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  6. Failure to comply with rules andor case management directions
Procedural matters relating to tribunal hearings

Failure to comply with a requirement of Part 6 of the rules and/or a case management direction

  1. Where a party has failed to comply with a requirement of Part 6 of the Rules (Adjudication by a Tribunal) or case management direction,32 the AT has the discretion to: 
    • draw adverse inferences, and/or 
    • where the failure relates to that evidence, refuse to admit the evidence and/or 
    • award costs.33 
  1. These powers can be exercised following an application from a party or on the AT’s own initiative. In exercising these powers, the AT must have regard to the legal duty to protect the public and the need for cases to be dealt with fairly and justly. 

  2. A “direction” is a case management direction issued under Rule 31. There is a distinction between a direction made by an AT and a request made by an AT, for example asking parties to be ready at a given time after a short adjournment. The tribunal clerk will record any direction given by the AT which would potentially trigger powers under Rule 32 and provide a copy to all parties so that there is clarity about the position. 

  3. A case management direction is binding on the parties and on any subsequent AT considering the case, unless the AT considers that: 
    • there has been a material change in circumstances, or 
    • it is not in the interests of justice for the direction to be binding.34 
  1. Pre-hearing compliance with the Rules and case management directions allows both parties the opportunity to prepare and then present their case efficiently and effectively to the AT, based on mutual and timely prior disclosure of their respective evidence. This allows all parties to appreciate, in advance of the hearing, what the real issues in the case are and allows for a good understanding of the extent to which they are disputed. Similarly, once the hearing is underway, compliance with directions made by an AT helps to ensure proper progress of the case.  

Deciding whether a case management direction should be binding

  1. The default position is that a case management direction is binding. However, the AT may find that a direction should not be binding where there has been a change of circumstances or there is another reason why it would not be in the interests of justice for it to be binding. In most cases, it will be immediately obvious that the directions should be binding, but in some cases careful consideration will be required.

    Deciding whether there has been a failure to comply with a requirement of Part 6 of the Rules and/or a case management direction 

    1. Before considering whether to exercise any of the powers available to it, the AT should first decide whether there is a requirement of Part 6 of the Rules or case management direction which has not been complied with. This requires the AT to look at whether, as a matter of fact, there was a Rule or case management direction made which required the party to carry out a particular action, by a particular date.  

    2. If so, the AT will then consider whether the action was carried out and whether this was done on time. In some cases, both parties will agree the facts, but in others it will be necessary for the AT to consider evidence and/or hear submissions before reaching a conclusion.  

    3. In considering the evidence available, the AT should have regard to any record of case management directions made at a pre-hearing meeting, listing teleconference, set out in correspondence and/or a record made by a tribunal clerk at a previous hearing. Whilst the AT may also be assisted by reference to any observations made by the MPTS case manager regarding compliance, whether there has been compliance ultimately remains a question for the AT to decide exercising its own judgment. 

    4. In cases where the AT finds that a party has not complied with a requirement of Part 6 of the Rules or a case management direction, the AT should consider all the circumstances to establish whether it amounts to a culpable failure. This will include, but is not limited to: 
      • What was the nature and extent of the failure to comply? 
      • Who was responsible for the failure to comply? 
      • What impact did the failure have on the other party, the AT and/or the progress of the case? 
      • What obstacles were faced by the party who failed to comply with the Rule or case management direction? 
      • What steps did that party take to overcome the obstacles? 
      • Was there anything else that might reasonably have been done to avoid the failure to comply? 
      • Did the party seek to minimise disruption by notifying the opposing party and/or the case manager of the problem? 
      • What reasonable steps could the party have taken to avoid failure to comply with a requirement of Part 6 of the Rules or a case management direction?  
    1. In considering the factors set out above, together with any other relevant factors, the AT will have regard to whether there were barriers to compliance outside the party’s control. 

    2. Where the AT concludes that there was a culpable failure, these factors will also be relevant when the AT is deciding whether it is appropriate to exercise one or more of the powers to draw an adverse inference, refuse to admit evidence and/or award costs. In cases where the AT concludes that there was not a culpable failure, they should not exercise these powers. 

    Drawing adverse inferences

    1. The guidance given here refers to the powers which are available to the AT following a failure to comply with:  
      • a requirement of Part 6 of the Rules; and/or 
      • a direction by the Regulator to undergo an assessment and/or a requirement by the Regulator to provide further information; and/or  
      • a case management direction.  
    1. It does not interfere with the AT’s ability to draw an adverse inference during the facts stage of the hearing. Further guidance on drawing an adverse inference during the facts stage is given in Part A of Section 3: AT hearings. 

    2. An adverse inference can be drawn against either party to the proceedings. The purpose of the power to draw an adverse inference is to ensure that a party cannot secure an unfair advantage by hindering the AT’s full and unfettered examination of the relevant evidence and issues in the case.  

