Kershaw v Roberts & Anor

This appeal raises a number of issues concerning claims brought under Part 8 of the Civil Procedure Rules (“CPR”); and, in particular, the case management and costs management of such claims.

The Appellant Claimant appeals the judgment and order of His Honour Judge Philip Hughes of 30 January 2014, in which he found that an earlier hearing in this Part 8 claim was not a case management conference (“CMC”) and therefore the Respondent Defendants were under no obligation to serve a costs budget seven days in advance of it. It had been contended by the Claimant that that hearing was the first CMC and, as the Defendants had not served a costs budget seven days before, their costs budget should be restricted to applicable court fees. The Claimant renews that submission in this appeal, raising the general issue of whether the first hearing in a Part 8 claim (alternatively, the first directions hearing in such a claim) is necessarily a CMC, triggering the obligation to serve a costs budget. Those issues are important in this claim – but generally, for reasons to which I shall come at the end of this judgment, they are likely soon to be of historical interest only.

In this judgment, all references to “Rules” are to specific rules in the CPR unless otherwise indicated.

Miss Jane Jones died intestate on 3 November 2011, the Claimant Ian Kershaw having lived with her for some years before her death. In these proceedings, the Claimant claims reasonable financial provision from her estate, under section 1(1) of the Inheritance (Provision for Family and Dependents) Act 1975 (“the 1975 Act”). The Defendants are the deceased’s sister, who is her personal representative; and her son who is, subject to this claim, the beneficiary under the intestacy. I am not concerned with the substance of the claim – and nothing I say in this judgment should be taken as offering any view on the merits – but I have read the evidence lodged and some of the correspondence, which shows that there are significant issues of fact as to the Claimant’s relationship with the deceased. It also discloses acrimony between the parties, which, sadly, is only too common in cases such as this.

The claim was issued in Taunton County Court on 13 September 2013, using the Part 8 procedure. A claim under the 1975 Act must be brought as a Part 8 claim (Rule 57.16(1)).

On 23 September, the county court sent out to all parties a “Notice of Directions”, in the following terms:

“TAKE NOTICE that a Directions Hearing will take place on 21 November 2013 at 3pm at Taunton County Court, The Shire Hall, Taunton, Somerset TA1 4EU

When you should attend

30 minutes has been allowed for the Directions. Parties to attend 1 hour beforehand for discussions and negotiations.”

On 22 October, a second notice was sent out by the court, headed, “Notice of Hearing”, which indicated that the “Directions Hearing” had now been scheduled to take place by telephone.

In the meantime, the Defendants acknowledged service on 15 October, indicating they intended to defend the claim; and, on 28 October, Cyfraith JL Law went on the record as acting for them.

CPR Rule 3 Section II, so far as material to this claim, provides as follows:

“Application of this Section and the purpose of costs management

3.12

(1)

This section and Practice Direction 3E apply to all multi-track cases commenced on or after 1st April 2013….

(2)

The purpose of costs management is that the court should manage both the steps to be taken and the costs to be incurred by the parties to any proceedings so as to further the overriding objective.

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.”

On 14 November 2013, the Claimant served by fax a costs budget in Precedent Form H through to a two-day hearing, in the sum of £63,600 excluding VAT and success fees. No discussions between the parties preceded service of that document. The Defendants in response prepared and served their own costs budget, in the sum of £42,500. That was apparently sent by post on 19 November, but that letter was not received before the hearing. A copy was sent through to Counsel for the Claimant who appeared at the telephone hearing, just minutes before that call.

The telephone hearing on 21 November took place before District Judge Prigg (“the Taunton hearing”). I do not have a transcript; but it is uncontroversial that at that hearing, for the first time, the Claimant through Counsel submitted that the hearing was a CMC, and the first such hearing; and the Defendants had failed to serve their costs budget in time (i.e. seven days before). Thus, he contended, their costs budget should be restricted to court fees only. Such a restriction has a vital effect because, in assessing costs after an order for costs has been made, the court will not depart from a costs budget unless there is good reason to do so (Rule 3.18(b)).

