Court 19
Priory Courts
33 Bull Street
Birmingham
West Midlands
B4 6DS
Before HHJ David Grant
( sitting as a judge of the High Court)
B E T W E E N:
JONATHAN AND HELEN MOTT
- v -
WAYNE AND SYREETA LONG
Transcript from a recording by Ubiqus
61 Southwark Street, London SE1 0HL
Tel: 020 7269 0370
legal@ubiqus.com
AIDAN CHRISTIE QC, instructed by DAC Beachcroft of Tricorn House, 51 -53 Hagley Road, Birmingham B16 8TP appeared on behalf of the Applicant
PHILIP BYRNE, instructed by Plexus Law of Joseph’s Well, Hanover Walk, Leeds LS3 1AB, appeared on behalf of the Respondent
JUDGMENT(as approved)
HHJ GRANT:
This is an application for relief from sanction. The application notice is dated 21 July 2017 in which the defendants seek an order as follows:
‘The defendant has permission to rely on the cost budget filed and served by letter dated 21 July 2017 or in the alternative the defendant be granted relief from sanctions and permitted to rely on the said costs budget’.
The application arises as a result of the defendant filing its costs budget some 10 days late.
The underlying facts are conveniently set out in the witness statement of Michael Hoskins who is the solicitor with conduct of the proceedings on behalf of the claimant. He states as follows:
‘4. By the order dated 16 May 2017 the case management conference in these proceedings was listed for 10:30am on 2 August 2017.
Pursuant to CPR Rule 3.13 costs budgets were due to be filed not later than 21 days before the CMC.
On 11 July 2017, I wrote a letter to the defendants’ solicitor…serving our client’s cost budget. A copy of that letter is at page (80 in the application bundle). In the letter, I stated that cost budgets should be filed and served that day and I awaited receipt of the defendant’s budget. I sent the letter by DX and email as I had previously corresponded with Plexus by email throughout the proceedings to date. The budget was filed at court on same day.
A week later on 18 July 2017, I had not received a response nor been served with the cost budget from the defendants. I wrote to Plexus (page 81) again highlighting this and that we considered an application for relief from sanctions would be required in the event of late provision of the cost budget…
(On 19 July 2017) I received an email from Plexus the following day (page 82) stating that the defendant’s budget had been sent on 7 July and that a copy would follow the next day. The email also dealt with some issues regarding directions.
I was concerned that we had not received the cost budget if it had been posted 12 days previously and took it upon myself to enquire whether the court had received the same from the defendants or their solicitors. I called the court and was informed by Mrs Sue Thomas that no costs budget had been received from the defendants. I attach my attendance note (page 83).
I interpose to observe that when reading that attendance note it does not appear that it states expressly on its face that no cost budget had been received. Instead Mrs Thomas is recorded as having said, ‘…there is nothing outstanding on this’, which expression could of course be open to a range of interpretation.
On 20 July 2017, I was copied in to Plexus’s email to the court purporting to file the cost budget which was said to have been drafted on 6 July 2017 and served under a letter dated 7 July. The email is at page 84 and the accompanying cost budget is at page 85 (the first budget).
The first budget is indeed dated 6 July 2017, bears the names of the parties and the correct case reference for the matter and is signed by an associate partner of Plexus and contains the usual statement of truth. The first budget contains the following anomalies:
It is stated to be five pages long (the front sheet is footed page 1 of 5) but only the front page of the first budget was filed at court.
It records no disbursements incurred in relation to statements of case, though both the defence and amended defence were settled by counsel.
It relies on an assumption that the claimants will file medical evidence whereas this is a claim for property damage and no medical issues are pleaded.
In my subsequent email to Plexus I requested a copy of the covering letter said to have been sent on 7 July 2017 (page 86). Plexus sent me a copy of the covering letter in … Word format by email (pages 87 & 88), though that letter was in fact dated 9 July 2017, which fell on a Sunday. I highlighted this and the anomalies I have noted in my further email to Plexus later that day on 20 July (page 89). I again reiterated my view that an application for relief from sanctions would be required as the defendants had not properly served and exchanged a cost budget within the timescale required under the CPR..’
In her witness statement, Sarah Louise Wright, an associate partner of Plexus Law with conduct of the matter on behalf of the defendant, stated as follows:
‘2. I have noted the claimant’s correspondence noting that they had not received the claimant’s cost budget which I believed had been served on 7 July 2017…
I note that the cost budget was due to be served by 11 July 2017 and on 6 July I started to draft the document.
