RELIEF FROM SANCTIONS AND COSTS BUDGETING: THE JUDGMENT IN MITCHELL -v- NEWS GROUP NEWSPAPERS IN FULL
The full transcript of the decision of Master McCloud in Andrew Mitchell MP –v- Express Group Newspapers  EWHC 2355 (QB) is now available.
The case was discussed, in outline in an earlier post, http://civillitigationbrief.wordpress.com/2013/08/11/litigatorswant-to-work-for-nothing-then-dont-file-your-costs-budget-on-time/ but that was on the basis of press reports and not the full judgment.
The action is a well-known defamation action. The key point for our purposes is that the claimant failed to file a file a costs budget in time. The claimant applied for relief from sanctions. Master McCloud refused that application. As a result the claimant’s costs were confined to court costs. However an important point is that the matter was initially listed for a case management conference at short notice. This was adjourned with costs against the claimant. The Master subsequently chased the claimant for a costs budget and this was filed the day before the adjourned hearing. (It should have been filed seven days prior to the hearing).
There were a number of key points dealt with in the judgment.
CONSTRUCTION OF THE SANCTIONS PROVISIONS
The Master rejected an argument that the rules should be construed to the effect that a claimant is only confined to court costs if a party never filed a costs form.
NOT RE-OPENING ORIGINAL DECISION AND SANCTION
The Master found that she did not have power to re-open her original decision dealing with sanctions (judgement at  EWHC 2179 (QB)) and went on to consider the issue of relief from sanctions.
RELIEF FROM SANCTIONS
There are some interesting observations in relation to the principles behind relief from sanctions. The Master recognised that this was a “vanguard” case. However:
“…. The question of relief from sanctions, nonetheless still engages “old fashioned” concepts of fairness, access to justice, including Article 6, and requirements for proportionality of response, in addition to adherence to the new overriding objective.”
THE NEW OVERRIDING OBJECTIVE
There is a consideration of the new overriding objective and its practical consequences.
- The new overriding objective is in marked contrast to the old one in form and, in my judgment, in substance. The court must now, as a part of dealing with cases justly, ensure that cases are dealt with at proportionate cost and so as to ensure compliance with rules, orders and practice directions. In that sense what we now mean by ‘dealing with cases justly’ has changed, or if it has not changed then at the very least there is a significant shift of emphasis towards treating the wider effectiveness of court management and resources as a part of justice itself. (For which see the quotation below from the 18th Jackson implementation lecture).
- It is a helpful illustration in this case to consider that, in order to find time in my diary to list this application for relief within any reasonable time, there being objections from Mr Mitchell’s side to a long wait, I needed to vacate a half day in my list which had been pre-allocated to deal with claims by persons affected by asbestos related diseases. There is an expedited list for such claims because life expectancies are often very short. The impact, therefore, of the admitted breaches in this case, was that the claims of those litigants which could have been listed in my diary were not listed, and in their place we have an argument about non-compliance with rules in this defamation claim.
- I am sure all claims are important to the parties, but the issue here is not the relative importance of the claims (ie this defamation claim versus the mesothelioma claims which were not listed), rather it is the right of other litigants to have a ‘fair crack of the whip’ where judicial and court resources are very limited, and the right not to be delayed while the courts dispose of matters which ought not to arise in the first place if rules are complied with. I mention this as a concrete example of the impact which breaches in one claim can have on other claims in the system: I do not wish to be misunderstood as saying that evidence of specific detriment to other litigants is necessary in any given case. Breach of rules may I think be assumed to risk impact upon other claims, and the above illustrates one mechanism as to how that occurs where an application for relief is required due to a breach.
- The Master of the Rolls in the 18th Jackson implementation lecture, which all professionals in the law should read, stated (and I note that much more of the lecture was quoted before me but I highlight this passage):
“… The tougher, more robust approach to rule-compliance and relief from sanctions is intended to ensure that justice can be done in the majority of cases. This requires an acknowledgement that the achievement of justice means something different now. Parties can no longer expect indulgence if they fail to comply with their procedural obligations.” (para. 27).
- I do not apply public lectures as if they were judgments, but I will take note of the policy position stated in the lectures. The task for me is to consider the rules and apply them against that policy backdrop to the facts of the case. Furthermore there are highly persuasive observations in Fred Perry v Brands Plaza Trading Ltd  EWCA Civ 224 (at para 3 of judgment of Jackson LJ) which make similar points as to the willingness of courts to grant relief.”
The breaches in the current case were the failure to engage in a discussion with the defendant as to budgets and budgetary assumptions and a failure to file a budget 7 days before the case management conference.
The importance of cost budgeting is emphasised in the judgment.
- It is clear that since budget consideration and proper case management are of great significance in achieving the policy objectives of cost control and rule compliance, breaches of these two rules are capable of being serious and of having a serious impact on cost and court time.
- In this instance there was absolute failure by the Claimant to engage in discussion of budget assumptions when asked and no attempt to apply for extra time or to ask the court informally for relief by email before running into time difficulties.