Having heard Counsel for all parties, the judge issued an order, in Form N155 headed, “Notice of Allocation to the Multi-track”, as follows:

“Allocation

1.

The Claim is allocated to the Multi Track.

2.

Upon the Claimant raising an issue pursuant to CPR 3.14 in respect of the defendants’ Costs Budget.

3.

The matter shall be transferred to Rhyl County Court.

4.

The Defendants shall file any part 18 Requests for further information by 4pm on 10 December 2013.

5.

The Claimant shall reply to any Requests for further information by 4pm on 7 January 2014.

6.

Pre-trial check lists to be filed by 4 February 2014. The case be listed in a 3 month trial window commencing 31 March 2014.

7.

The claim shall be listed for a costs Case management hearing by Rhyl County Court and on receipt of the file from Taunton County Court shall give directions for the listing of this.

8.

Costs reserved to the Case management hearing.”

The “costs case management hearing” was listed before Judge Hughes sitting at Wrexham on 30 January 2014, with a two hour time estimate. In fact, the hearing lasted about four hours, about half of which was taken up with the issue of whether the Defendants’ costs budget had been filed in time. The judge found that that the Taunton hearing was not a CMC, and therefore no obligation to file costs budget then arose. Thus, the hearing before him was the first CMC; and he proceeded to consider the substance of the costs budgets, and give directions, which occupied the remaining time at the hearing. He ordered that the costs of both the Taunton hearing and the hearing before him be costs in the claim.

The Claimant appealed the ruling that the Taunton hearing was not the first CMC; and, thus, it was contended, Judge Hughes was wrong not to restrict the Defendants’ costs budget to applicable fees. The Defendants cross-appealed against the judge’s costs order.

Morgan J granted permission. I heard the appeal and cross-appeal on 1 April 2014, at a hearing at which Naomi Candlin appeared for the Appellant Claimant and Richard Mullan for the Respondent Defendants. At the end of the hearing, I indicated that I would refuse the appeal and allow the cross-appeal in part; and that I would hand down reasons in writing. These are my reasons.

Miss Candlin relied upon the costs management provisions of Rules 3.12-3.14, which I have already quoted (paragraph 8 above). They apply to “all multi-track cases” (Rule 3.12(1)). By Rule 8.9(c):

“Where the Part 8 procedure is followed –

(c)

the claim shall be treated as allocated to the multi-track and therefore Part 26 does not apply.”

Thus, she submitted, costs management provisions apply to Part 8 claims – confirmed by Note 8.0.5.1 of the 2014 White Book – and a costs budget must be served at the appropriate time, namely “… 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” (Rule 3.13). Rule 26.3(1), which concerns the procedure after the filing of a defence in a Part 7 claim, cannot apply to a Part 8 claim (as there is no defence), a point expressly confirmed by Rule 8.9(c) itself. So, in a Part 8 claim each party must file a costs budget at least seven days before the first CMC.

In this claim, Miss Candlin submitted, the Taunton hearing was the first CMC. Although described in the notice of hearing as a “Directions Hearing”, any hearing for directions in a Part 8 claim is a CMC. In support of that proposition, she relied particularly upon Note 8.0.5 of the White Book, which reads as follows:

“All Pt 8 claims are treated as allocated to the multi-track. Accordingly, there is no directions questionnaire in Pt 8 claims. The court may give directions immediately after the procedural judge reviews the court file in an appropriate case and Practice Direction 8A at para 6.1… gives examples. If the court does not fix a hearing date when the claim is issued and give directions immediately then it will do so ‘as soon as practicable’ after the defendant has acknowledged service or the time for acknowledgment of service has expired. In practice it is unlikely that in any substantial Pt 8 case the court will be able to give effective directions until that stage of the proceedings. The court can order a directions hearing (case management conference) if appropriate. The multi-track rules in para 29 apply to Pt 8.” (emphasis added).

She particularly relied upon the italicised words which, she submitted, confirmed that, in a Part 8 claim, there is no difference between a “directions hearing” and a “case management conference”: the terms as used in the CPR, she submitted, are interchangeable.

