Costs News

09 February 2017
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Claimant granted relief over late filing of budget

The High Court has granted relief from sanctions after a claimant failed to file its costs budget on time due to its solicitor’s illness. It found that, though the delay had disrupted the case management conference, imposing a sanction would be disproportionate.

According to a Lawtel report, Intellimedia Systems Ltd v Richards & Ors concerned a claim over a breach of directors' duties.

The defendants filed their budget ahead of a case management conference, but the claimant told the defendants that the solicitor involved had fallen ill and that it would file its costs budget shortly, which it did after the time limit had expired.

The report said that it was only after the defendants suggested the claimant apply for relief from sanction as a result of the late filing that the claimant did so.

Although the defendants were sympathetic for the ill solicitor, they stressed that someone had to take responsibility for the proceedings. They also reminded it that its budget discussion report was due and that they had not received comments on their own budget. They later highlighted that the claimant still had not supplied a bundle, was not in a position to file a proper budget and had failed to respond the defendants' letters about it. The defendants said that, in those circumstances, the case management conference should be adjourned and only the application for relief be dealt with.

Mr Justice Warren found that the claimant had acted promptly in applying for relief because it had issued the application the morning after the ill partner had been made aware of the breach arising from not filing the claimant's costs budget in time. Although the application for amendment should have been made earlier, its timing was not a matter for serious criticism.

“The reality was that, even if the application had been on time, it might still have resulted in the postponement of the case management conference,” the Lawtel report said. “The claimant had not used it as a tactical manoeuvre to adjourn the case management conference for its own benefit.”

Going through the Denton test, the judge found that the breach was not trivial – it had risked disrupting the case management conference and the conduct of the litigation and caused additional work for the defendants – while the partner’s illness did not excuse him from acting professionally. He should have either delegated the responsibility or sent the client elsewhere.

Moving to the third stage of the test, Warren J found that if the claimant had filed the late documents on time, although some of the outstanding issues might have been agreed, they were typically the sort of matters a master would have resolved.

The most important question was whether the late costs budget caused the loss of the case management conference. Had the application for amendment not been made, the conference could have proceeded on most of the important issues between the parties including timetabling and disclosure. At worst, the application would have been stood over.

“In all the circumstances, it was appropriate to grant relief from sanctions. Although the claimant had been inefficient, the sanction was not a proportionate one in the instant case. As the claimant had been inefficient, it was ordered to pay the costs of the instant hearing on an indemnity basis.”

 

This post was posted in ACL e-Bulletin

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