DENTON DID NOT APPLY TO THE DEFENDANT’S APPLICATION FOR AN EXTENSION OF TIME: HOWEVER – CONSIDERING THE OVERRIDING OBJECTIVE – THE APPLICATION WAS REFUSED

In Bailey & Ors v GlaxoSmithKline UK Ltd [2025] EWHC 186 (KB) Mr Justice Bourne considered whether the defendant should have an extension of time.  The judge considered whether the “Denton” principles apply to the defendant’s application and if not then what principles should apply to the application.  Having determined that Denton did not apply the judge refused the defendant’s application for an extension on the basis that the extensive delay did not further the overriding objective.

“Considering the circumstances as a whole, and despite the fact that the Defendant is seriously out of pocket, I have concluded that it would not be just or proportionate to allow the proposed application to proceed, having regard to the passage of more than 3 years between the deadline and the application and the lack of a sufficient explanation for that delay.“

THE CASE

The defendant had succeeded in a case that the claimant had brought to trial and obtained an order for costs against the claimant.  The costs were substantial (an interim payment of £4.5 million had been ordered).   In July 2020 the trial judge made a specific order in relation to the possibility of the defendant making a third party costs order directing that any application should be made “no later than 31 July 2020”.

THE DEFENDANT’S APPLICATION FOR AN EXTENSION OF TIME

The claimants did not pay the costs and in May 2023 the ATE insurers wrote stating that they had not confirmed cover under the ATE policy in the absence of any claim by the insured claimants.

The defendant then made an application for a non-party costs order against  the insurer. This was made on 16th August 2023 – some considerable time outside the 31st July 2020 deadline.  The defendant also had to make an application for an extension of time.

THE ARGUMENTS CONSIDERED BY THE JUDGE

One of the main issues before the court was whether or not the “Denton” principles applied to the defendant’s failure to make an application within the deadline.  Much of the judgment considers the competing arguments on this issue.

THE JUDGE’S FINDINGS: DENTON DID NOT DIRECTLY APPLY BUT IT WAS INAPPROPRIATE TO GRANT AN EXTENSION OF TIME IN ANY EVENT

The judge found that there was no express sanction in the order made in 2020.  Further it was inappropriate to imply a sanction in that order.  However the defendant still required permission of the court to bring the application, which would be considered on more general terms on the basis of the overriding objective. Applying that test it was inappropriate to grant an extension of three years.

1. 1. In Yesss (A) Electrical Ltd v Martin Warren [2024] EWCA Civ 14, Birss LJ noted at [26] that “certain classes of implied sanction” have been identified. He referred to Sayers v Clarke Walker [2002] EWCA Civ 645 where it was held that a failure to lodge a notice of appeal in time carries the implied sanction that the appeal cannot be pursued, and Salford Estates v Altomart [2015] 1 WLR 1825 where it was held that a failure to file a respondent’s notice under in time carries the implied sanction that grounds for upholding a judgment that were not before the Court below cannot be raised on the appeal.

1. 1. Without referring to the other cases cited here by Mr Robinson, Birss LJ continued at [31]:

“Bearing in mind the importance of clarity in the procedural framework to be followed by court users, the hurdle for identifying something as an unexpressed but implicit sanction must be a high one. It has been identified in the two circumstances mentioned in the cases above. I prefer to say that the scope for identifying any further implied sanctions over and above these two must be very narrow. Bearing in mind that the Denton ‘ethos’ may apply even when r3.9 is not engaged, the need for further extensions of this concept is likely to be very limited.”

1. 1. Birss LJ was also part of the Court which, at the same time, decided FXF v English Karate Federation Ltd & Anor [2024] 1 WLR 1097, where Sir Geoffrey Vos MR said at [59]-[60]:

” … there are really three categories of case: (i) cases where the rule or order expressly provides for the sanction that will apply on non-compliance (eg failure to file witness statements on time, (ii) cases where the rule does not expressly state the sanction which applies for non-compliance, but permission of the court is needed to proceed (eg failure to file a notice of appeal on time), and (iii) cases where a further step is taken in consequence of the non-compliance, such as the entry of a default judgment (as in this case) or the striking out of a claim for non-attendance at trial …”.