- There was from the court’s perspective silence from the Claimant, and it was merely the chance happening that this court reviewed the file the day before the hearing which led to the Claimant acting – when chased by me – to file one at the last minute the day before. We had an abortive budgeting exercise and have now had time taken for relief from sanctions at a separate hearing when the Claimant was not (at the last hearing) in a position to seek relief by producing evidence to support such relief. The breaches therefore, whilst simple to describe, are serious ones given the new emphasis on compliance.
There was some confusion on the claimant’s part as to whether the cost budgeting regime applies. The claimant being under the belief that the pilot scheme had ended the previous year, and being unaware that it had been extended to the 31st March 2013 up to the date of the introduction of the Jackson reforms.
THE EVIDENCE IN SUPPORT OF THE APPLICATION FOR RELIEF
The claimant’s solicitor was a small firm with a member of staff on maternity leave. The member of staff who dealt with cost budgeting had recently left the firm. The action involved a considerable amount of work. The Master noted that none of these difficulties were notified to the court and no application for relief had been sought. The costs budget was filed on 3pm 17th June the day before the hearing on the 18th June.
THE DECISION: RELIEF FROM SANCTIONS NOT GRANTED
The reasons given by the claimant’s solicitors were not (post April 2013) good reasons.
“The explanations put forward by the Claimant’s solicitors are not unusual ones. Pressure of work, a small firm, unexpected delays with counsel and so on. These things happen, and I have no doubt they happened here. However even before the advent of the new rules the failure of solicitors was generally not treated as in itself a good excuse and I am afraid that however much I sympathise with the Claimant’s solicitors, such explanations carry even less weight in the post Jackson environment.”
JUDICIAL TIME AN IMPORTANT FACTOR
“Judicial time is thinly spread, and the emphasis must, if I understand the Jackson reforms correctly, be upon allocating a fair share of time to all as far as possible and requiring strict compliance with rules and orders even if that means that justice can be done in the majority of cases but not all. Per the Master of the Rolls in the 18th Lecture quoted above:
“The tougher, more robust approach to rule-compliance and relief from sanctions is intended to ensure that justice can be done in the majority of cases. This requires an acknowledgement that the achievement of justice means something different now.”
BUDGETING AND PROCEDURAL UNFAIRNESS
The Master considered, carefully, the limited amount of notice the claimant had and whether there was procedural unfairness. However costs budgeting is an important element of litigation.
- I have given close consideration to the amount of time which the Claimant had to produce his budget. Was there procedural unfairness? On the face of it 4 days is short and even shorter when one considers that two days were weekend days. But having considered this carefully, because it was a point which troubled me, the view I have taken is that the parties were well aware that this was a case for which budgeting would be required from the start and that the mere fact that a date is set for a CMC is not supposed to be the starting gun for proper consideration of budgeting.
- Budgeting is something which all solicitors by now ought to know is intended to be integral to the process from the start, and it ought not to be especially onerous to prepare a final budget for a CMC even at relatively short notice if proper planning has been done. The very fact that the Defendants, using cost lawyers, were well able to deal with this in the time allotted highlights that there is no question of the time being plainly too short or unfairly so.
- I have also given close consideration as to the stated objective of PD 51D and notably the concept of equality of arms referred to there but my conclusion is that the objective stated there relates to decisions made as part of cost budgeting, rather than sanctions for failure to engage with the process at all. Moreover the new overriding objective and the identical wording in rule 3.9 highlight the emphasis to be placed, now, on rule compliance and one has to give effect to that.
THINGS WOULD HAVE BEEN DIFFERENT PRE-JACKSON
It was made quite clear that the position could have been different if this application had been heard prior to the 1st April.
The stricter approach under the Jackson reforms has been central to this judgment. It would have been far more likely that prior to 1/4/13 I would have granted relief on terms, and in view of the absence of authority on precisely how strict the courts should be and in what circumstances, I shall grant permission to appeal to the Claimant of my own motion, under CPR 52.3(6)(b), on the basis that the severe nature of the sanction which I have imposed in giving effect to the Jackson reforms to the overriding objective and to r.3.9 in its new form here are of necessity not backed by specific authority on point, and the risk of injustice if I were adopting too strict an approach is such as to provide ‘some other compelling reason’ for an appeal to be heard. It will be for the appeal court to determine whether such a strict approach is appropriate.
This judgment emphasises the:
1. The central important of costs budgeting.
2. The need for the parties to engage in the costs budgeting process.
3. The fact it is essential for the cost budget to be filed on time.
4. The major hurdles there can be to a relief from sanctions application.
- The judgment can be found in full here http://www.bailii.org/ew/cases/EWHC/QB/2013/2355.html
Discussions of relief from sanction applications can be found at:
The question of the Article 6 rights mentioned in the judgment are considered at
All of this, of course, emphasises the points made in the “Survival Guide” at