Costs News

29 November 2017
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Court office letter “meant defendant could ignore” budget deadline

A party that complied with a letter from the court office that said it had to file its budget only seven days before the case management conference (CMC), rather than the 21 days set down in the CPR, did nothing wrong and did not have to apply for relief from sanctions, the High Court has ruled.

Mr Justice Coulson – who becomes deputy head of civil justice next March when he joins the Court of Appeal – published a written ruling so as to highlight his concern that parties were abusing the courts’ tougher approach to compliance since Denton and “pour encourager les autres”.

In Freeborn & Anor v Marcal (t/a Dan Marcal Architects) [2017] EWHC 3046 (TCC), the Technology and Construction Court office wrote to the parties on 20 September 2017 to say that the CMC would be held on 24 November and that they should file and exchange costs budgets not less than seven days before.

The claimants’ solicitors served their costs budget on 2 November, the defendant’s on 16 November. The former then wrote to say that the budget should have been provided 14 days earlier.

Despite the defendant warning that he would seek costs if forced to apply to the court, the claimant submitted that there had been a “gross delay” in the service of the budget and that the defendant should be treated as having filed a budget comprising only the applicable court fees.

As a result, the defendant’s solicitor made a formal application for relief from sanctions, but Coulson J ruled that this was not necessary.

CPR 3.13 provides that “unless the court otherwise orders”, budgets must be filed and exchanged not later than 21 days before the CMC. Coulson J said: “I consider that the letter from the court office of 20 September 2017 amounted to the court ‘ordering otherwise’. It stipulated when the costs budget should be provided. The defendant was quite entitled to conclude that the court had ‘ordered otherwise’ than rule 3.13, and to rely on the content of the letter.

“It is immaterial that, on further consideration, it might have occurred to the defendant’s solicitor that the letter may have contained an error, and was referring to the old rule 3.13, which stipulated seven, not 21, days.

“A busy litigation solicitor is entitled simply to rely on the date specified in writing by the court office, rather than embarking on an investigation into whether or not the letter contained an error.”

Coulson J continued that, if he was wrong, he was in “no doubt” that relief should be granted.

The breach was not serious and significant – “no hearing has been lost and no delay to the costs budget process has in fact occurred” – the letter from the court was “the best possible reason for the delay”, and it was “plainly” just and reasonable to grant relief.

“There was no deliberate breach. There was at worst an inadvertent breach because there was reliance on a letter from the court office which, on this assumption, contained an error. In addition, the delays have caused no prejudice to the claimants, whereas there would be considerable prejudice to the defendant if he was not able to rely on his costs budget.”

Coulson J went on to observe that applications based on “minor procedural glitches” were on the rise, having all but dried up following Denton in 2014.

He said: “It is, of course, extremely important, post-Mitchell and post-Denton, for the parties to civil litigation to ensure that they comply with the CPR. Courts will be far less forgiving of non-compliance than they ever used to be.

“But that tougher approach must not be abused in the way that occurred here. Parties need to consider carefully whether the alleged breach of the rules is, on analysis, any such thing and, even if it is, whether it is proportionate and appropriate to require or oppose an application for relief from sanctions in all the circumstances of the case.”

He ordered the claimants to pay the defendant’s costs of and occasioned by the “unnecessary application”, which he summarily assessed at £1,300.

Richard Liddell (instructed by Healys) represented the claimants, and Thomas Ogden (instructed by Caytons Law) the defendant.

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