1. 1. That passage was approved by Birss LJ in Yesss at [27]. Reading the cases together, it seems to me that although the door is left very narrowly open for recognising new categories of implied sanction, the position is not that there is an implied sanction in every case where, if a step is not taken in accordance with an order or rule or practice direction, permission will then be required to take it.

1. 1. That can be seen from the decision in Viegas (cited above). I see no significant distinction between Viegas and the present case. In each, the relevant provision (a rule in Viegas and an order in the present case) set a deadline, with the consequence that proceeding after expiry of the deadline would require permission. That consequence did not amount to an “implied sanction”.

1. 1. For that reason, if I needed to decide the point my conclusion would be that the relevant paragraph of the order of Lambert J did not carry an implied sanction and therefore that rule 3.9 is not in play.

1. 1. However, I also accept the submission of Mr Robinson that that does not change the outcome of this application. Whichever test applies, it is for the Defendant to persuade the Court that there should be a very lengthy extension to the deadline, having regard to all of the relevant factors including the fact that the deadline was imposed in the first place and including the effects on the parties of granting or refusing the extension as the case may be. The topics which are covered in a Denton exercise remain relevant. In particular, the Court will attach particular importance to the parties’ compliance with rules and orders and to the need to avoid delay, and a long extension of time requires cogent justification. But the main difference is that in the application of the overriding objective rather than rule 3.9, there is no presumption or starting point that the sanction or consequence (an inability to make the NPCO application) was correct.

1. 1. In my judgment, having regard to the overriding objective, the Defendant has not shown that the extension should be granted.

1. 1. I begin with the context in which the order of Lambert J was made. The Seroxat litigation had come to an end after 16 years, effectively being conceded at the start of the trial, 5½ years after public funding had been withdrawn because the claim lacked merit.

1. 1. In those circumstances it is not surprising that the Court made an order with the aim of tying up any loose ends as expeditiously as possible, and that order applied to all parties equally, notwithstanding that it was the Defendant that had incurred very substantial costs in defending a claim which never even reached the end of a trial.

1. 1. I also consider that the meaning of paragraph 5 of the order was entirely clear, and it plainly applied to any future NPCO application, whoever it was directed against. I accept that the parties and the Court only anticipated such an application against MLS, but it was nevertheless clear that the order was framed in general terms.

1. 1. The real questions in the present case are: when should the Defendant have realised that a NPCO application against Brit might be needed, and what should it have done about that possibility.

1. 1. In my judgment, the Defendant was very slow both to realise that the application might be needed and to act on that realisation.

1. 1. The fact that an ATE insurer was likely to be involved in any costs recovery was known from 2015 onwards. The adequacy of the cover was explored in the proceedings leading to Foskett J’s judgment of 4 February 2016. The risk that the insurers might not pay out was recognised in Foskett J’s judgment of 8 December 2017.

1. 1. That being so, although nobody turned their mind to the possibility of a NPCO against Brit at the time of Lambert J’s order of 3 July 2020, that possibility could have been thought about. Lambert J could, for example, have been asked to apply the 31 July deadline to any application against MLS and to make some other provision for any application against a different party.

1. 1. That can be seen from the fact that on 29 July 2020, 2 days before the NPCO application deadline, the Defendant’s solicitors wanted to know whether the Claimants had made any claim on their insurance. On that date (or earlier, and longer before the deadline), it would have been reasonable for them to ask themselves what the consequence of Lambert J’s order would be if there was no insurance recovery in the usual way.

1. 1. In those circumstances it seems to me that when the 30 July 2020 deadline was allowed to pass without the question of any future application being put before the Court, the Defendant was running the risk that the Court would not allow the indulgence of an extension at a later date. I would characterise this not as a deliberate decision to disobey an order, but rather as an omission to think through the implications of the order.

