The claimants commenced this claim on 28 March 2013 seeking damages of approximately £2 million against the defendant for professional negligence. The defendant defended the claim and retained Shakespeares Legal LLP as its solicitors. The trial was listed for 7 days floating in a 5 day window commencing on 23 June 2014. As the trial approached, the defendant was unable to put Shakepeares in funds to pay for counsel to represent it at the hearing. Shakepeares ceased to act and came off the record on 12 June 2014.

Mr Scott Robinson, a director of the defendant thereafter took over the conduct of the litigation on its behalf. On 23 June, he submitted an “Opening statement” for the purposes of the trial. On Friday 27 June, the court informed the parties that the trial would start on Monday 30 June.

On 30 June, the defendant did not appear before the trial judge, HH Judge Seymour QC. A letter had been sent to the court by Shakespeares which said:

The attached letter from Mr McLaughlin was also dated 30 June. It was addressed to Shakepeares and said:

The statement of fitness for work or “sick note” issued by Mr Robinson’s GP recorded that:

On 30 June, the judge dismissed the application for an adjournment, struck out the defence under CPR 39.3, entered judgment for the claimants and assessed the damages at £2,135,676. He also awarded costs to the claimants on the standard basis up to 21 June and on the indemnity basis thereafter; and a further sum of £75K for beating the claimants’ Part 36 offer.

On 3 July, the claimants’ solicitors sent a draft order recording the judgment. It is not clear on the evidence when Mr Robinson first saw the draft order. In the judgment given by HH Judge Seymour QC which is the subject of the present appeal, the judge concluded that Mr Robinson must have become aware of his decision of 30 June on a date between 3 and 8 July.

The sealed order was received by Mr Robinson on 18 July. On that date, the defendant applied to set aside the order pursuant to CPR 39.3(2) on the basis that Mr Robinson (being the only one of the two directors of the defendant capable of representing it) had been certified as unfit to attend trial on 30 June. This application was dismissed by the judge on 31 July 2014. In addition to the sick note that had been before the judge on 30 June, the defendant also provided the following further information in support of its application: (i) the explanation contained in Mr Robinson’s third witness statement which included: “I spent the week waiting for the trial to take place and start and frankly the delay and the worry together with having to continue to deal with my day to day job created an unbearable situation which was having an effect on my business and personal life at home. The stress it was putting me under was unpalatable”. He added at para 13: “I spoke to Dr Adams at Stamford Bridge Surgery over the telephone first thing on the morning of 27 June 2014 and made an appointment to see my GP that same day at 5.10 pm. The prognosis over the phone was that I should not be working for at least a week as my own personal wellbeing was beginning to suffer and it was confirmed in person at my appointment.”; (ii) a letter from Dr Adams dated 25 July: “I am writing this letter in my capacity as general practitioner at My Health where Mr Robinson is registered….. I can confirm that Mr Robinson was not fit to attend court w/c 30 June 2014. I am unaware of any reason that would make him unfit to currently attend court.”; and (iii) a further letter from Dr Adams dated 30 July:

CPR 39.3 provides:

It was common ground that the third of these conditions was satisfied. But it was in issue whether the first and second conditions were met. The judge held that the defendant (i) did not have a good reason for not attending the trial on 30 June and (ii) had not acted promptly once it had found out about his decision of that date. The defendant says that the judge was wrong on both points.

The general approach to be adopted in relation to applications under rule 39.3(3) is not in dispute. In Bank of Scotland Plc v Pereira [2011] 1 WLR 2391 Lord Neuberger MR said:

The judge gave two reasons for holding that the defendant did not have a good reason for not attending on 30 June 2014. First, he said that the defendant had not shown that Mr McLaughlin (the company’s other director) could not have represented it. Secondly, the medical evidence as to Mr Robinson’s unfitness to attend was “wholly insufficient”. Mr Burgess challenges both reasons.

Mr Burgess submits that the evidence before the court was that Mr Robinson was the only director of the defendant company who had dealt with the claim (throughout its 18 months duration). The other director, Mr McLaughlin, was not in a position to deal with the claim in the absence of Mr Robinson and could not have taken his place as advocate or witness. Mr Burgess submits that there was no evidential basis for the judge to conclude (as he did at para 5 of his judgment) that it would have been open to Mr McLaughlin to represent the defendant at the trial “if he so chose”.

That is clearly right. This was a complex case involving many documents which was estimated as likely to last about 7 days. There was no evidential basis for concluding that Mr McLaughlin could have represented the defendant at this trial or that he had any knowledge about the details of the case. I did not understand Mr Lazarus to contend otherwise.