    3. Where a party has failed to comply with a requirement of Part 6 of the Rules, a direction by the Regulator to undergo an assessment and/or a requirement by the Regulator to provide further information, or a case management direction, the AT may draw an adverse inference but only if this is appropriate in all the circumstances. The power to draw an adverse inference should be considered where a party has failed to provide evidence, leaving the AT unable to assess its quality and/or determine what it means in the context of the whole case. 

    4. To decide whether to draw an adverse inference, the AT should first decide whether there has been a failure to comply. If it concludes that a party has failed to comply with a requirement of Part 6 of the Rules, a direction by the Regulator to undergo an assessment and/or a requirement by the Regulator to provide further information, or a case management direction, the AT should consider if it amounts to a culpable failure. 

    5. Having considered all the circumstances, the AT should go on to reach a view on the motivation of the failing party: whether the failure was ill-motivated or made in bad faith. If the AT concludes that the failure occurred because the failing party had an ulterior motive in seeking to keep unfavourable material away from the AT, or otherwise conceal the truth from it, then it may be appropriate to draw an adverse inference. 

    6. The AT should be mindful that given the nature of the issue, it will almost always be the case that there will be no direct evidence as to the motivation of the failing party. The AT will therefore need to assess all the circumstances of the failure in the context of the whole case, to decide whether there was improper motivation. 

    7. Before drawing an adverse inference, as a matter of fairness, the AT should first consider whether there may be another explanation for the failure. It should be noted that a denial of the failure is not the same as an explanation for the failure. An inference against a party should only be drawn where it is the only reasonable inference to be drawn from the failure and there can be no other reasonable explanation. 

    8. To decide whether to draw an adverse inference, it may assist the AT to ask itself the following questions: 
      • Has a party failed to comply with a requirement of Part 6 of the Rules, a direction by the Regulator to undergo an assessment and/or a requirement by the Regulator to provide further information, or case management direction?  
      • What reason has been given for the failure?  
      • In all the circumstances, what conclusion is to be drawn about the motivation behind the failure? 
      • What was the nature and impact of the failure?  
      • Has the AT been able to make a full assessment of the relevant issues in the case or has the failure denied them access to some material evidence? 
      • Is an adverse inference the only inference to be drawn?  
    1. Where the AT decides to draw an adverse inference, they should apply this inference to the relevant issues in the case and consider it in the context of all the evidence available. The AT’s power to draw an adverse inference does not reverse the burden of proof and the AT should not find that an allegation is proved or not proved, or decide on impairment, based on an adverse inference alone.  

    Refusal to admit evidence

    1. An order to exclude evidence can be made against either party to the proceedings. The purpose of the power to refuse to admit evidence is to protect the fairness of the proceedings and to ensure that a party cannot gain an unfair advantage by manipulating the hearing process. 

    2. Justice demands that AT decisions are made based on evidence and in general terms, the AT will be best able to deliver justice where it has access to all the available evidence. Excluding evidence is a draconian step which should only be taken where necessary.  

    3. Where a party has failed to comply with a Rule or a case management direction relating to the admissibility of evidence, including deadlines for submitting it, the AT may refuse to admit the evidence, either by way of a preliminary ruling on a legal argument, or during the hearing. 

    4. To decide whether to exclude evidence, the AT should consider the following questions: 
      • Has a party failed to comply with a requirement of Part 6 of the Rules or a case management direction relating to the evidence in question?  
      • Does the party have a reasonable excuse for that failing? 
      • Has the party deliberately sought to disrupt the proceedings by the manner or timing of the production of the evidence? 
      • What issues in the case does the evidence go to? 
      • Will the other party be prevented from, or be significantly disadvantaged in, addressing the material issues raised by the evidence in question? 
    1. The AT must always ensure that the hearing is fair, but fairness involves fairness to both parties. Ensuring fairness may require the AT to balance the interests of one party against another. For example, allowing one party to present its case fully by admitting evidence served late in the proceedings, may conflict with the ability of the other party to answer the case or respond to the content of that evidence. 

    2. Before refusing to admit evidence, the AT should always consider whether there is any other mechanism which would allow the hearing to proceed fairly. This could include adjourning the case to allow the other party time to prepare, notwithstanding the fact that an adjournment may generally be undesirable.  

    Costs award

    1. An award of costs can be made against either party to the proceedings. The purpose of the power to award costs is to encourage parties to comply with any case management directions, to improve efficiency and to ensure cases are dealt with fairly and justly.  

    2. Where a party has failed to comply with a case management direction, and they have behaved unreasonably in the conduct of the proceedings, the AT may make an award of wasted costs against that party. 