The reference to “para 29” in that note is to CPR Part 29. Miss Candlin submitted that the scheme of that part of the Rules is that, in a multi-track case, the court will either give directions and a timetable for the case without a hearing, or fix a CMC. There is no provision for a directions hearing that is not a CMC. She submitted that the note confirms that that general regime applies to Part 8 claims which are “automatically allocated” (her term) to the multi-track.

Therefore, the Taunton hearing was necessarily a CMC; and the use of the term “Directions hearing” in the notice of hearing was not to the point.

In any event, all parties knew that case management directions were going to be given at that hearing; and that the Taunton hearing was in substance going to be a CMC. Indeed, although very late in the day – in fact, minutes before the hearing – Mr Mullan for the Defendants produced a draft order with case management directions through to trial; and, at the hearing, the district judge in fact did set down a timetable for the claim through to trial.

Miss Candlin submitted that the Defendants’ solicitors should have known that that was to be the nature of the hearing, and should have filed a costs budget in time for it. They simply failed to do so without any good reason. Therefore, the Rule 3.14 sanction of a costs budget restriction applies. Although the court has power to grant relief from this sanction, it will only do so where there is good reason, e.g. where the breach is trivial. However, where a deadline has simply been overlooked (as, she contended, it had been in this case), that will rarely be good reason (see Mitchell v News Group Newspapers Limited [2013] EWCA Civ 1537 at [41] per Lord Dyson MR). Therefore, insofar as the Defendants sought to escape the Rule 3.14 sanction, the full draconian force of Mitchell applied – the cases being, in principle, indistinguishable – and the court’s discretion in respect of relief from sanction could not properly be exercised in the Defendants’ favour.

Judge Hughes thus erred in finding that the Taunton hearing was not the first CMC; and, in the circumstances, he was bound to have held that the Defendants’ cost budget be restricted to court fees only.

Most claims are commenced under CPR Part 7, which generally requires a claimant to serve particulars of claim to which the defendant responds by filing a defence. Once a defence is filed, a court officer makes a provisional allocation of the claim to one of the three tracks (small claims track, fast track or multi-track) and serves on the parties a notice of that provisional allocation which requires each party to complete and file a directions questionnaire (Rule 26.3(1)). Directions are required for (amongst other things) service of evidence. When those questionnaires are filed, the court allocates the claim to a track (Rule 26.5(1)) – if necessary, after a hearing (Rule 26.5(4)) – and serves the parties with a notice of allocation (Rule 26.9(1)). If there is an allocation hearing, then, of course, at that hearing the court may exercise its general procedural powers under Rule 3.1 to make whatever case management directions it considers appropriate at that stage. An allocation hearing is not a CMC.

The multi-track is the normal track for claims for which the small claims track or the fact track is not appropriate (Rule 26.6(6)). It therefore tends to be reserved for claims which are of higher value and/or greater complexity.

If the court allocates the claim to the multi-track, CPR Part 29 applies. CMCs are a creature of Part 29. “Case management conference” is not defined in the Rules. However, it is clearly used as a term of art in the CPR, which give a “case management conference” its own characteristics and attributes. Paragraph 5 of CPR PD 29 sets out some of these, including what the court will wish to do (paragraph 5.1), the requirement that a legal representative to appear who is personally involved in the case and who has authority and information to deal with issues that might arise (paragraph 5.2), and the topics the court will likely cover (paragraph 5.3). For such a hearing, paragraphs 5.6 and 5.8 provide:

“5.6

To assist the court, the parties and their legal advisers should –

(1)

ensure that all documents that the court is likely to ask to see (including witness statements and experts’ reports) are brought to the hearing,

(2)

consider whether the parties should attend,

(3)

consider whether a case summary will be useful, and

(4)

consider what orders each wishes to be made and give notice of them to the other parties.

…

5.8

(1)

Where a party wishes to obtain an order not routinely made at a case management conference and believes that his application will be opposed, he should issue and serve the application in time for it to be heard at the case management conference.

(2)

If the time allowed for the case management conference is likely to be insufficient for the application to be heard he should inform the court at once so that a fresh date can be fixed.

