Extent of attempt to comply with unless order is relevant when considering relief from sanctions (Poly-clear v Mezowicz and others)

When determining an application for ‘relief from sanctions’ under Rule 38(2) following a failure to comply with an unless order, a tribunal should take into account the party’s attempt to comply with the unless order, to analyse the extent of the failure in material compliance, when weighing up the interests of justice. When there is a dispute about whether there was sufficient compliance with the order in the first place, and, if it is found that there was not, the party intends to make an application for relief from sanctions, a possible approach is for the tribunal to consider both the issue of compliance and relief from sanctions at the same time, according to the EAT.

Polyclear v Mezowicz and others (UKEAT/0183/20/VP)

What are the practical implications of this case?

This judgment offers some insights as to the mechanics of how unless orders operate, particularly in the context of an unless order that a party says was impossible to comply with.

Key points to take from it are that:

• the mechanism by which relief is granted if the application under Rule 38(2) is granted is the setting aside of ‘the order’, which must mean the original unless order, with the consequence that once the unless order has been set aside there cannot have been material non-compliance, and so the automatic strikeout is treated as not having occurred
• in order to avoid one judge essentially reconsidering another judge’s decision, the Rule 38(2) hearing does not involve the employment judge determining whether the stage two decision (that there had not been material compliance) was incorrect
• however, an important aspect of making the Rule 38(2) decision is determining the extent to which there was an attempt at compliance with the unless order
• because the effect of the earlier decision is that there had been material non-compliance with the unless order, it might be argued that this is a decision that finally determines a claim, or part of a claim, and so would be susceptible to an application for reconsideration under Rule 70
• this raises the prospect of applications being made both under Rule 70 for reconsideration of the compliance decision and under Rule 38(2) for relief from sanction which could give rise to some difficult issues of case management
• in a case in which there is a real issue about whether there has been material compliance with an unless order, and where, if it was to be decided that there had not been material compliance, the party in default has made it clear that an application for relief from sanction will be made (such an application being required by the rules), it may be wise for the judge to consider whether one hearing should be fixed to deal with both the compliance and Rule 38(2) decisions, so that one judge can determine both whether there has been material compliance and, if not, whether relief from sanction should be granted.

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