Conflict, Clausewitz & the Court of Appeal

Of politics, schoolmasters and judges: Paul Marshall reflects upon the recent Court of Appeal decision in Denton v T H White and the fallout from the decision in Mitchell v News Group.

If one settling a pillow by her head, Should say, “That is not what I meant at all That is not it, at all”

T S Eliot, Prufrock


The day I arrived at Sandhurst, some hundred yards away a sergeant major of the Welsh Guards bellowed: “You’ll have to move a bit faster on those crutches, Mr Smith!” Mr Smith limped on a bit faster, his broken leg in plaster. Disconcerted, I mentally noted the milk of human sympathy and kindness not in spate. But there was no reason to expect sympathy or kindness. That is not the currency of the Army, an institution that exists, uniquely, for the purpose of the latent or actual application of mass violence. At a low level, the stuff of armies is cohesiveness (from mutual confidence) and a certainty and predictability from obedience to command. These enable soldiers routinely to deploy in circumstances of extreme danger. It is at the level where the issue is the end to which armed force is directed that uncertainty in purpose and effect are apt to be found, recently amplified by those who frame policy failing to recognise the difficulties inherent in the use of force and the limits on its utility, perhaps lacking relevant experience. Little thought was given to the consequence of successfully achieving the military aim in Iraq.

In Afghanistan the problem lay in identifying a stable military objective consistent with an achievable political purpose. The sudden increase in regional influence of Iran in response to the Islamic State and the need to stabilise Syria demonstrate that the outcome of a policy may be the exact opposite to that intended.

A four-fold injustice

The Court of Appeal’s decision in Mitchell v News Group Newspapers [2013] EWCA 1537 was an injustice other than in the formal sense of that expression. It was an injustice in four ways: first, an overly rigid application of the poorly re-modelled rule on applications for relief from sanctions was made to operate as a kind of rule-based forfeiture provision, the effect being disproportionate to the default. It is against similar effects in other contexts that the common law has long set its face.

Second injustice: broken eggs but no omelette

Second, while those of authoritarian bent welcomed the decision as a game changer to ginger up the dilatory and the incompetent, the game was not changed in the way hoped for. Instead the policy, to the dismay of its framers, had immediate and far-reaching effects the very opposite of those intended. What happened was, first, the “triviality” test propounded in Mitchell was elevated to an “exceptionality” test rejected by Sir Rupert Jackson in his report and not to be found in the rule. Second, the Court of Appeal’s designation of the factors under CPR 3.9(1)(a) and (b) as of “paramount importance” (loc. cit.[36]) gave these a salience warranted neither by the terms of the rule nor by the “overriding objective” under CPR 1. The corollary was to discount the requirement for the court to consider all the circumstances of the case. Third, it resulted in disproportionate penalties for infringements that had little effect on the conduct of litigation. Fourth, the prescribed strict approach led to uncooperative behaviour between parties, a dramatic increase in satellite litigation and inconsistent approaches in giving effect (or not) to the new policy: Denton v T H White and Ors [2014] EWCA Civ 90 (4 July), at [21].

Thus a policy intended to promote the disciplined conduct of litigation produced a surge in satellite litigation, overwhelmed the Masters’ corridor with applications, raised insurance premiums, and increased the cost and risk of litigation to litigants and to the public as a whole. The decision led to the expenditure of vast sums in costs and likely led to the closure of some firms, the game not being worth the candle. If the effectiveness of a given policy is tested by reference to its stated objectives, the only sensible way of validating any policy, this was not a success. Many eggs were broken but the omelette remained invisible.

Third injustice: a diminished judicial function

Third, Mitchell diminished the role of judges under CPR r 3.9 to little more than that of schoolmaster, judicial discretion to do justice “in all the circumstances”, the essence of the judicial function, seemingly cut-down. Even those judges with well-developed authoritarian instincts and a preference for voguish “robustness” over painstaking nuance, from time to time must have found their attenuated role unappetising, if not indigestible. Speaking perhaps for many, in AEI v Alstom [2014] EWHC (Comm) 430 Andrew Smith J cited Mitchell: “once it is well understood that the courts will adopt a firm line on enforcement, litigation will be conducted in a more disciplined way and there should be fewer applications under CPR 3.9. In other words, once the new culture is accepted, there should be less satellite litigation, not more” (loc. cit. [48]); he reluctantly concluded: “… I must balance this against my conclusion that as between the parties it is a disproportionate response and unjust to refuse an extension and strike out the claim form. The emphasis that the Court of Appeal has given to enforcement of the CPR in order to encourage procedural discipline drives me to conclude that I should grant Alstom’s application and refuse that of AEI. […] Therefore, despite my conclusion about fairness between the parties and what would be a proportionate response to the noncompliance, I allow Alstom’s application and refuse that of AEI.”

