge could have dealt with any argument speedily and easily. However, we know that there would in fact have been no argument raised against the variation, because even some 14 months later, when DJ Wilding raised the issue as to what he would have done at the time, ie on 11 December 2008, if he had been aware of CPR 44.11 and the need to consider the basis for the costs previously incurred, there was no argument from the respondent to the effect that he would not or ought not to have made an "order otherwise", departing from the default rule. The district judge had no difficulty in saying that, as at that time, he would have made the order requested by Mr Tibbles. On that basis, I do not think that the use of CPR 3.1(7) would have been an impermissible use of the power contained in it. Any extra costs caused by the revisiting of the order could have been easily dealt with, in favour of the respondent. It might be said that in such circumstances it would be a highly disciplinarian view of the matter to have left the claimant with the order as previously formulated, especially in circumstances where originally both parties had been agreed that the case was properly to be allocated to the fast track.
45. However, that is not what happened. On the circumstances of this case, nearly everything militated against the exercise of the CPR 3.1(7) power, whatever its ramifications or limitations.
46. First, there was a very long delay in making the application to vary. The delay was not only long in itself, since the application was made on 23 October 2009 in respect of an order dated 11 December 2008 (and then there was the further wait until a hearing could be arranged for 10 February 2010, and a further wait until the reserved judgment was handed down on 7 April 2010, additional delays which could be expected in the circumstances), but critically it extended over the time when Mr Tibbles' case was tried and final judgment was given. The judgment was in Mr Tibbles' favour, but if he had lost the case and/or costs had been awarded in favour of the respondent, then it must be assumed that Mr Tibbles would never have made the application to vary at all. It was only made because Mr Tibbles won the case, was awarded his costs, and the issue then arose on the detailed costs assessment as to the proper basis on which the pre-reallocation costs were to be assessed.
47. Secondly, inevitable prejudice to the respondent was caused by the failure to seek variation promptly and to delay the application for so long. Although no evidence was filed by the respondent on the application, it was submitted that it had been caused prejudice, and it must be inferred that that was so. In the first place it would face a claim for £20,000 pre-reallocation costs in circumstances where it is accepted that, without a variation, none of such costs would be recoverable. Secondly, it has had to face, and finance (whatever be the ultimate outcome), these drawn-out proceedings, extending into 2012 and involving three court hearings and two appeals in respect of litigation which, subject only to what should have been a standard and limited matter either for agreement or for assessment of costs, was over. The respondent was entitled to proceed with the litigation since 11 December 2008, whether it or its advisers thought about it consciously or not, on the basis of what the CPR (and thus rule 44.11) said about how costs would be assessed. In my judgment DJ Wilding was wrong to say that the respondent had suffered no prejudice, and Judge Elly was equally wrong to express regret at the outcome to which he felt obliged to come.
48. Thirdly, if, as the matter was argued below and also in this court, this case had to be fitted within a "jurisdiction" confined to Patten J's two categories of changed circumstances, this case fell effectively and according to the spirit of the matter outside those categories. There was no change of circumstances after 11 December 2008. There was no misrepresentation or misstatement of any kind which caused the order to be made in the form it took. The highest that the application can be put is that the parties and the district judge acted in ignorance or forgetfulness of CPR 44.11 and its effect. However, litigation is conducted in our system on the basis that it is the responsibility of each party to look after its own interests and to know or research the law accordingly. Where litigants in person are involved, things may operate somewhat differently, but in the present case Mr Tibbles was represented, and he was represented on 11 December 2008 by a solicitor. There is nothing in civil procedure about which solicitors can justifiably be expected to know as much, as matters of costs. It is not as though the judge had made it clear that he thought that pre-reallocation costs should have been based on the fast track rules but failed in his order, because of ignorance of CPR 44.11, to achieve his intention. On the contrary, he thought that the case was on the cusp of the two tracks and that it was a borderline thing.
