Wyche v Careforce Group Plc

A material breach of an “unless” order ordinarily takes effect, but the defaulting party may seek relief under Civil Procedure Rules 1998, Rule 3.9(1). The court must consider all the circumstances, including efficient and proportionate litigation and enforcement of compliance. Materiality is assessed in the round. Inadvertence, prompt remedial action, the practical effect of the breach, and its impact on the trial may all be relevant. Material breaches which are unintentional and minor failings in a diligent attempt to comply may justify relief. The stricter approach to substantial disregard of orders does not require the court to punish immaterial breaches or treat human error as irrelevant.

The claimant sought relief from sanctions and a declaration that the defendant’s defence had been struck out. The defendant had failed fully to comply with an “unless” order requiring extensive electronic disclosure by a specified date. The admitted failures included using an incorrect search operator and applying part of the required keyword search to an insufficient data set. The claimant also relied on alleged misspelling and privilege-classification failures.

The underlying claim concerned deferred consideration under a share purchase agreement. The central issue was whether the breaches were material and, if so, whether relief from the sanction debarring the defendant from defending should be granted under Rule 3.9(1).

1. Applications. Careforce’s application for relief from the sanction was granted. Mr Wyche’s application for a declaration that Careforce was debarred from defending was refused.
2. Applicable approach. A material breach of an “unless” order ordinarily activates the sanction. Relief must ordinarily be sought under Rule 3.9(1) of the Civil Procedure Rules 1998. The court must consider all the circumstances, including the need for litigation to be conducted efficiently and at proportionate cost and the need to enforce compliance with rules, practice directions and orders.
3. Materiality and human error. Materiality is assessed in the round. The court is not required to punish trivial breaches or insist mechanically on perfect compliance. Inadvertence is relevant, although it is not a decisive answer. Deliberate breach will ordinarily weigh strongly against relief, absent exceptional circumstances. Prompt correction and the consequences of the breach are also relevant.
4. Application. The use of “OR” instead of “AND” caused excessive disclosure rather than withholding documents. It was identified and remedied promptly. The failure to conduct the “Cheshire” and “Tender” search across the entire data set deprived the claimant temporarily of sight of 24 documents, but was readily remedied. Both failures were more than trivial, yet unintentional and minor failings in a diligent attempt to comply. They did not make the listed trial impossible or warrant stopping trial preparations.
5. The alleged misspelling was rejected as a substantive breach because the correctly spelt term had also been searched. The privilege mis-categorisation was trivial and was disregarded. Granting relief in these circumstances was consistent with the principles discussed in Fred Perry (Holdings) Limited v The Brands Trading Plaza Limited [2012] EWCA Civ 224, and did not encourage a culture of delay or non-compliance.