Legal briefing | |

How to avoid facing death by 1000 cuts (and other cautionary tales)

How to avoid facing death by 1000 cuts (and other cautionary tales)

Overview

In the latest decision in the very long-running Jalla v Shell litigation, the Court of Appeal has upheld the TCC's decision to refuse the claimants a further extension of time for serving "date of damage" pleadings ("DODPs") and supporting evidence for limitation purposes.

The decision, which results in only nine of the 28,000 claims asserted being able to proceed, is notable for two main reasons: 1) the court's application of the Denton v White test for relief from sanctions, even though the application had been brought in time; and 2) its heavy criticism of how the claimants' case had been run.  The judgment contains a few cautionary case management tales for practitioners.

Background 

As Coulson LJ noted, even the casual reader of BAILLI will be familiar with the background to this case.  The claims concerned an oil spill off the coast of Nigeria in December 2011 which occurred at a platform owned/operated by Shell companies in the Bonga oilfield.  The original proceedings were only commenced in December 2017, shortly before expiry of any six year limitation period. Consequently, the claims were beset by limitation issues from the outset, including with regard to the date on which the claimants alleged that the oil spill first affected their land.  At a hearing in March 2020, the TCC ordered the claimants to serve DODPs with supporting evidence by November 2020, in order to establish the date on which they said the oil spill first caused damage to their respective locations.  That deadline was later extended by court-endorsed agreement until 2 July 2021, but on that date, the claimants sought a further extension, relying on security issues in the territory in question, communications difficulties and the pandemic. The defendants objected, and the TCC refused to grant the extension. The claimants appealed the TCC's decision to the Court of Appeal.

 

Court of Appeal Decision

The TCC had considered whether the Denton relief from sanctions principles were relevant, but concluded that, because the extension application had been brought in time, there was no need to consider those principles further.  The Court of Appeal found that the TCC had not erred in exercising its discretion to refuse to grant the extension of time.  However, it found that, if it had been necessary to re-exercise the discretion, it would have reached the same decision, and would have done so by reference (at least by analogy) to the Denton principles, namely whether (i) the claimants' failure to meet the earlier orders of the court was serious and significant; (ii) there was a proper explanation for the delays; and (iii) in all the circumstances of the case it was appropriate to grant relief.  Coulson LJ found that applying these principles was a "useful and illuminating" way of assessing whether granting a further extension of time would be in accordance with the overriding objective, and was appropriate in this case where, just as if they were facing an unless order with which they had not complied, the claimants were throwing themselves on the mercy of the court in order to prevent the vast majority of their claims from coming to an end.

Applying the Denton three-stage test, Coulson LJ found that the draconian consequences of the TCC's refusal to grant the extension (i.e. the vast majority of the claimants not being able to pursue their claims) were justified:

(i) The claimants' failure to serve the DODPs and supporting material was serious and significant: no less than three timetables had already been set to accommodate the claimants' delays and the court found that the claimants were "seeking to rewrite all that had gone before"; within the 16-month period to July 2021, the claimants had only served DODPs to support 9 of the 28,000 claims; and any service of further DODPs after July 2021 would have jeopardised the date for trial of the limitation issues.

(ii) There was no proper explanation for the delays to date. Coulson LJ found that the witness statements from the claimants' solicitors about the delay were "more notable for what they omitted than what they said". In particular, their evidence omitted any sort of chronology or reference to specific dates and instead focused on generic difficulties of security and communication within the region.

(iii) The claimants "came up very short" on the third Denton criterion, namely all the circumstances of the case. In particular, they had not conducted their case efficiently and at proportionate cost, and had not complied with court orders. Coulson LJ noted that the claims had been bedevilled by problems, some arising from the limitation issues, and others form the way the case had been set up and run.  He noted in particular the claimants' "unconventional" attempts to avoid the defendants' limitation defences (the assertion of continuing nuisance and attempt to characterise the original claim as a representative action).

In a short supplemental judgment, Underhill LJ agreed with Coulson that the appeal should be dismissed, but did not rely on the Denton test in getting there.  He noted that, although the courts are rightly slow to make "disciplinary" orders on case management grounds which will prevent parties from having their substantive disputes determined, there were circumstances where such orders were justified. Those circumstances were not necessarily confined to cases where an order had been made explicitly by way of a sanction.  A number of factors in this case, particularly the absence of explanation for the delay and the admission that the claimants would not be able to comply with the order even if the extension was granted, meant it was right to refuse an extension even if the specific prejudice caused by the claimants' history of unexplained non-compliance with court orders was slight.

 

Comment

Behind the Court of Appeal's meticulously reasoned judgments, there is a real sense that it had lost patience with the claimants' "iterative" approach to this litigation in which they had sought to develop and change their case incrementally over time, sometimes in order to dodge procedural roadblocks, but without having obtained the evidence to support it.  Coulson LJ found that this was a claim "facing death by a thousand cuts".  This is therefore something of an extreme case, but it does demonstrate that the courts will not shy away from refusing to grant an extension of time even where the extension application has been brought in time, and where the refusal to extend time will sound the death knell for a claim. 

 

To read the full judgment in Jalla & Anor v Shell International Trading And Shipping co. Ltd & Anor click here.

GET IN TOUCH