Clausewitz on conflict

At a high level of abstraction, Mitchell raises a question about judicial decisions made with the purpose of affecting the future behaviour (culture) of a class of persons (instrumentalism), subordinating emphasis on doing justice in the particular case to wider distributive economic, and therefore political, considerations – a judicial role largely foreign to the common law. It also throws into relief the age-old problem of the solution to one perceived problem merely giving rise to different ones. Gibbon observed that under the Republic the proliferation of laws became more burdensome than the vices to which these were addressed. These are beyond the present discussion. What is nevertheless of great interest is how startlingly different was the effect of Mitchell from that intended. It is upon this that Clausewitz may shed some light. Clausewitz (1780-1831), known almost solely for a misquotation, is probably less read than Thomas à Kempis (“be not angry that you cannot make others as you wish them to be…”). A pity, because his reflections on his unique experience are profound in their universality, unaffected by being of a kind of warfare that pre-dated the industrial revolution. His originality was that the treatise that posthumously became On War was written, not as a utilitarian military work or manual, but as a non-prescriptive and ethically non-judgmental analysis of the nature of war as a social and political phenomenon. Clausewitz set out to analyse the nature of absolute war and the reasons why, in practice, actual war was different from the abstract. War is “an act of force, and there is no logical limit to the application of that force” but is not “the action of a living force upon a lifeless mass… but always a collision of two living forces.” Neither side is wholly in control of its actions and each dictates to the other, as they seek to outdo each other their efforts escalate. “A clash of forces freely operating and obedient to no law but their own eventually reaches the extreme, absolute war, that is to say, absolute violence ending in the total destruction of one side by the other.” But war is always influenced by external political, economic, technological and social considerations. A variety of elements within opposing societies, the will of the leadership – that may or may not conform to objective realities – and political motives, will determine the military objective and the effort to be expended. “War is merely the continuation of policy by other means” and thus “there can be no question of a purely military evaluation of a great strategic issue, nor a purely military scheme to solve it” (a truth not universally acknowledged since).

Other factors tending against escalation to the extreme include uncertainties, errors, accidents, technical difficulties and the effects of these on decisions, morale and actions. Clausewitz grouped these factors, that distinguished real war from war on paper, under the concept he called friction. The military machine is basically very simple and therefore in principle easy to manage; but it is one comprised of individuals, each of which has the chance to delay things, or make them go wrong. Danger and physical exertion aggravate the problem. This tremendous friction is everywhere in contact with chance, and that brings about effects that cannot be measured. “Action in war is like movement in a resistant element. Just as the simplest and most natural of movements, walking, cannot easily be performed in water, so in war it is difficult for normal efforts to achieve even moderate results. Friction, as we choose to call it, is the force that makes the apparently easy so difficult.”

The “friction” in litigation

No great imaginative leap is required to apply some of these observations to the propensity of litigation to tend to escalate. A former head of a magic circle law firm once drily commented that his experience of litigation was that the winner was commonly the party that spent most money. Intentionally provocative or not, cost is a reasonable, if not exact, analogue of the effort expended by parties in seeking to overcome and outdo the other side, a tendency inherent in the adversarial process as a stylized form of conflict. Factors that operate against the tendency to ever greater effort and expenditure, including will and resources (and now, intentionally but synthetically, budgeting), are those that Clausewitz would have grouped under “friction”. In this respect the nature of the process of litigation as between the parties is different from its ultimate purpose for the court – the duty of the parties under CPR 1.3 remaining something of a conundrum. Relatedly, Clausewitzian thinking has further application because Mitchell offered litigants a potentially decisive encounter before trial. If, by being denied relief from sanction, a party may be deprived of costs in the litigation (as in Mitchell) or else be seriously disabled, say by being precluded from relying upon important admissible evidence, or from advancing an alternative case, so that conduct of a trial can be skewed, then the value to be attributed to such an encounter is correspondingly enhanced. Given that foreseeable prospect, parties’ efforts to exploit the opportunity presented by applications for relief from sanctions, and a corresponding absence of co-operation, should have caused no surprise. In an enthusiasm for strict discipline, that seems to have owed such intellectual antecedents as it had more to Friedrich der Grosse than to Fifty Shades of Grey, the stakes had been dramatically raised for those upon whom the lash fell, but the possible effects of the policy upon behaviour not fully evaluated.

