Civil Restraint Orders
Civil Restraint Orders are a useful tool for IPs when dealing with particularly litigious bankrupts and other litigants in person.
In this article, I will explain what a civil restraint order is, when they can be made, the different types of order, whether they can be appealed, and summarise how they can help IPs.
What is a Civil Restraint Order?
Under the Civil Procedure Rules 1998 ("CPR"), all parties are required to progress cases in accordance with the overriding objective. That includes ensuring that matters are progressed at a reasonable and proportionate cost, as well as ensuring that the court's time and resources are not wasted.
A Civil Restraint Order is one of the mechanisms that can be used by the Court, either on its own initiative or upon an application from other parties, to prevent a party from wasting court time and resources with persistent unmeritorious applications.
Normally, a Civil Restraint Order will be made against a litigant in person; this is because solicitors have a duty to the court, and therefore it will be a very 'bold' solicitor to continue to represent an applicant in making persistent applications!
If a Civil Restraint Order has been granted against a party, then that party will need permission from the specific Judge named in the order to continue to make any further applications. In practice, this means that they must apply to the named Judge for permission and that Judge will then consider the merits of their application. If permission is not obtained then the application is automatically dismissed, without any other party (e.g. the IP against whom the application is made) having to take any further action.
Civil Restraint Orders are by their very nature quite draconian and it is a very serious measure that can be taken by the court, and so once a decision has been made, the Civil Restraint Order must be approved by the Lord Chancellor before a sealed copy is issued.
When can a CRO be made?
Under the CPR if an application is totally without merit, this must be specified in the Order and the Judge should consider whether to make a Civil Restraint Order.
This applies to applications made under the Insolvency Act 1986 as well as applications made under the CPR. We do however need to follow the CPR application process if we have to make an application for a Civil Restraint Order.
A Civil Restraint Order can also be made where a party is repeatedly refused permission to appeal an earlier decision.
Types of Civil Restraint Orders
There are three different types of Civil Restraint Order, depending upon the seriousness of the litigant in person's conduct, so they are progressively more restrictive. The different types of Civil Restraint Order are:
- Limited Civil Restraint Order;
- Extended Civil Restraint Order; and
- General Civil Restraint Order.
The process of each Civil Restraint Order is set out under Practice Direction 3C of the CPR, however, a brief guide to the different stages is set out as follows:
Limited Civil Restraint Order
This is the least restrictive type of Civil Restraint Order, and is made in circumstances where two or more applications have been dismissed on the basis that they are totally without merit.
If a Limited Civil Restraint Order is granted then a party cannot make any further applications in those proceedings only, without permission of a specific Judge.
For example, if your (discharged) bankrupt is persistently making applications to prevent you taking possession of the family home, he could not make any further applications in the proceedings relating to the family home. However, if he had separate proceedings such as a personal injury claim, he could proceed with that claim without permission.
This type of order may be made by any Judge and lasts until the proceedings are concluded.
Extended Civil Restraint Order
This order may only be made by a more senior Judge, and the decision is binding upon the lower courts, in the usual way.
This is more extensive than the Limited Civil Restraint Order as it prevents a party from making any applications involving or related to, touching upon, or leading to the present proceedings. Some persistent applicants can get very creative in making their applications, for example, they may try to bring an action as breach of their human rights under separate proceedings, but still with the purpose of preventing the Trustee in Bankruptcy from proceeding with the sale of the family home. An Extended Civil Restraint Order prevents that type of application from being made.
This order made may be granted for a period of up to 2 years. It can be extended where necessary; however, no extension can be for more than 2 years at a time.
General Civil Restraint Order
Again this can only be made by a senior Judge and is binding on all lower courts.
This is the most restrictive order, and prevents a party making any application or claim at all, without permission. It is very rare for this type of order to be granted; therefore it will only be granted in extreme circumstances.
So, going back to the example describing discharged bankrupt opposing the sale of the family home, if he also had a Personal Injury claim, he could not bring that claim without permission, even though it is completely unrelated to the present proceedings. If the Judge deems that that application has merit than permission will be granted, but otherwise the bankrupt would not be able to make any similar application.
It applies where a party persists in making unmeritorious applications and an ECRO is not appropriate.
An example of where the Court has granted an extended civil restraint order occurred in the case of Mooson v HSBC Bank PLC T/as First Direct  EWHC 3308 Civ, which started as a repossession of a home by HSBC. Mrs Moosun made a variety of attempts to try to prevent the bank from taking possession of her home, added her children and pet dog as parties to the action, and had 12 applications dismissed as being totally without merit. This demonstrates the severity of behaviour for which the court will grant a General Civil Restraint Order.
Appealing a Civil Restraint Order
A party can apply for permission to vary or amend an order, and may also apply permission to appeal a Civil Restraint Order. However they must have permission from the Judge named in the order to make this application.
In practice this means that IPs do not need to incur costs unless a decision is made by the court granting permission in accordance with the Civil Restraint Order. As a Civil Restraint Order is generally only given in specific, considered circumstances, it is reasonable to wait to find out whether the court will progress or dismiss the appeal before incurring costs in dealing with it.
The court will endeavour to deal with applications against permission to appeal on paper only, which again saves the costs of arranging an attendance at court.
Uses for IPs
Whilst an undischarged bankrupt cannot commence legal action without permission of his Trustee in Bankruptcy, once he has been discharged, there is a risk that he could still proceed to make applications. Alternatively, they could have family members who make applications on their behalf, for example, a spouse.
IPs have no control over persistent applications being made, however once an application has been issued, you still need to defend it and take such action as is necessary. By getting a Civil Restraint Order, this limits the increased costs incurred by dealing with disgruntled litigants in person. These costs ultimately eat into monies available for creditors.
Under the CPR if a party owes costs under a costs order, then they cannot continue with applications unless the previous costs orders are paid, however there is no such provision in the Insolvency Act. Therefore there is a risk of litigants continuing to make applications without impunity.
Once a Civil Restraint Order is granted, any further applications may be ignored unless and until the court grant permission to the litigant in person to proceed. That means that you will only need to deal with meritorious applications, as opposed to repeated arguments on the same set of facts!
If you have any queries about Civil Restraint Orders, or any other general insolvency related query, then please do not hesitate to contact any member of the Business Support and Restructuring team.