(3)

A costs sanction may be imposed on a party who fails to comply with sub-paragraph (1) or (2).”

Under the heading “Case management”, Rule 29.2(1) provides:

“When it allocates a case to the multi-track, the court will –

(a)

give directions for the management of the case and set a timetable for the steps to be taken between the giving of directions and the trial; or may

(b)

fix

(i)

a case management conference; or

(ii)

a pre trial review,

or both, and give such other directions relating to the management of the case as it sees fit.”

The word “may” was added to the end of Rules 29.2(1)(a) in 2013. The use of the obligatory “will” prior to one option (i.e. give directions), and discretionary “may” prior to the second option (i.e. fix a CMC or pre-trial review), makes the construction of this provision challenging – as it is less than fully clear as to whether, on allocating a claim to the multi-track, it is open to a court to do neither. However, whether it imposes an obligation on the court or merely a power, the trigger is beyond doubt clear: it is the court actually allocating the case to the multi-track.

In addition, CPR Rule 29.3(1) provides that:

“The court may fix –

(a)

a case management conference; or

(b)

a pre-trial review,

at any time after the claim has been allocated.”

This clearly gives the court a power. The rule immediately follows Rule 29.2; and, particularly when read in the light of its immediate predecessor, it seem to me that, on its proper construction, that express power too is triggered by the allocation of the claim to the multi-track by the court. It is that allocation which provides the point in time after which the court may fix a CMC.

Therefore, Rules 29.2 and 29.3 enable the court to fix a CMC in any claim which it (the court) has allocated to the multi-track.

That is CPR Part 7. An alternative procedure for claims is found in Part 8, which replaced the former originating summons procedure. The Part 8 procedure is “in general terms designed for the determination of relevant claims without elaborate pleadings” (White Book Note 8.0.2), especially claims which are unlikely to involve substantial dispute of fact. The hallmark of Part 8 claims is not high value and/or complexity, it is the nature of the claim which makes a less sophisticated procedure appropriate irrespective of value or complexity. Indeed, Part 8 claims cover a wide spectrum of value and complexity, from straightforward landlord and tenant actions to sophisticated commercial claims. Generally, evidence is in written form and served with the claim form, acknowledgment of service and in reply. Some parts of the general rules apply to Part 8 claims; but, as I have indicated (paragraph 15 above), some (e.g. by virtue of Rule 8.9(c), Part 26) do not.

However, Rule 8.9(c) does not automatically allocate Part 8 claims to the multi-track, as Miss Candlin suggests: it merely provides that such claims are “treated as allocated to the multi-track”. As a matter of language, that is not the same thing as, in fact, being allocated to the multi-track by the court; and it is clear from reading the CPR as a whole that the deeming provision of Rule 8.9(c) is not intended to – and does not – allocate all Part 8 claims to the multi-track. Thus, it is still open to the court in fact to allocate a Part 8 claim to a particular track, including the multi-track. Paragraph 8.2 of CPR PD 8 expressly provides, in respect of a Part 8 claim:

“Case management directions may include the specific allocation of a case to a track.”

It is noteworthy that this refers to “allocation” of a Part 8 claim not “re-allocation – which underscores the point that a Part 8 claim is not automatically allocated to the multi-track by CPR Rule 8.9(c).

And, crucially, the CPR attach different attributes to a Part 8 claim which the court in fact allocates to the multi-track, and a Part 8 claim which is not in fact so allocated. The routes of appeal of such claims are different: a final decision in a Part 8 claim in fact allocated to the multi-track is to the Court of Appeal, otherwise it is to a single circuit judge (if from a district judge) or single High Court judge (if from a circuit judge). Within the CPR, these routes of appeal are set out in paragraphs 3.4 and 3.5 (including Table 1) of CPR PD 52A, which reflect the Access to Justice Act 1999 (Destination of Appeals) Order 2000 (SI 2000 No 1071). These provisions expressly draw a distinction between “Part 8 Claim, other than a claim allocated to the multi-track” and “Part 8 claim, allocated to the Multi-track”. This suggests that the underlying presumption in the CPR is that a Part 8 claim is not of high value or complexity, only actual allocation to the multi-track after judicial consideration being sufficient to route an appeal from the county court to the Court of Appeal.