Fourth injustice: increased risk and chance

An important fourth way in which Mitchell worked injustice was that it increased litigation risk, and thus uncertainty. If not the lodestar, then a major object of the litigation process is to facilitate predictability in the outcome of a dispute. Pleadings, disclosure and witness statements all serve that end. If the outcome of litigation is seen by the protagonists to be made more uncertain, then the perceived utility of litigation as a satisfactory and fair means of settling disputes is correspondingly eroded. By de-coupling the factors made “paramount” from the wider circumstances of the case, Mitchell introduced a new additional element of chance. If there is a chance of the wheels falling-off between the commencement of a claim and its final determination, a risk exists the dimensions of which cannot easily be evaluated and therefore managed, because of the sheer volume of contingencies that may trigger sanctions. The role of chance is increased, tending to make that which should be straightforward and predictable more difficult. It is no surprise that embedding in the concept of procedural justice an intentional policy with those effects commanded less than universal support. In the face of the resultant headwind, some of the difficulties were recently swept away by the welcome decision in Denton v T H White (above). It was explained that there had been misunderstanding on the part of judges and practitioners that if the breach for the purposes of CPR 3.9 was not trivial, and there was no good reason for it, an application for relief would automatically fail (loc. cit. [31]). Whether in fact there had been such misunderstanding is moot (q.v.Mitchell loc. cit. [58] and more generally, perhaps, Orwell Politics and the English Language). A new requirement is that the relevant breach be “serious or significant” rather than “not trivial”, and a third factor is the requirement to take into account all the circumstances of the case. But the weight to be given to this was not agreed, Sir Rupert Jackson dissenting. Oddly, Denton shifts both the incidence and dimension of costs risks under CPR 3.9 to a respondent (loc. cit. [41]-[43]) and now raises the difficult question of when it is reasonable to resist. The enthusiasm for a disciplinary role for the court in punishing mistakes is both puzzling and novel. In Abercrombiev Aga Rangemaster [2013] EWCA 1148, Underhill LJ referred with approval to Bowen LJ’s dictum in Smith v Cropper (1885) 26 ChD 700 that “[c]ourts do not exist for the sake of discipline, but for the sake of deciding matters in controversy” as a warning against adopting “too schoolmasterly” an approach in the desire for proper case management. That the utility of such an approach to regulating conduct may be open to question is supported by consideration of how the strict application of overly-prescriptive rules has lost favour in other areas. Long ago the FSA, as it was, abandoned prescriptive rule-based regulation under FSMA in favour of principles focused on outcomes. Similarly, the strict application of the Money Laundering Regulations became so costly to UK businesses that in 2005 the Corporation of London and the ICAEW reported that the UK’s competiveness was approaching tipping-point. A “risk-based approach” was substituted that will become the EU norm. Criminal penalties for infringements against all but the core  requirements will likely be abolished under the new ML Regulations, these having been found to elicit a defensive, rather than engaged, response from those subject to them.

Outcomes rather than tripwires?

There is an argument that, rather than tinkering with rules, micro-management and an enthusiasm for strict enforcement, with attendant risk and a tendency of these, paradoxically, to amplify uncertainty and to increase cost, the ends of justice might be better served by adopting a principles-based framework for the conduct of litigation. That might entail establishing consensus as to in what the proper – and ethical – conduct of litigation consists, focused on outcomes, including proportionality and cost; but the difficulty of doing so should not deter. If such an approach might reduce risk and the role of chance, including the contingent cost of genuine mistakes and errors that may reflect a difficult process of human interaction, rather than mere incompetence or sloth, that would be a good thing.

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Paul Marshall

Practising commercial and company law, Paul is a member of the Chancery Bar Association and an editor of Butterworths Corporate Law Service.