    3. Usually, each party will bear their own costs. The AT’s decision as to the merits of an application for costs is separate from its findings in relation to facts, impairment and final measure. 

    4. Although the AT will hear and decide applications in relation to costs only at the end of a hearing, the behaviour which gives rise to an application should be highlighted immediately. Where a party has failed to comply with a case management direction and has engaged in unreasonable conduct, the other party should bring this to the attention of the MPTS, the MPTS case manager or the AT if the hearing has started. They should do so without delay.  

    5. If a party intends to make an application for costs, this should be communicated to the MPTS, the MPTS case manager or the AT immediately. An application for costs will only be appropriate where the other party has failed to comply with a case management direction, has engaged in unreasonable behaviour (to be determined by the AT) in the conduct of the proceedings and, as a result, time or money has been wasted (to be assessed by the MPTS case manager). 

    6. When put on notice that a party intends to make an application for costs, the AT should inform the other party of the steps that should be taken to prepare for a potential costs application, including gathering information relating to the sums wasted and the party’s ability to pay. This information will be relevant to the assessment of costs to be carried out by the MPTS case manager if the AT makes an order for costs. 

    7. The AT will consider any relevant evidence and submissions from both parties on the alleged failure to comply with Rules or a case management direction and the alleged unreasonable behaviour in the conduct of the proceedings. 

    8. “Unreasonable behaviour”35 may be either procedural, meaning it relates to the process, or substantive, meaning it relates to the issues in the case. For an application for costs, unreasonable behaviour relates to behaviour during the hearing itself, or in preparation for the hearing. The failure to comply may itself amount to unreasonable behaviour. 

    9. To decide if behaviour is unreasonable, the AT should consider all the circumstances surrounding the behaviour in question and may wish to consider the following questions, which are independent of one another: 
      • Has the party engaged in behaviour that is designed to frustrate the process? 
      • Has the party’s behaviour been uncooperative and obstructive in a way that goes beyond the limits of acceptability or fairness and for which there is no reasonable excuse? 
      • Has the party’s behaviour jeopardised the fairness of the proceedings? 
      • Has the party pursued a case which is known to be dishonest? 
      • Has the party engaged in the evasion of case management directions intended to safeguard the interests of justice, such as being deliberately conniving in making incomplete disclosure? 
    1. The question of what is reasonable is related to, and proportionate to, the purpose and objectives of the party. It is important that parties are not unduly fettered in the pursuit of appropriate objectives, for example the presentation of a proper defence or the protection of the public. 

    2. The fact that a particular course of action undertaken by a party did not result in an outcome that was favourable to the party will not of itself render that action “unreasonable”.  

    3. Delay, absent other features, is not enough to amount to unreasonable behaviour, but it may be an outward sign of such behaviour.  

    4. To decide whether to make a costs award, the AT will need to consider the following questions:
      • Has there been a failure to comply with a case management direction? 
      • Has the party who failed to comply acted unreasonably in the conduct of the proceedings? 
      • If so, should the AT exercise its discretion to make a costs award against the party who failed to comply? 
    1. The additional question as to whether the other party incurred any costs or wasted any time, which would not have been incurred or wasted but for the non-compliance, will be decided by the MPTS case manager if the AT makes an order for costs. 

    2. When deciding whether to make a costs award, the AT should not consider the paying party’s ability to pay. If a costs award is made, this factor will be considered at the assessment of costs stage, when the MPTS case manager will review any relevant evidence provided by the paying party. 

    3. Where an AT is deciding whether to make a costs award against a legal representative, they should make full allowance for the fact that it may be difficult for the representative to freely present their position, given the principles of legal professional privilege and client confidentiality. In these circumstances a costs award against a legal representative should only be made where – proceeding very carefully – the AT is satisfied there is nothing that could be said by the representative even if they were unrestrained which would allow them to resist the application.  

    Assessment of costs

    1. If the AT makes a costs award, an assessment of the amount of costs to be paid will be made by the MPTS case manager.  

    2. The receiving party has a period of 28 days from the conclusion of the proceedings before the AT to serve a schedule of wasted costs on the paying party and the MPTS case manager. On receipt of the schedule of wasted costs, the paying party must serve a written response to the schedule, together with details and evidence of their ability to pay within 28 days. The case manager has a discretion to vary this time limit in individual cases if it is just and fair to do so. 

    3. Costs will be assessed by the MPTS case manager based on the amount of the receiving party’s time that was wasted. The MPTS case manager will assess whether there are any wasted costs and use the Guidance for case managers on the assessment of costs in deciding the appropriate sum. In doing so, they will have regard to the paying party’s ability to pay.

    32 Issued under Rule 31.

    33 Rule 32.

    34 Rule 31(7).

    35 See definition in Ridehalgh v Horsfield and others [1994] Ch. 205 CA (Civ. Div.).