Another difference is in the application of CPR Part 29. As and when a Part 8 claim is in fact allocated to the multi-track, then the case management provisions of Part 29 (including the power to fix a CMC under Rules 29.2 and 29.3) apply (see paragraphs 24-27 above). Those provisions are triggered by the actual allocation of the claim by the court. On the other hand, the regime for a Part 8 claim not in fact allocated to the multi-track is covered by Part 8 itself and CPR PD 8A. There is no mention here, at all, of CMCs. “Managing the claim” is dealt with in paragraph 6 of CPR PD 8A:

“6.1

The court may give directions immediately a Part 8 claim form is issued either on the application of a party or on its own initiative. The directions may include fixing a hearing date where –

(1)

there is no dispute, such as in child and protected party settlements;

(2)

where there may be a dispute, but a hearing date could conveniently be given.

6.2

Where the court does not fix a hearing date when the claim form is issued, it will give directions for the disposal of the claim as soon as practicable after the defendant has acknowledged service of the claim form or, as the case may be, after the period for acknowledging service has expired.

6.3

Certain applications may not require a hearing.

6.4

The court may convene a directions hearing before giving directions.”

Miss Candlin submitted that “directions hearing” in this context means “case management conference” as that term is used in Part 29; but I cannot accept that proposition. In my view, as a matter of construction, the Rules are clear on their face that, unless and until a Part 8 claim is allocated to the multi-track by the court, the CMC provisions of Part 29 do not apply. As I have explained, CMCs are a creature of CPR Part 29; and the express power to fix such a hearing is triggered by the allocation of a claim to the multi-track by the court. It is that actual allocation that triggers the various procedural obligations attached to a CMC. If the Rules intended this paragraph of CPR PD 8A to refer to a CMC it could (and would) have said so. Deliberately, the Rules use a different expression.

Whilst I consider Miss Candlin’s proposition falters on the face of the Rules, there are sound practical reasons for CMCs not featuring in track-unallocated Part 8 claims. As I have indicated, Part 8 claims cover a wide spectrum, from very simple to legally complex claims, the procedure being designed for claims of a particular nature, in which there are few or no factual disputes. Part 8 claims are reviewed by a procedural judge once the defendant’s response is in, and that judge is able to determine how the claim should proceed in the light of the overriding object of dealing with claims justly and proportionately. He must consider whether a particular claim should be proceed under Part 7 (e.g. if there are substantial factual disputes that would benefit from that procedure); or, if not, whether the claim should be allocated to a specific track (so that the case management regime of that track will apply to it) or remain track-unallocated. As paragraph 6 of CPR PD 8A makes clear, the judge may call a directions hearing before making any directions. At a stage when the judge has not made a decision that the case is of sufficient value/complexity to warrant specific allocation to the multi-track – which would plunge the claim into Part 29, CMCs and all – time and money spent on preparing for a CMC, including costs budgets, may well be unnecessary and wasteful. For example, at a first directions hearing, the judge may not allocate the claim to the multi-track: he may allocate it to the fast track or even the small claims track, or not allocate it to any track at all. He may be able to dispose of the claim at that first hearing.

If Miss Candlin were correct and the first hearing in a Part 8 claim were always a CMC requiring a costs budget, that would mean costs budgets would or might be required in all sorts of case which normally proceed by way of Part 8, including (e.g.) landlord and tenant claims and applications to the High Court for bail. If it were the case that such first hearings were inevitably CMCs, it would result in unnecessary costs being expended on preparation for hearings (including the preparation of costs budgets) which would run counter to the premise upon which the CPR is based (namely that the court maintains control and flexibility over its procedure to ensure that justice is done and proportionality maintained), and to the spirit of the Jackson reforms and Mitchell (which were designed to reduce, not increase, the burden of the costs of litigation). Unsurprisingly, on their proper construction, the CPR do not, even as a default position, drive Part 8 claims into procedures that may be entirely disproportionate. The court maintains control over such claims, and is required to be pro-active in case managing them.

