A BUDGET SERVED A DAY LATE IS A “TRIVIAL” ERROR: WAIN –v- GLOUCESTERSHIRE COUNTY COUNCIL  EWHC 1274 (TCC) CONSIDERED
It was made clear in Mitchell that the courts should not concern themselves with “trivial” breaches, however what was meant by “trivial” was never defined. In Wain –v- Gloucestershire County Council Judge Grant, sitting as a judge of the High Court, held that a costs budget served a day late was “trivial” and an application for relief from sanctions was allowed.
The action was a claim for damages against a number of defendants following flooding of the claimant’s property. It proceeded in the Technology & Construction Court.
THE LATE SERVICE OF THE COSTS BUDGET
The fourth defendant was one day late in filing her costs budget. Instead of having been served seven clear days before the first CMC and costs management hearing, it was in fact served six clear days before the hearing.
The claimant brought this to the attention of the court prior to the CMC. The fourth defendant made an oral application for relief from sanctions.
THE CLAIMANT’S ARGUMENT
The claimant relied upon the Mitchell decision. It argued that the fourth defendant’s breach could not be classed as trivial and that no good reason had been advanced as to why the costs budget was not served on time.
THE RELEVANT AUTHORITIES
The Judge began by considering the recent authorities on relief from sanctions:
- The Court of Appeal did not define what is meant by the adjective “trivial” in Mitchell. It may well be said that there was no need to do so, the word having a plain meaning. In his judgment in Aldington & 133 Others v Els International Lawyers LLP  EWHC B29, His Honour Judge Oliver Jones QC, sitting as a judge of the High Court at the Birmingham Civil Justice Centre, drew attention to the interrelation between the nature of the non-compliance which was engaged, and the consequences of non-compliance: see paragraph 32 of his judgment.
- It is perhaps also appropriate to refer to a short part of the paper delivered by Lord Justice Jackson at the recent conference held on 21st March 2014 by the Civil Justice Council on the impact of the Jackson reforms. In paragraph 3.9 of that paper, having referred to the decision of the Court of Appeal in Mitchell, Jackson LJ wrote: “Nevertheless parties should not be allowed to exploit trivial or insignificant breaches by their opponents, as Leggatt J stated in Summit Navigation Ltd & others v Generali Romania Asigurare Reasigurare SA (2014) EWHC 398 (Comm)”.
THE JUDGE’S FINDING: THE BREACH WAS TRIVIAL
The judge concluded that the breach in this case could be classed as trivial:
- I have come to the conclusion that this breach is, when properly analysed, and having regard to all the circumstances of the case, a trivial breach. I do so for the following reasons:
I. The delay was of one day in the context of a time period or frame of seven days.
II. That seven-day period, namely for filing or serving a costs budget, is usefully to be compared with the three-day period for service of an application notice before its hearing: see CPR rule 23.7(1).
III. On behalf of the claimant, Mr Woolgar made it entirely plain that the claimants have not suffered any prejudice by reason of the delay of one day. He went on to make the point, which I accept, that while that is the position in this case, it does not necessarily follow that a like position would obtain in another case where there was a similar delay of one day.
IV. Here, the parties are each perfectly able to deal with the topic of costs management at today’s hearing, notwithstanding the fact that the fourth defendant served her costs budget with only six clear days rather than seven clear days before the hearing.
V. Unlike the position which obtained in Mitchell, in this case no disruption to the court’s timetable has been caused by the delay on the part of the fourth defendant in serving her costs budget. The only additional burden placed upon the court has been the need to take some time during today’s hearing to consider the point, and also for me to spend some time both before the commencement of this hearing and during the short adjournment to prepare this ruling.
VI. I refer to and rely on what the Court of Appeal stated in paragraph 40 of its judgment in Mitchellwhere, having stated that it might be useful to provide some guidance as to how the new approach should be applied in practice, the Master of the Rolls held:
“It will usually be appropriate to start by considering the nature of the non-compliance with the relevant rule, practice direction or court order. If this can properly be regarded as trivial the court will usually grant relief provided that an application is made promptly. The principle de minimis non curat lex, namely that the law is not concerned with trivial things, applies here as it applies in most areas of the law. Thus, the court will usually grant relief if there has been no more than an insignificant failure to comply with an order: for example, where there has been a failure of form rather than substance; or where the party has narrowly missed the deadline imposed by the order, but has otherwise fully complied with its terms”.
In my judgment, this is an instance where the relevant party, here the fourth defendant, has narrowly missed the requirement to file and serve a costs budget seven clear days before the hearing of this case management conference and costs management hearing.
VII. I note also in that paragraph the reference by the Master of the Rolls to a situation where there has been no more than an insignificant failure. The introduction of and reference to the concept of significance in my judgment resonates with the point made above, namely the relevance of the interrelation between the breach, ie the non-compliance, and its consequences.
SHOULD THE CLAIMANT HAVE TAKEN THE “MITCHELL” POINT?
David Grant J also highlighted the difficult question most litigators are now faced with
- It is perhaps permissible for me also to observe that at the recent conference held by the Civil Justice Council, attended by over 200 delegates and being oversubscribed to a like extent, many participants and court users filed papers in advance of that conference, all of which either have been or are about to be posted on the Civil Justice Council’s website. They repay reading. One of the many points made at that conference was a concern that parties often find themselves in the unattractive position of having to make what is now colloquially referred to as a “Mitchell point” and/or have to make an application for relief from sanctions in respect of a breach or non-compliance which is subsequently found to be trivial and/or inconsequential and/or insignificant. Recent experience in this court has shown that many practitioners are mindful of those difficulties.
He then went on to consider the cause of the problem:
- It is perhaps also permissible for me to make the further observation that perhaps part of the problem in cases involving late filing of costs budgets is that the consequences for so doing as now stated in CPR rule 3.14 are extremely severe. Whether that should remain so is of course a matter for the rules committee. However, experience in this court which, together with the Mercantile Court in Birmingham, has had the opportunity to deal with the process of costs management over a number of years, reveals that during those years, experienced and competent practitioners invariably have been able to deal with the process of costs management at the first case management conference and/or costs management hearing in circumstances where one party or more was late in filing its costs budget by a day or more.
- As Mr Woolgar submitted in the course of his oral submissions a good deal depends on the context. Much depends on the particular circumstances of the case, and in particular whether the parties are able to deal with the material contained in the costs budgets on the day in question, and whether or not any disruption to the court’s timetable has been or will be occasioned by such breach.
- Such considerations become particularly relevant in those cases where the court does not make a costs management order at the first case management conference and/or costs management hearing. Those occasions are not infrequent. They occur, for example, when as a result of the case management decisions that are made at the first case management conference, in particular as regards the numbers and categories of expert witnesses and the estimated length of hearing, it becomes necessary and/or appropriate for the parties to file revised costs budgets. In such circumstances an initial delay of one day or more in filing a costs budget can become almost entirely irrelevant or immaterial on the subsequent occasion when the court in fact makes a costs management order.
SUMMARY: BETTER SAFE THAN SORRY
- The prudent litigator will always serve their costs budget on time.
- A breach of one day may be found to be trivial