Wain v Gloucestershire County Council & Ors

THE JUDGE: This is the first CMC and costs management hearing in this case. The fourth defendant was one day late in filing her costs budget, so that instead of having been served seven clear days before today’s hearing, it was in fact served six clear days before this hearing.

The claimants are represented by Mr Woolgar of counsel, the fourth defendant by Mr Brown of counsel. Also in attendance is Mr Horne of counsel who appears for the first defendant, but who takes no part in this particular aspect of today's hearing. On behalf of the claimants, Mr Woolgar takes the point that the fourth defendants was late in serving her costs budget, and if he is right in that then of course the potential consequence is set out in CPR rule 3.14, namely, the fourth defendant will be treated as having filed a budget comprising only the applicable court fees. That point was taken in the note for today’s hearing prepared yesterday by the claimant’s solicitors: see paragraphs 24 to 30 of that note.

In his oral submissions today, Mr Woolgar observed that the fourth defendant had not in fact made an application for relief from sanction. In his oral submissions on behalf of the fourth defendant, Mr Brown submitted that although the fourth defendant’s costs budget had been prepared and was dated 25^th March 2014, it was in fact served the following day. Mr Brown further informed me that no-one on behalf of the fourth defendant had appreciated that the fourth defendant was in breach until they received the claimants’ note prepared for this hearing, which was served a little after 4pm yesterday. As it happened that was unfortunately just after the solicitor who has the care and conduct of this matter on behalf of the fourth defendant had left the office, she having the care of a young child after that time. Mr Brown invited me to entertain an application for relief from sanctions made orally today. Mr Woolgar indicated that if such an application was made orally he would be in a position to deal with it today. In those circumstances I indicated that I would be prepared to hear Mr Brown’s oral application for relief from sanctions, which he then made.

The background to the matter can be stated shortly. The case concerns the activities of various defendants in the years preceding the two flooding incidents which occurred at the claimant’s property in June and July of 2007. The proceedings were in fact served on the fourth defendant on 11^th September 2013, right at the end of the perceived limitation period: see the letter at tab 25/ page 121 of the CMC file. As the claimants accept and acknowledge, these proceedings were served on the fourth defendant without the claimants having complied with the pre-action protocol: see their case management information sheet (page 128 of the CMC file). There is something, therefore, of a palpable distinction to be drawn between the general position of the claimants, who have had many years to prepare their case, and that of the fourth defendant, who has only recently become involved in these proceedings.

The claimants refer to and rely on the recent decision of the Court of Appeal in Mitchell v News Group NewspapersLtd [2013] EWCA Civ 1537, and submit that the fourth defendant’s breach is not a trivial breach, and that no good reason has been advanced by the fourth defendant for not serving her costs budget seven clear days before today’s hearing, rather than the six clear days which were in fact achieved.

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 Othersv Els International Lawyers LLP[2013] 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 21^st 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& othersv Generali Romania Asigurare Reasigurare SA(2014) EWHC 398 (Comm)”.

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:

In considering Mr Brown’s oral application for relief I find the non-compliance or breach to be trivial and/or insignificant and/or inconsequential, and am thus able to "otherwise order" pursuant to CPR rule 3.14. However, if I am wrong in construing or considering the non-compliance or breach as being trivial and/or insignificant and/or inconsequential it is right for me to note that Mr Brown did not advance or put forward any good reason for the breach.

It is, however, appropriate for me to refer to and deal with the points made by the claimants’ solicitors in paragraph 30.5 of their note, where they make a submission to the effect that the failure by the fourth defendant to serve her costs budget in time was not an isolated breach. The claimants refer to two matters in this context, the first being an allegation of a failure to serve a disclosure report in time, and the second being an allegation to file and serve a case management information sheet in time.

As regards the first allegation, Mr Brown submitted that the fourth defendant had in fact served her disclosure report on 18^th March, and was not in breach of any order or rule in so doing. As regards the second allegation relating to the CMIS, Mr Brown submitted that the fourth defendant had served her CMIS on 31^st March, which was the date required by the relevant court order. Mr Woolgar did not contend that the underlying factual position was otherwise. In those circumstances I do not find that the points contended for in paragraph 30.5 of the claimant’s note have been made out, and as a result it is appropriate for me to consider this as an isolated breach.

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.

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.

The conclusion in the present case is that the fourth defendant will be entitled to rely upon her costs budget as served. Because of the current general interest in these matters, evolving as they are, I will direct that a transcript of this ruling be made available to the parties at public expense.