LITIGATORS:WANT TO WORK FOR NOTHING? THEN DON'T FILE YOUR COSTS BUDGET ON TIME
This post deals with the extremely draconian penalty imposed on a litigant who fails to file a costs budget on time.
CPR 3.13 and 14 deals with the duty to exchange costs budgeting.
Filing and exchanging budgets
3.13 Unless the court otherwise orders, all parties except litigants in person must file and exchange budgets as required by the rules or as the court otherwise directs. Each party must do so by the date specified in the notice served under rule 26.3(1) or, if no such date is specified, seven days before the first case management conference.
Failure to file a budget
3.14 Unless the court otherwise orders, any party which fails to file a budget despite being required to do so will be treated as having filed a budget comprising only the applicable court fees.
WHAT THIS MEANS
This is not difficult to decipher. If the costs budget is not filed in time then the party in default is confined to recovering only the applicable court fees. Nothing else. The defaulting party will have to rely for relief from sanctions to persuade the court to order otherwise.
HOW IS THIS BEING INTERPRETED IN PRACTICE?
All the signs are that this is going to be construed strictly. A similar scheme has been run for some time in defamation actions. In a libel action that Andrew Mitchell MP is bringing against the Sun the costs budget was filed late. Mr Mitchell’s solicitors applied for relief against sanctions but this was refused by Master McLoud.
RELIEF NOT GRANTED
According to the report in The Lawyer the Master said:
There is no evidence before me of particular prejudice to Mr Mitchell arising from my order: it would be for him to demonstrate that and it would be wrong of me to make assumptions about the wording of his CFA agreement with his solicitors which may or may not mean that my sanction affects him financially or in terms of legal representation.
“Even if it did affect him financially and as to representation, there are many claimants who manage without lawyers and it could not be said that he would be denied access to a court more than is the case for others if they have to represent themselves.”
EXPLANATIONS NOT SUFFICIENT
The explanations put forward by the claimant’s solicitors involved the small size of the firm and overwork at the office. The Master said.
“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.”
DEALING WITH CASES JUSTLY HAS AN EXTRA DIMENSION
The Master went on to state:-
“The court must now, as part of dealing with cases justly, ensure that cases are deal 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.”
SUMMARY: MISS THAT BUDGET DATE AND YOU DON’T GET PAID (AND WILL PROBABLY GET SUED).
There is tremendous uncertainty about the precise way in which the courts are going to deal with relief from sanctions after the rule changes introduced on the 1st April 2013. See previous posts at
FURTHER LINKS IN RELATION TO THE MITCHELL CASE AND COSTS BUDGETING
I have been unable to find a transcript of the decision (but will post once I obtain one). This summary is based on the useful report in The Lawyer http://www.thelawyer.com/news/practice-areas/litigation-news/high-court-caps-plebgate-libel-budget-to-court-fees-for-andrew-mitchell-mp/3008297.article
Part 3 is available at http://www.justice.gov.uk/courts/procedure-rules/civil/rules/part03#3.14
Guidance on Form H is http://www.justice.gov.uk/courts/procedure-rules/civil/pdf/update/new-precedent-h-guidance.pdf and the form is