Simply because the CMC provisions of Part 29 do not automatically apply, that does not mean that, in an appropriate case, those provisions (including the costs budgeting provisions of CPR Part 3.12-3.14) will never apply to a Part 8 claim. They will apply, if appropriate. They will apply if the court, having reviewed the claim (as it must) allocates the claim to the multi-track as a Part 8 claim, or transfers the claim to the Part 7 procedure if that is more appropriate. It is also open to the court to order a costs management conference (under CPR Rule 3.16) or costs budgeting, without taking either of those courses. Judges have all of these procedural weapons in their armoury: it is for the procedural judge considering a Part 8 claim to determine which is the most appropriate procedural course to ensure that the claim is case managed in accordance with the overriding objective, i.e. justly and proportionately.

Procedural judges who look at a Part 8 claim for the first time must therefore always consider the most appropriate course for any particular Part 8 claim, including the following questions:

A party will only be required to serve a costs budget if such a requirement is triggered, e.g. by the fixing of a CMC following specific allocation of the claim to the multi-track. Because a costs budget is only triggered by the first CMC – and there are no CMCs in such unallocated Part 8 claims – I appreciate that that means that track-unallocated Part 8 claims will not usually be the subject of costs management under CPR Part 3 Section II. However, in my judgment, that is the clear intention of the CPR; and fully understandable and justified because of the nature of Part 8 claims.

For those reasons, to the extent that the Note 8.0.5 of the White Book (quoted above at paragraph 16 above) suggests that (i) any directions hearing in a Part 8 claim must be a CMC, and (ii) the CMC provisions of Part 29 apply to Part 8 claims not in fact allocated by the court to the multi-track, those suggestions are wrong.

Those are the principles. Their application to this case is straightforward. This claim was not allocated to the multi-track until the district judge specifically allocated it at the Taunton hearing. Consequently, that hearing itself was not – indeed, could not have been – a CMC. The district judge was fully entitled to hold a directions hearing before he gave directions. He was fully entitled, at that hearing, to allocate the claim to the multi-track, transfer the claim to North Wales and give whatever directions he could give at that stage. He was fully entitled, then, to direct that there be a CMC in the allocated claim, to include a costs management hearing. Not only was he entitled to make those orders, most judges would have made the orders he made. Subject possibly to transferring the claim to Part 7 procedure – because of the now-obvious substantial issues of fact between the parties – I would have made a similar order. The district judge’s approach was unexceptional, and he was clearly entitled to take the approach and make the orders that he did.

Judge Hughes was also right to hold that the Taunton hearing was not a CMC. On the principles I have outlined, it could not have been a CMC; but in any event, on the facts, it was clearly not such a hearing.

I accept Miss Candlin’s submission that whether a hearing is a case management hearing or not, is a matter of substance not form. However, the notice of the hearing did not refer to it as a CMC; and it seems to me clear that the court, in sending out that notice, never intended the hearing to be a CMC. Whilst the first notice did indicate that the parties should be there an hour before the hearing time for discussions, the time estimate of 30 minutes was clearly inadequate for a CMC including the various costs budget issues. The time estimate for the CMC directed by the district judge was two hours; and, as I have indicated, even without the argument about whether the Taunton hearing was a CMC, the hearing took two hours. With that additional issue, it took four hours.

Furthermore, the parties did not act as if it were a CMC. The Claimant’s solicitor, Ms Gwenno Price-Jones of Cyfraith JRL Law, said in her statement of 10 March 2014:

Nor did the Defendants approach the hearing generally as paragraph 5 of CPR PD 8A required them to do had it been a CMC. They did serve a costs budget. However, as Ms Price-Jones said, the Defendants’ solicitors did not contact her to try to agree the costs budget as they ought to have done; nor did they make any attempt to comply with the provisions of paragraphs 5.6 and 5.8 of CPR PD 29 (quoted at paragraph 24 above). Nor, in fact, did they serve a costs budget in time, if the Taunton hearing were a CMC. The costs budget was purportedly served on the Claimant’s solicitors on the afternoon of 14 November 2014. Leaving aside whether sending by fax was good service, that was not seven clear days before the hearing date of 21 November 2014, as Rule 3.13 read with Rule 2.8(2) requires. If the Defendant’s cost budget was late – so that their costs budget and, effectively, their ability to recover costs was restricted to applicable court fees – then so was the Claimant’s, with similar inevitable consequences. It appears that neither the Claimant nor the Defendants appreciated that point. Had the Claimant done so, I suspect he would not have pursued this application to restrict the Defendants’ costs budget with such enthusiasm, or indeed at all.