Mr Lazarus says, however, that the fact that Mr McLaughlin was not in a position to act as the defendant’s advocate and principal witness at the trial was not a good reason for the defendant not to attend at all, whether by Mr McLaughlin or anybody else. If Mr McLaughlin had attended, he could have applied for an adjournment on the ground of Mr Robinson’s incapacity and he could have assisted to make suitable arrangements for Mr Robinson if an adjournment was refused. If Mr Robinson was well enough to attend his GP on 27 June, it is difficult to see why he could not have attended court on 30 June to give instructions to Mr McLaughlin at least in relation to his mental capacity to be the defendant’s advocate and/or witness. Instead, the defendant was wholly unrepresented at the trial, thereby avoiding the need to address difficult questions that the judge would no doubt have asked Mr McLaughlin if he had attended.

The difficulty facing Mr Lazarus is that the issue is whether Mr McLaughlin could have represented the defendant at the trial, not whether he could have represented the defendant in order to make an application for an adjournment or whether he could have attended court for some other purpose. The language of rule 39.3(5)(b) is “a good reason for not attending the trial”. The judge clearly understood this. That is why he expressed himself in the way that he did in para 5. So too in para 21 where he said that he was not persuaded that there was a good reason for the defendant “not attending the trial on 30 June”. The judge’s understanding was correct. CPR 39.3 is headed “Failure to attend the trial”. It makes provision for what may happen if a party does not attend for the purpose of conducting his case at the trial. The court may proceed in the absence of the party who does not attend or it may strike out the claim or defence of the party who does not attend. The rule is not concerned with applications for an adjournment of the trial. Thus when the judge went on to say that the company could have attended by Mr McLaughlin, he meant that it could have attended the trial by Mr McLaughlin for the purposes of conducting its defence.

In my view, there was no basis on which the judge could properly conclude that the defendant could have attended the trial by Mr McLaughlin.

As we have seen, the medical evidence was that (i) Mr Robinson had been assessed by a doctor 3 days before the trial; and (ii) the doctor had determined, on the basis of that assessment, that in her professional opinion, Mr Robinson was suffering from stress caused by a combination of business and family matters (ie not simply because of the litigation) and was not fit to attend court in the week commencing 30 June. The judge nevertheless dismissed this evidence as wholly insufficient on the grounds that it would or might have been “helpful” if certain additional information had also been provided, namely (i) why Mr Robinson could be considered not fit to attend court although he was fit enough to attend the surgery for an assessment; (ii) whether Mr Robinson returned for a further assessment on 4 July for a further assessment of the condition; and (iii) whether Mr Robinson had a history of stress.

The judge applied the guidance given by Norris J in Levy v Ellis-Carr [2012] EWHC 63 (Ch) at para 36, which was approved by this court in Ketley v Brent [2012] EWCA 324. Norris J said:

Mr Burgess relies on Pereira to submit that the judge adopted an unduly rigorous approach in his assessment of the sufficiency of the medical evidence. He also relies on what I said in Estate Acquisition and Development Ltd v Wiltshire [2006] C.P. 32, [2006] EWCA Civ 533 at para 25:

The judge said at para 28 that the fact that, according to Mr Robinson, the diagnosis was made by the GP over the telephone and in advance of any physical examination “does not encourage confidence in the accuracy of the diagnosis”. He also made the point at para 20 that Dr Adams did not elaborate to any significant extent on her view that Mr Robinson was not fit to attend court in the week commencing 30 June.

His assessment of the overall effect of the evidence before him appears in para 21:

Mr Lazarus submits that the judge was right to apply the stringent observations of Norris J in Levy and was entitled to conclude that the scant medical evidence was wholly insufficient for the defendant to discharge the burden of proving that there was good reason for its failure to attend on 30 June. Mr Lazarus also points out that the evidence adduced by the defendant is inconsistent as to the cause of the stress from which it was said that Mr Robinson was suffering. The initial sick note referred to “family stress”. At para 12 of his third witness statement, Mr Robinson said that “the delay [in the litigation] and the worry together with having to continue to deal with my day to day job created an unbearable situation” and put him under “unpalatable” stress. In his letter to Shakespeares dated 30 June, Mr McLaughlin said that Mr Robinson was obliged to attend the GP “due to the arising stress and pressure of the pending proceedings”. Finally, in her letter dated 30 July 2014, Dr Adams referred to stress “due to a combination of business and family affairs”.