1. 1. Thereafter, with the knowledge that that deadline had expired, the Defendant proceeded very slowly indeed, there being no communication with Brit until 6 August 2021. The slowness of its progress is the principal reason why the Defendant came to need such a long extension two years later, in August 2023.

1. 1. I take into account, in the Defendant’s favour, that it was misled by Fortitude Law’s letter of 13 November 2020 and that subsequent chasing letters were not responded to. But the question is, what should the Defendant have done in that situation. In my judgment, it was open to the Defendant at all times to bring the question of a NPCO against Brit and an extension of time before the Court, even if there remained a prospect that the application might not ultimately be needed. As time passed, the need to raise this question with the Court became ever more pressing.

1. 1. Once contact had been made with CMS acting on Brit’s behalf on 7 September 2021, progress was even slower. Whilst it is unattractive for Brit to hide behind its omission to respond substantively between that date and 25 May 2023, the fact is that time was running against the Defendant for any application to extend the long-expired deadline for a NPCO application. No explanation whatsoever has been advanced for the delay between the chasing letters of 12 January 2022 and 20 April 2023. It seems that the matter simply went to sleep. Brit is not free of any blame for that gap in communications, and its lack of response during that time was unhelpful and unedifying but, in the absence of any proceedings against Brit (or even the threat of such proceedings), this was not a breach of any duty falling on Brit.

1. 1. When Brit on 25 May 2023 announced that it had not received any claim under the policy, the time had long since passed when an application should have been made to extend the expired deadline. But even then, another 12 weeks were allowed to pass. That delay too has no satisfactory explanation.

1. 1. In those circumstances, the grant of the desired extension would not be in accordance with the overriding objective. By reference to the factors specified in CPR 1.1(2):

a. There is no issue in this case about equality of arms or access to court.

b. Saving expense is not directly relevant, as the TPCO application would have occasioned expense whenever it was made.

c. As to proportionality, I bear in mind in the Defendant’s favour that a significant sum of £750,000 is involved, though that should be seen in the context of the recovery of a much larger sum in costs from MLS. Neither party has prayed in aid anything specific about its own financial position.

d. Logically, the need to deal with cases fairly will tend to favour permitting a party to have an issue decided. This is not a case where allowing an extension would cause significant prejudice to Brit, over and above the prejudice of having to deal with litigation which at one stage appeared to have fallen dormant. But the need to deal with cases expeditiously carries greater weight in the present circumstances. I have explained why the Defendant has at all times failed to act in a way which merits the Court’s indulgence in granting a long extension of time.

e. Allotting an appropriate share of the Court’s resources is not a decisive factor in this case, because the proposed application would have consumed resources whenever it was made.

f. The other factor of critical importance in the present case is the need to enforce compliance with the Court’s orders. The Defendant does not appear to have considered the workability of the deadline when the order of 3 July 2020 was made. At no time thereafter did the Defendant appear to appreciate that it would need a substantial extension of the time within which Lambert J had sought to have the residual issues in this litigation dealt with, and it never showed any sense of urgency in pursuing the question, even after it had told Brit that it would be making its applications.

Conclusion

1. 1. Considering the circumstances as a whole, and despite the fact that the Defendant is seriously out of pocket, I have concluded that it would not be just or proportionate to allow the proposed application to proceed, having regard to the passage of more than 3 years between the deadline and the application and the lack of a sufficient explanation for that delay.

1. 1. I should add that the passage of yet more time since this application was made has not been held against the Defendant. As I have said, there were regrettable delays within the Court for which the Defendant is not responsible.

1. For the reasons which I have set out, the Defendant’s application will be dismissed.

Avoiding procedural errors in civil litigation: webinar 17th February 2025: Booking details available here

This webinar looks at common mistakes in personal injury litigation and recent cases where things have gone wrong. It then looks at how mistakes can be rectified and how to make an application for relief from sanctions.

• The problem areas for personal injury litigation – where things go wrong and why
• Key time periods
• What can you do if things go wrong?
• Making an effective application for relief from sanctions