Unfortunately, at this time we experienced IT difficulties which appear to follow implementation of new printing systems.
The difficulties including saving Word documents and printing those documents and there were issues around the system crashing during the course of working on documents.
Notwithstanding this I believe that the defendants’ cost budget had been completed saved and printed correctly.
My working practice is to send documents to the printer when they are complete and towards the end of the day, to release the documents from the printer and spend the latter part of the day signing letters and documents.
When reviewing the file to prepare for the CCMC and consider the claimant’s solicitor’s correspondence I noted that they raised issues with the fact they had not received our cost budget.
I emailed the budget which had been saved to the system to the claimant’s solicitor and the court on 20 July, noting that this had been filed and served by letter dated 7 July 2017. I was then advised that neither the claimant’s solicitor nor the court had received the budget.
By email dated 20 July 2017 received at 17.47, the claimant’s solicitor noted that the budget I had sent consisted of only one page and made reference to reliance on medical evidence.
On receipt of this mail on 21 July 2017 I reviewed the document and noted that it was not the final format of document I had drafted and in fact the final version had not saved to the computer system.
This leads me to a position where I cannot now be certain or satisfied that the budget was filed and served as previously thought and I have to accept that it is likely that the documents were not saved correctly and/or not printed’.
It is not necessary for present purposes to read further from that witness statement.
Those therefore are the underlying facts, and I now turn to consider the first of the three stages identified by the Court of Appeal in Denton v TH White Ltd [2014] EWCA Civ 906, namely whether the breach has been serious or significant. Giving the judgment of the majority Lord Dyson, then Master of the Rolls, held as follows, under the heading ‘The first stage’:
’26. Triviality is not part of the test described in the rule. It is a useful concept in the context of the first stage because it requires the judge to focus on the question whether a breach is serious or significant. In Mitchell itself, the court also used the words “minor” …and “insignificant” … It seems that the word “trivial” has given rise to some difficulty. For example, it has given rise to arguments as to whether a substantial delay in complying with the terms of a rule or order which has no effect on the efficient running of the litigation is or is not to be regarded as trivial. Such semantic disputes do not promote the conduct of litigation efficiently and at proportionate cost. In these circumstances, we think it would be preferable if in future the focus of the enquiry at the first stage should not be on whether the breach has been trivial. Rather, it should be on whether the breach has been serious or significant…We therefore prefer simply to say that, in evaluating a breach, judges should assess its seriousness and significance. We recognise that the concepts of seriousness and significance are not hard-edged and that there are degrees of seriousness and significance, but we hope that, assisted by the guidance given in this decision and its application in individual cases over time, courts will deal with these applications in a consistent manner.
The assessment of the seriousness or significance of the breach should not, initially at least, involve a consideration of other unrelated failures that may have occurred in the past. At the first stage, the court should concentrate on an assessment of the seriousness and significance of the very breach in respect of which relief from sanctions is sought. We accept that the court may wish to take into account, as one of the relevant circumstances of the case, the defaulter’s previous conduct in the litigation…We consider that this is better done at the third stage… rather than as part of the assessment of seriousness or significance of the breach’.
In his written submissions, on behalf of the defendants, Mr Byrne submitted as follows:
‘11. In the present matter, the defendants’ budget was filed and served 10 days late but ahead of the present hearing.
Accordingly it is respectfully submitted that the delay in the service of the budget should, as a matter of fact, be considered as being minor’.
In paragraph 13 of his written submissions Mr Byrne referred to the decision of HH Judge Peter Gregory in the Liverpool County Court in Wilfred Murray v. BAE Systems PLC, and in paragraph 14 on his written submissions he referred to my own decision in Azure East Midlands v Manchester Airport Group [2014] EWHC 1644 TCC. In paragraph 15 he submitted that:
‘In the above circumstances, it is respectfully submitted that this minor delay had had no material effect on these proceedings, nor has it prejudiced the claimant in any material way. Indeed, and in any event, the defendant’s cost budget has been the subject matter of the claimant’s attention and upon which they have been able to comment’.
In Wilfred Murray, there was a similar delay or degree of lateness to that in the present case, namely a delay of 10 days, which is the equivalent of 7 working days. HHJ Peter Gregory heard an appeal from a decision of a district judge who had refused an application for relief. The primary submission of counsel for the claimant appellant is recorded in paragraph 17 of the judgment as follows:
‘He submits that the consequences of the breach are relevant to its classification and that, for a breach properly to be considered “serious and significant” it must have some impact on the smooth running of the litigation in question, or litigation generally’.
