The High Court has refused the government relief from sanction after the agency responsible for legal aid filed particulars of claim against a law firm out of time.
Mr Justice Globe (pictured) said the lord chancellor was wrong to argue Master Leslie had erred in his refusal to grant relief in September.
The decision is another twist in the post-Jackson era of courts getting to grips with parties failing to comply with deadlines or breaching court orders. A new period of leniency followed the Denton judgment in the summer, but this case shows the court will not show blanket tolerance of non-compliance.
The case goes back to interim payments issued by the Legal Aid Board (now the Legal Aid Agency) to Surrey firm Taylor Willcocks. The organisation disputed the work carried out and claims a total of £155,458 plus interest against the firm and its former partners.
In court, the defendant argued the breach was 'serious' as the claimant missed the 13 May 2014 deadline for serving particulars of claim. Service had still not been complied with by the hearing date of 4 June and purported service only took place on 26 September.
Although the delay did not affect any pre-existing court timetable, the delay in service prevented the start of the pleadings process.
The defendant's lawyers argued that the claim was 'unbelievably stale' - dating back at least 16 years - and they were now prejudiced in defending the claim after so long.
They submitted: 'The mere fact that a party has sensibly and proportionately agreed to extensions of time under a standstill agreement does not justify the other party failing to comply with the court rules.
'Once the claim was issued, the particulars of claim had to be served within the four-month period.'
In its submission, the government said Leslie was wrong not to accept a reasonable explanation for the default and wrong not to consider all the relevant circumstances of the case.
It added that the failure has had no impact on the efficient conduct of this litigation, and that it arose from a desire to save costs in the context of an atmosphere of agreeing extensions and the standstill agreement.
Globe said the judge was right to apply the Mitchell guidance on relief from sanctions, and he noted the subsequent Denton judgment did not overrule but tended to 'strengthen' Mitchell.
'The decision of the Master was one that he was entitled to reach,' he said. 'It was within the generous ambit within which a reasonable disagreement is possible. I am unable to find it was wholly wrong. It was a considered decision applying the Mitchell guidance correctly. It stands up to scrutiny even when studied alongside the later, amplified Denton guidance. The appeal must be dismissed.'
He also ordered that the government should pay the defendants' costs.