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Company barred from giving evidence in court due to "substantial delay" in providing witness statements

Out-Law News | 28 Jan 2014 | 5:00 pm | 2 min. read

Civil court litigants must comply with court orders or "face the consequences", an expert has said, after the High Court barred a company from giving evidence about a particular issue at trial after it failed to exchange witness statements within a reasonable time.

Richard Twomey of Pinsent Masons, the law firm behind Out-Law.com, said that the case was a "strong reminder" of how seriously the courts have begun treating deadlines since Lord Justice Jackson's reforms to civil court costs and procedure came into force in April 2013.

"The message coming through is clear: comply with the procedural timetable or face the consequences," Twomey said. "In circumstances where a party cannot comply, it needs to tell the court as soon as possible and request an extension of time."

The company, KPM Marine, had brought a claim for breach of a confidentiality agreement and passing off against Professional Powercraft, a company incorporated under the laws of Brunei. Part of its case hinged on Powercraft being 'legally extinct', with no entitlement to litigate in the UK.

The court ordered KPM to file and serve a witness statement setting out the facts, and a skeleton argument setting out its legal case, by 25 October 2013. Powercraft was ordered to serve a statement in response. By December 2013, when Powercraft applied for an extension of time to prepare its statement, KPM had not filed either of the necessary documents. It later proposed a revised timetable, which Powercraft agreed to, but did not comply with this either. Instead, it produced a draft statement which said that it had been unable to comply with the order because Brunei's company registry would not release the necessary information without additional documents from Powercraft.

In his judgment, Mr Justice Turner described KPM's behaviour as "yet another example of a litigant treating an order of the court as if compliance were an optional indulgence".

"The delay in this case of nearly three months is serious and the resultant breach cannot be categorised as trivial," he said.

"Furthermore, there is no evidence before the court of any good reason for the delay. It was not open to [KPM] to allow weeks and weeks to pass without taking positive steps to comply with the order on the basis that further disclosure, for which no formal application had been made, was awaited ... The fact that, at the eleventh hour, [KPM has] volunteered a proposed consent order extending the time for service of witness statements falls far short of salvaging [its] position," he said.

In April 2013, a new requirement was introduced into the Civil Procedure Rules (CPR) which stated that part of the 'overriding objective' required cases to be dealt with "at proportionate cost" as well as justly. This new requirement is intended to control the costs of activity that is disproportionate to the value, complexity and importance of the claim. As part of the new objective, non-compliance with practice directions, court orders and the CPR is dealt with strictly by the courts.

KPM applied for relief from sanctions imposed under the CPR, namely a bar on it calling any witnesses in respect of Powercraft's existence and entitlement to litigate in the UK. The judge refused this application and noted that there was "no realistic prospect that such relief would ever be granted" following the guidance set out in the recent Court of Appeal decision against the MP Andrew Mitchell.

"In the light of the Mitchell decision, the courts have taken a consistently robust approach to the late service of witness statements," he said.