INACCURATE TIME ESTIMATES CAN LEAD TO COSTS PENALTIES: A REMINDER

There is another aspect of the judgment in Finvest Holdings Sarl -v- Lovering [2021] 3WLUK 579 HHJ Pelling (sitting as a High Court Judge) that merits examination. The judgment emphasised the need for accurate time estimates.

THE CASE

The judge gave judgment in relation to an application for relief from sanctions.  He observed that the time estimate had been inaccurate.

2.  I directed at the outset that the application to set aside should be heard first since, if that succeeded, all the other applications fell away. Although the time estimate for the hearing of these applications was 2½ hours, that was plainly inadequate since argument on the first application was completed only at 4.15 p.m. on last Friday. Given that factor, I decided to adjourn at that point since plainly judgment could not be completed by 4.30, and certainly the remaining applications could not be determined if they had to be. The failure to give accurate time estimates has been the subject of a practice note only very recently signed by Cockerill J as Judge in Charge of the Commercial Court, and by me in relation to the London Circuit Commercial Court. I intend to revisit the plainly inadequate time estimates when the question of costs of these various applications comes to be decided.

THE CONSEQUENCE IN RELATION TO COSTS

On the facts of this case it was not appropriate to penalise for the inaccurate time estimates.

57.  The issue that I need to deal with very briefly concerns the length of time that this hearing took in the end. The time estimate that was provided by the parties was 2½ hours, starting at two o’clock last Friday. In the result, this hearing required a further half day to complete so that the time estimate was under half the time that was in the end required for it to be completed it being now 1.10 pm. This is flagrant breach of the practice note to which I referred at the start of my first substantive judgment.
58.  The solution that I invited counsel to address was whether or not I should cap the recoverable costs to those incurred down to the end of Friday afternoon. Sorely tempted as I am to make that order, because the failure to give realistic time estimates remains an endemic problem in the London Circuit Commercial Court and it is a practice that can no longer be tolerated, I will not make that order on this occasion for these reasons. First, I accept Mr Cleaver’s submission that the whole, or the vast majority, of the time taken today has been taken up with the relief from sanctions application for which the second claimant is responsible and has been ordered to pay the costs; secondly, I accept that it was not apparent, at any rate down to the commencement of the hearing on Friday, or perhaps late on Thursday afternoon, what the basis of the relief from sanction application was going to be, or even whether one was going to be made, and the letter of 2 March, whilst indicating an application might be made, contained no particulars of the basis on which it was to be advanced. In those circumstances, I accept it would be difficult for the defendant to form a view as to the likely duration of that application.
59.  In those circumstances, I conclude that the balance of fairness on this occasion lies in me taking no further action. All parties should be warned, however, that I am unlikely to be as generous in the future if time estimates are inaccurate