April 16, 2020

COVID-19 UK Disputes: New rules for obtaining time extensions in England and Wales

The judiciary is making it easier for parties to agree time extensions in some situations, and for courts to grant them when an order is needed. But have they done enough?

With the new Coronavirus disrupting business activity around the world, it is no surprise that the English courts have decided to relax their rules slightly and make it easier for parties to agree changes to a procedural timetable.  However, the way in which they have done this is curious, and seems to have unintended consequences. 

The general rules

Under the Civil Procedure Rules (CPR), the basic position is that some court deadlines can never be extended by agreement between the parties, while others can be extended by agreement for an indefinite period (CPR 2.11). 

However, in a third category of cases, where an express or implied sanction is attached to a court deadline, parties can agree to extend the deadline, provided that it has not already and that the extension will not put a hearing date at risk (CPR 3.8).  On these conditions, an extension of up to 28 days can be agreed.  (A time extension of this kind is generally referred to, misleadingly, as a 'buffer order', although it is not an order at all, but instead a substitute for one.)  If more time is needed, a party must apply for this from the court.

Temporary changes

Now the judiciary has decided to amend these rules, at least until 30 October 2020, by creating Practice Direction 51ZA.  At first glance, the new Practice Direction simply seems to grant parties the freedom to agree longer time extensions in certain circumstances, and that was probably the intention of the person who drafted it.  However, in reality it has a rather mixed effect, giving more freedom with one hand while taking it away with the other.  In particular, parties can now agree to extend time under CPR 3.8 by up to 56 rather than 28 days, but time extensions of the general kind, agreed under CPR 2.11, are also subject to the new 56 day rule.   This may not have been the drafter's intention, but it is what the wording of the new Practice Direction says, and parties have to take the wording at face value. 

Defences

A further oddity is that the specific rule that applies to filing a defence has not been changed by the new Practice Direction.  It remains the case that parties can agree to extend the time for doing this by 28 days and no more (CPR 15.5(1)).  That is because paragraph 3 of the new Practice Direction only says that "any extension of time … beyond 56 days requires the permission of the court."  It does not say expressly that any time extension for fewer than 56 days does not require the court's permission.  So reading of the Practice Direction literally, the 28 day limit regarding the filing of defences still stands.  This is particularly unfortunate given that defendants to new claims are among those worst affected by Covid-19 disruption, since they have less time than claimants to put together a case, including reviewing documents and speaking to key witnesses, as well as conferring with experts and lawyers.

Applications

Where parties fail to agree a time extension, or more time is needed than the parties may agree between themselves, the courts will initially deal with applications for an extension "on the papers" alone.  However, any order than the court then makes "must, on application, be reconsidered at a hearing".  This is helpful as far as it goes, and maybe a hearing can be organised relatively quickly given the courts' readiness to hold these by video or audio link (see another new Practice Direction, 51Y, and paragraph 5 of Practice Direction 51ZA).  However, there is no guarantee that an application that is refused will be considered at a hearing, because no order will have been made.  

That said, the courts will be as flexible as they can, granting time extensions and making similar orders more readily than they have done up to now.  Practice Direction 51ZA provides that: "In so far as compatible with the proper administration of justice, the court will take into account the impact of the Covid-19 pandemic when considering applications for the extension of time for compliance with directions, the adjournment of hearings, and applications for relief from sanctions" (para 4).

The broader picture

The Practice Directions just mentioned are not the only ones that have been issued recently to combat disruption caused by Covid-19.  The judiciary has also issued Practice Direction 51Z, staying certain possession proceedings, and put in place a number of additional measures to ensure that the courts run smoothly and prioritise urgent work.  But all these changes are relatively minor compared to what has been done in Spain or India, for example (see our global overview of the impact of Covid-19 on courts and arbitration across the world).   This reflects the English courts' confidence in their ability to cope in difficult circumstances, and in parties' and lawyers' ability to do the same.  However, more radical changes may be made at a later date if the recent ones prove inadequate.

Authors: Partner Ben Knowles and Professional Support Lawyer Giles Hutt