I recognise that an appellate court should be slow to interfere with a decision of a lower court on the question of whether a litigant had a good reason for not attending a trial. Such a decision is a fact-sensitive evaluation made in the light of all the circumstances. It is the kind of decision that an appellate court will only strike down for reasons analogous to those which justify interfering with an exercise of discretion. But in making that assessment, the judge must have regard to the guidance given in Pereira and Estate Acquisition and the need, when applying rule 39.3(5)(b), to seek to give effect to the overriding objective of dealing with cases “justly” and to comply with article 6 of the European Convention on Human Rights (“the Convention”). This is particularly important where, as in the present case, the party has a reasonable prospect of success at the trial. In such a case, the court should usually not adopt a very rigorous approach to the question whether the litigant has shown a good reason for not attending.

At first sight, it might appear that there is a conflict between the Pereira guidance (which is similar to that given in Estate Acquisition) on the one hand and the guidance given in Levy on the other hand. Nothing that I say in this judgment should be interpreted as casting doubt on the guidance given in Levy. Generally, the court should adopt a rigorous approach to scrutinising the evidence adduced in support of an application for an adjournment on the grounds that a party or witness is unfit on medical grounds to attend the trial. In Denton v TH White Ltd [2014] EWCA Civ 906, [2014] 1 WLR 3926 at para 89, Jackson LJ emphasised the general undesirability of adjourning trials in the context of applications under CPR 3.9. I entirely agree with what he said.

But I accept the submission of Mr Burgess that there is a material distinction between an application under rule 39.3(3) and an application for an adjournment of a trial. If the court refuses an adjournment, there will usually be a trial and a decision on the merits, although the unsuccessful applicant will be at a disadvantage, possibly a huge disadvantage, by reason of the absence of the witness or the party himself. Despite their absence and depending on the circumstances, it may still be possible for the disadvantaged claimant to prove the claim or the disadvantaged defendant to resist it. I accept that, in some cases, the refusal of an adjournment will almost inevitably lead to the unsuccessful applicant losing at trial. That is a factor that must be borne in mind when the court exercises its discretion in deciding whether or not to grant an adjournment. But if the application to set aside a judgment under rule 39.3(3) fails, the applicant will have had no opportunity whatsoever to have an adjudication by the court on the merits. This difference between an application under rule 39.3(3) and an application for an adjournment of the trial is important. Although it has not been articulated as the justification for generally adopting a more draconian approach to an application for an adjournment than to an application under rule 39.3(5), in my view it does justify such a distinction. It follows that the judge should have applied the Pereira guidance rather than the Levy guidance in so far as there is a difference between the two.

Although the judge correctly referred to the Pereira guidance, it seems to me that he lost sight of it when he came to consider whether there was a good reason for Mr Robinson not attending on 30 June. He made no mention of it when he came at para 21 to make his overall assessment of whether a good reason had been established. At para 18 he said that the fact that the GP’s initial diagnosis was made over the telephone and in advance of any physical examination “does not encourage confidence in the accuracy of the diagnosis”. But he rightly went on to consider the rest of the medical evidence, including the opinion expressed by the doctor after she had seen Mr Robinson. The unequivocal effect of all the evidence was that, in the opinion of the doctor, Mr Robinson was suffering from stress and on that account he was not fit to attend court during the week commencing 30 June. The judge did not say in terms that he rejected this opinion. He expressed misgivings about it. I accept that it would have been better if the evidence had been more comprehensive in the respects suggested by the judge. The evidence might not have sufficed to persuade the judge on the basis of the Levy guidance to accede to an application to adjourn the trial on 30 June. But that was not the application that the judge had to deal with on 31 July. He had already refused the application for an adjournment on 30 June and there was no appeal from that decision.

Having identified shortcomings in the defendant’s evidence, the judge should have reminded himself of the general need not to adopt a very rigorous approach and to have regard to the overriding objective of dealing with cases “justly” and in accordance with article 6 of the Convention. This was particularly important in a case where (i) the claim was for approximately £2 million; (ii) the defendant had a defence which had reasonable prospects of success; and (iii) it must have been apparent that a refusal to set aside the earlier decision would be likely to have very serious consequences for the defendant. The judge knew that this was a small company. In my view, he adopted too rigorous an approach to his assessment of the medical evidence. If he had kept the Pereira guidance in mind, he could not reasonably have rejected the doctor’s opinion. If the sick note had stood alone, I do not consider that, even in the context of an application under rule 39.3(3), the judge could have been criticised for dismissing it. But there was evidence that the doctor’s opinion was based on an examination of Mr Robinson. The opinion expressed in the sick note was confirmed by the doctor in her letters dated 25 and 30 July. I do not consider that there is much force in the point made by Mr Lazarus about the different causes to which the defendant attributed Mr Robinson’s stress. The differences do not cast doubt on the medical opinion that Mr Robinson was suffering from stress and unfit to attend the trial. More importantly, the judge did not take these inconsistencies into account in reaching his decision.