49. Fourthly, DJ Wilding was in any event wrong to exercise his discretion on the retrospective basis on which he did. It was thus common ground, for that reason among possible others, that the question of discretion could be revisited. The question on such an application is not merely what the right order ought to have been at the time of the original order, but what should be done at the time of the application to vary, bearing in mind any change of circumstance, any new evidence, any delay and any explanation offered for it, and especially any prejudice.
50. As for new evidence, there was essentially none from the applicant. There was no explanation of the gross delay. It was merely submitted that the original order had worked an injustice. It was not stated when the default rule in CPR 44.11 had been appreciated by Mr Tibbles or his representatives as working its effect on pre-reallocation costs, and it would have been important to know whether that had been before or after trial and its outcome.
51. Fifthly, it was submitted by Mr James on behalf of the appellant that paragraph 16.2 of the Costs Practice Direction to Part 44, with its mandatory rule ("must decide"), had not been observed by the court, and that that somehow made a critical or important difference. However, on examination it appeared that this practice direction was something of a red herring. There was no question of one party having to "pay costs" to another party down to the date of the order to reallocate which needed summary assessment (save possibly the costs of the telephone hearing of 9 December 2008 which were awarded to the defendant). The highest that the matter could be put is that if the judge had considered making a summary assessment of any past costs, which he did not, nor was he asked to, that might have led to the question being raised as to the basis of any such costs. As it is, no such question arose. The practice direction cannot widen or alter the effect of CPR 3.1(7). Nor would the practice direction have entered into the decision as to whether or not to depart from the default rule contained in CPR 44.11.
52. In sum, I do not consider that the application in this case falls within the spirit of the primary circumstances in which CPR 3.1(7) may be invoked, as discussed in the jurisprudence; and even if in a proper case an application could have been brought promptly to visit a question under CPR 44.11 which had never been visited before, the circumstances of the present case could never have supported the late application that was made.
53. There was little if any discussion in the present appeal of the "slip rule", now found in CPR 40.12. I would therefore be reluctant to say much about it. The current form of the rule permits an application under it to be made "at any time" ("The court may at any time correct an accidental slip or omission in a judgment or order"). The note in The White Book (at 40.12.1) says that it is "there to do no more than to correct typographical errors" and that it "cannot be used to enable the court to have second thoughts or to add to its original order". It may be, however, that in the past it was used more expansively to put right a defect in an order due to "an accidental omission of counsel or solicitor to ask for, or of the court to provide for, something which ought to have been provided for" (see Re In Inchcape (Earl of) [1942] Ch 394 at 398, where Morton J referred back to Fritz v. Hobson (1880) 14 Ch D 542 (Fry J) and applied its learning. I am grateful to Lord Justice Lewison for supplying this reference. That may be stretching the slip rule, but, as I have ventured to suggest above, in an appropriate case, and on prompt application, and in the absence of prejudice, it may well be the sort of case in which CPR 3.1(7) would be available today, even though there was no misleading or misunderstanding. Since the court has asserted this power since 1880, it may be doubtful whether it would be opening the door too wide to find it now within CPR 3.1(7).

Conclusion

54. It was for these reasons that, at the time of the hearing of this appeal, I joined in dismissing it.

Lord Justice Etherton :

55. I agree with both judgments.

Lord Justice Lewison :

56. I agree with Rix LJ that, for the reasons he gives, the appeal must be dismissed. I agree also that if either party had applied to the district judge for him to change his order on the day after it had been made on the ground that both parties (and the judge himself) had overlooked the powers of the court under CPR 44.11 he could (and perhaps should) have changed his order. In that narrow sense I consider that the district judge had jurisdiction under CPR 3.1 (7). However, as Rix LJ has explained much water had flowed under the bridge since the original order was made. SIG had conducted the litigation as it was entitled to do on the basis that costs were governed by the CPR themselves; and not by any order of the court to contrary effect. From Mr Tibbles' perspective the application was a one way bet. Those factors, added to the long delay, made it unjust for the district judge to have retrospectively varied his earlier order.

Note 1   Given the time that had gone by, it is perhaps not surprising that the judge should have made this error.    [Back]