I pause to observe that in paragraphs 26 and 27 of the judgment of the majority in Denton Lord Dyson used the expression “serious or significant” as well as the expression “seriousness and significance” (my underlining) and began paragraph 27 with the phrase ‘The assessment of the seriousness or significance of the breach’, adding in the second sentence that ‘At the first stage, the court should concentrate on an assessment of the “seriousness and significance” of the very breach in respect of which relief from sanctions is sought’ (again, my underlining). In his oral submissions Mr Byrne confirmed that he made a like submission in this case, namely that at this first stage, the court should concentrate on an assessment of the seriousness and significance of the breach in respect of which relief from sanctions is sought, irrespective of whether the test is to be construed in alternative or cumulative terms.
Having cited extensively from Denton, HHJ Peter Gregory then referred to a number of other cases: Azure, which concerned the late filing of a cost budget, some two days late; Long v Value Properties Limited [2014] EWHC 2981 CH, which concerned the filing of further information some five weeks late; Altomart Limited v. Salford Estates (No. 2) Limited [2014] EWCA Civ 1408, which concerned the filing of a notice of appeal some five weeks late; and Joshi & Welch Limited v Tay Foods [2015] EWHC 3905, which concerned a failure to file a defence to a counterclaim.
In paragraph 22 of his judgment in the Court of Appeal in Altomart, Moore-Bick LJ held as follows:
‘… In terms of the lapse of time the delay was considerable, but it was clear that it was likely to have had little, if any, effect on the course of the proceedings’.
In paragraph 29 of his judgment in Joshi, Green J held:
‘…The judge should have held that the violation was wholly technical and exerted no impact at all upon the proceedings and caused no prejudice or harm to the counter claimant’.
I draw no distinction between the terms ‘effect on the proceedings’ and ‘impact on the proceedings’, and construe those terms to mean the same thing or essentially the same thing.
Mr Byrne relies on those passages in support of the submission - as that recorded in paragraph 17 of HHJ Peter Gregory’s judgment in Wilfred Murray - that ‘… for a breach properly to be considered “serious and significant” it must have some impact on the smooth running of the litigation in question or litigation generally’.
However, Mr Christie QC makes the point that it is important to take into account the fact that those cases did not concern the regime of cost budgeting. They were concerned with other aspects of civil litigation, the consequences of which could be fatal to the party in default, who could as a result no longer be in a position to make or defend a claim. That, Mr Christie QC submits, is to be contrasted with the position as regards the regime of cost budgeting, where a party in default may nonetheless continue to make or defend a claim, albeit with the ability to recover costs significantly curtailed.
In Wilfred Murray HHJ Peter Gregory came to his conclusion as follows:
‘37. It appears that, in relation to the First Stage in the three-stage test propounded by Denton, the … District Judge failed to consider materiality at all, alternatively whether it would be the most appropriate measure of defining or classifying the breach as “serious or significant” - this despite the guidance of the Court of Appeal both in Denton and Altomart.
Having had the opportunity to review at length all the various authorities put forward for consideration - an opportunity which the … District Judge clearly did not have - and applying the test of materiality, I do not consider on the facts of this particular case that the claimant’s breach can fairly be categorised as “serious and significant” in the sense in which that term is used in the reported case law’.
The claimants’ position as regards stage one is as follows. In his witness statement Mr Hoskins stated as follows:
’18. There has been prejudice suffered as a result of the breach. The purpose of exchanging budgets 21 days in advance is to allow the parties sufficient time to consider and discuss budgets in time to file budgets discussion report, which are due seven days before the CMC. The failure by the defendants to serve a cost budget in time meant there was only one working day for consideration and discussion of the second budget (I pause to interpose the following words ‘… so as to produce a budget discussion report’). On any view that delay would have a significant negative impact on my preparations for the CMC generally and for discussion and potential agreement of budgets but the impact is all the more acute in this case given the very different approaches of the parties to fundamental issues including the scope of any expert evidence (including the number of experts required) and the estimated length of trial’.
Mr Christie QC explained that the reference to there being only one working day for consideration and discussion of the second budget so as to prepare a budget discussion report was calculated as follows. The second budget, which is the one filed with the application, was served on Friday 21 July. Budget discussion reports were due the following Tuesday 25 July; there was thus only one working day, namely Monday 24 July, for such consideration and discussion of that second budget, so as to produce a budget discussion report.