I would, therefore, reject both reasons given by the judge for holding that the defendant did not have a good reason for not attending the trial on 30 June. I wish to emphasise that it does not follow that any assertion by a party, supported by a sick note, that it did not attend the trial for reasons of ill health will be accepted by the court. Far from it. Neither the overriding objective of the CPR nor article 6 of the Convention requires the court to adopt such an approach. But for the reasons given in Pereira and Estate Acquisition and which I have elaborated above, the court should not generally adopt too rigorous an approach in its assessment of the evidence adduced in support of an application under rule 39.3(3).

I accept that the court should not overlook the position of the opposing party (the claimants in the present case). If the court is satisfied that the conditions in rule 39.3(5) are met and that it is right to exercise its discretion to grant the application, it will often be appropriate to allow the application on condition that the applicant pays the other side’s costs and pays a sum on account of those costs within a short period.

In Regency Rolls Ltd v Carnall [2000] EWCA Civ 379, Simon Brown LJ said that the test of promptness is “not that an applicant has been guilty of no needless delay whatever, but rather that he has acted with all reasonable celerity in the circumstances”.

The judge dealt with this issue as follows:

Mr Lazarus submits that the application was very straightforward and Mr McLaughlin knew enough about Mr Robinson’s incapacity to instruct Shakespeares about it on the day of the trial. So there is no reason why the defendant could not have made an application within at most a working day or two after 3 July i.e. by 6 or 7 July. Even if Mr Robinson’s input was required, Mr Lazarus points out that he was apparently well enough by about 6 July to spend ten days visiting clients which he prioritised over making a prompt application. It has never been explained why Mr Robinson could not have given Mr McLaughlin instructions by telephone to make a prompt application or why the defendant could not have re-instructed Shakespeares to make the application. In short, Mr Lazarus submits that the defendant has failed to establish that it made the application “with all reasonable celerity in the circumstances”

Mr Burgess responds by saying that Mr Robinson was the only director capable of handling the claim on behalf of the defendant. He was signed off work until Friday 4 July and he left the office on client appointments on Tuesday 8 July. He, therefore, had at most one working day in the office to make the application.

I accept that there is some force in the points made by Mr Lazarus. He has raised questions which it is not possible to answer on the material before the court. But in my judgment, the judge adopted too draconian an approach to the question of promptitude in the context of this case. Even if the defendant did not act with alacrity by taking between 10 and 15 days to file the application, the judge failed to have regard to the statement in Pereira that the court should not, at least in many cases, be very rigorous when considering the applicant’s conduct. He did not mention the Pereira guidance in paras 15 and 16 of his judgment. Having regard to that guidance and the fact that (i) this was a complex and very substantial claim and (ii) the period of time taken to file the application was only a matter of days, I do not consider that, if the judge had applied the Pereira guidance, he could reasonably have concluded that the defendant failed to act promptly.

The first ground of appeal is that the judge failed to apply the correct legal test for determining whether the defendant had a good reason for not attending the trial. In his oral submissions, Mr Burgess relegated this ground of appeal to his other grounds on which I have found in his favour. In these circumstances, it is not necessary to deal with the first ground of appeal.

It is not in dispute that, if an applicant succeeds in crossing the three hurdles set out in rule 39.3(5), he must go on to persuade the court to exercise its discretion to set aside the order. As Lord Neuberger said in Pereira at para 25, if each of the hurdles is surmounted, it “would be a very exceptional case where the court did not aside the order”. In my view, there is nothing exceptional about this case to justify depriving the defendant of the opportunity of defending this substantial claim in circumstances where it has satisfied all three of the conditions prescribed by the rule for setting aside the order.

For the reasons that I have set out above, this appeal must be allowed.

I agree that this appeal should be allowed for the reasons given by my Lord, the Master of the Rolls. Specifically on the issue of “good reason” for non-attendance at trial, it is apparent that the judge was wrong in that he did not adopt a “less rigorous” approach when evaluating the sufficiency of the reason given for Mr Robinson’s non-attendance in the context of the application to set aside as per Pereira and Estate Acquisition. A critical analysis of the judgment below does not support the argument advanced by Mr Lazarus that the judge found that the defendant had failed to establish a genuine reason for non-attendance. However, for the avoidance of doubt, I do not read the line of authority referred to above relating to the court’s approach in “set aside” applications to require the judge at first instance to suspend belief or apply other than the civil standard of proof to determine any dispute as to the “genuine” or “honest” reason for non-attendance at trial pursuant to CPR 39.5 (b) (See Brazil v Brazil [2002] EWCA 1135 at [12]).

I agree that the appeal should be allowed for the reasons given by the Master of the Rolls.