At the outset of this judgment, I indicated that the issues raised concerning costs management and costs budgets in Part 8 claims are of real importance to the parties to this claim. To put that into context, the whole estate is worth about £160,000. The Defendants’ costs budget as subsequently assessed by the court (and, of course, excluding the costs of this appeal) is about £32,500 excluding VAT. The Claimant’s costs budget has been assessed at £46,000 excluding VAT and success fee, his costs being the subject of a conditional fee arrangement. Consequently, whether the first hearing in this claim was or was not a CMC is a very important issue for both of them in the context of this case.

However, I also said that the issues would soon be of historical interest only. That is because on 1 April 2014 (the same day as the appeal hearing), the Civil Procedure Rules Committee, under its powers under section 2 of the Civil Procedure Act 1997, made amendments to the CPR by the Civil Procedure (Amendment No 4) Rules 2014 (SI 2014 No 867). The amendments come into force on 22 April 2014. From that date, Rule 3.12(1) will be amended to read:

“This Section and Practice Direction 3E apply to all Part 7 multi-track cases…”.

There are then listed a number of exceptions, none relevant to this appeal. Therefore, from 22 April 2014, the CPR indicate that the costs management provisions of CPR Rule 3 Section 2 and CPR PD 3E (including costs budgets) will not automatically apply to any Part 8 claim. Those provisions will only apply if the court makes a positive order that they should (as expressly confirmed by new Rule 3.12(1A)).

I have not asked the parties to comment on this development, because any further submissions are unnecessary for the determination of the appeal before me. However, I note that the Explanatory Note reads:

“These Rules make the following amendments to the [CPR]:

(1)

amendments to rule 3.12… to clarify the proceedings to which Section II (costs management) of Part 3 of the CPR applies…”.”

Although I appreciate that from 22 April 2014 no Part 8 claims will be the subject of costs management (whether tracked or not), as the amendment is said to be by way of clarification rather than change, this is some support – albeit, I appreciate, very slight – for the conclusion to which I have come on the construction of the Rules as they currently stand in relation to the absence of any requirement to serve costs budgets in track-unallocated Part 8 claims.

It is for those reasons that the Taunton hearing was not a CMC, the Defendants’ costs budget was consequently not late and the Rule 3.14 sanction therefore did not apply to that budget. Upon that basis, I refused the Claimant’s appeal against the relevant findings and substantive order of Judge Hughes.

Mr Mullan contended that Judge Hughes erred in the costs order he made, namely that the costs of the Taunton hearing and the hearing before him should be costs in the case. He submitted that, if the Claimant’s application in relation to the Defendants’ cost budget was bad (as Judge Hughes found it was), the Claimant ought to have been ordered to pay the costs of one hearing or the other.

The directions hearing before the district judge set out something of a procedural timetable, but it was never intended to deal with the contentious cost budgets at that hearing. The issue upon which the Claimant lost was not dealt with at that first hearing at all. The order that costs of the Taunton hearing be costs in the claim was not only an order which Judge Hughes was entitled to make, it was a patently appropriate order.

However, with regard to the hearing before Judge Hughes, in my judgment the Defendants were clearly entitled to their costs of contesting the costs budget issue, and the judge erred in not reflecting that in his costs order. That issue took up about half of the hearing. In those circumstances and for those reasons, at the appeal hearing, I allowed the Defendant’s cross appeal; and replaced that order with an order that the Claimant pay half of the Defendant’s costs of and occasioned by the 30 January 2014 hearing, the other half being costs in the claim.