THE SITUATION WHERE A PARTY SERVES ITS SCHEDULE OF COSTS LATE: CLAIMANT PERMITTED TO RECOVER COSTS, BUT THIS IS A POINT TO WATCH

In Tribe v Elborne Mitchell LLP (Costs) [2021] EWHC 1252 (Ch) Deputy Master Raeburn considered the appropriate approach when a party serves a schedule of costs late.  Although the claimant was allowed to recover costs I report this case primarily to remind litigators that the schedule should be in 24 hours prior to the hearing and that a litigant is exposed to danger in every case where the lawyer fails to do so.

THE CASE

The Deputy Master was considering issues of costs after hearing an application. The claimant had failed to file its schedule timeously and the defendant argued that this failure to comply meant with the rules meant that the claimant had no entitlement to costs.

THE DECISION

The Deputy Master decided that, although the schedules had been served late, the defendant had suffered no obvious prejudice and the claimant was entitled to costs – on the indemnity basis.

1. 1. As a preliminary point, the Defendant contends that the Claimant is not entitled to rely on its statement of costs; it having been produced by the Claimant at this stage (i.e. after the relevant hearing) as it should have been served 24 hours prior to the hearing itself.

1. 1. It would appear that the Defendant’s argument is based upon CPR PD 44, paragraph 9.5(4) and 9.6 which requires a statement of costs to be filed at court and served on the opposing party, not less than 24 hours prior to the hearing.

1. 1. It is clear that the Claimant did not comply with that Practice Direction. A form N260 statement of costs has been filed at court together with the Claimant’s written submissions some days after the date of the hearing as there was insufficient time to hear argument on costs at the hearing itself. The fact that costs submissions were to be dealt with in this manner could not have been known or otherwise anticipated by the parties and there is no suggestion from the Claimant that there was a reasonable excuse for its failure to comply. I therefore proceed on the basis that paragraph 9.6 applies and that such failure must be taken into account by the court.

1. 1. I am however mindful of the guidance given by Neuberger J (as he then was) in MacDonald v Taree Holdings [2001] 1 Costs L.R. 147 on the correct approach to be adopted by the court when it is faced with a failure of compliance of this nature and in particular that the court’s reaction should be “proportionate”. The correct approach where there has been a mere failure to comply without aggravating factors is to first consider:

“what, if any, prejudice has that failure to comply caused to the other party? If no prejudice, then the court should go on and assess the costs in the normal way. If satisfied it has caused prejudice, the next question is: how should that prejudice best be dealt with?.”

1. 1. As to whether there are any aggravating factors in this case, none have been submitted as being present by the Defendant’s Counsel and in all the circumstances I do not find any to be relevant to the Claimant’s failure to serve its statement of costs in accordance with the Practice Direction.

1. In its written submissions in reply, no prejudice has been argued by the Defendant as having been suffered by it as a result of the Claimant’s failure. The Defendant has been able to make submissions on the Claimant’s statement of costs and submits that “it is in any event manifestly excessive in a number of respects“. I am therefore satisfied that the Defendant has indeed had an opportunity to make out its case in opposition to the statement of costs and that it has not suffered prejudice in the manner contemplated in MacDonald v Taree Holdings. Given my finding as to the lack of prejudice, I shall therefore proceed to determine and assess costs in the normal way.