In his written submissions Mr Christie QC simply submitted that the breach was both serious and significant: the budget had been served 10 days late. Mr Christie QC amplified that submission in the course of his oral submissions as follows. He first submitted that the failure to serve cost budgets in time meant that there was in effect 10 days wasted within which the parties could and/or should have been in a position to discuss two fundamental issues in the case, namely the extent of and/or nature of expert opinion evidence in the case, and the estimated length of trial.
Mr Christie QC went on to make a second submission, namely that what the authorities now show is that a failure to serve a cost budget can have a material effect on the litigation if such failure sufficiently distracts from the cooperative process of entering into discussions about cost budgets. In that context he referred me to the recent decision of Mr Daniel Alexander QC, sitting as a deputy judge of the Chancery Division in Lakhani v Mahmud & Ors [2017] EWHC 1713 CH, who heard an appeal from HH Judge Lochrane sitting in the County Court of Central London. HHJ Lochrane had refused an application for relief from sanctions in circumstances where a cost budget had been filed and served one day late, namely on 20 December 2016. HHJ Lochrane’s reasoning is set out in paragraph 12 of Mr Alexander QC’s judgment in Lakhani:
‘First, that the defendants’ solicitor only accepted belatedly that the costs budget may have been out of time which, as the judge said, meant that days which should have been devoted to agreeing costs were cluttered with arguments about whether or not there had in fact been a breach of the rules. Second, that the situation was made worse by the defendants knowing that their office would be shut between 23 December 2016 and 3 January 2017, limiting the time available for agreement on costs, in effect to just a few days before Christmas and a few days after the New Year. Third, that the defendants’ solicitor was aware that filing late would restrict a period already limited. The judge said that it was clear that the late filing had artificially restricted an already restricted timetable. Fourth, he rejected an argument that it did not matter because the budgets were not agreed anyway. Fifth, he said that the impact of late service had created an environment which was not conducive to agreement and was more conducive to the defendants presenting the costs as highly contentious’.
In paragraph 17 of his judgement in Lakhani Mr Alexander QC referred to the decision of the Court of Appeal in Clearway Drainage Systems Ltd v Miles Smith Ltd [2016] EWCA Civ 1258, and cited a number of paragraphs from the judgment of Sir Terence Etherton MR in that case, including the following:
’57. Denton made clear that the focus of the enquiry at the first stage should be on whether the breach was serious or significant. The court…expressly rejected the notion that the sole test was whether a future hearing date was imperilled. It emphasised that, although there are many circumstances in which materiality in that sense would be the most useful measure of whether a breach has been serious or significant, it is deficient in leaving out of account those breaches which are incapable of affecting the efficient progress of the litigation, although they are serious’.
In his oral submissions Mr Christie QC submitted that on its proper construction that passage could or should be read to mean that, while materiality may be relevant, it is not on itself determinative, because there may be a breach which - while it does not imperil the litigation - may nonetheless affect the progress of that litigation.
Under the heading ‘Evaluation of seriousness the breach where deadline is missed’ Mr Alexander QC continued his judgment in Lakhani as follows:
’23 In addressing this issue, it must be borne in mind at the outset that an evaluation of seriousness or significance of breach is not a binary question of primary fact. It is a multifactorial question of degree.
Then, under the heading ‘The absolute and relative amount of time lost by missing the deadline’ he held:
First, it is necessary to determine how much time was lost by late service and its significance in absolute and relative terms’
Then, referring to the decision in Azure, he held:
In considering the amount of time lost by failure to meet a deadline, it is legitimate for a court to take account of the effective amount of time available and how much of that was lost as a result. Moreover, the amount of time lost can be more significant where a task involves a degree of co-operation, such as attempting to agree a matter, rather than the unilateral performance of an act, such as service of witness statements, which does not involve co-ordination with an opposing party of availability to discuss matters or exchange correspondence’.
I pause to observe that I see and share the force of the observation made in that paragraph.
Mr Alexander QC continued:
’37. While the actual impact on the ability to perform the task required by the order is very important and may be decisive in many cases, the authorities do not suggest that it is the over-riding factor in every case. In my judgment, in evaluating the seriousness of breach, a court is entitled to consider the risk of difficulty that the failure to meet a deadline has created even if, in the event, it has been possible to perform the task required, notwithstanding the breach. That is particularly legitimate in the case of orders whose performance requires a degree of cooperation because, in such cases, even though it may be possible for the non-defaulting party still to do what is required as well, it may make it more inconvenient and costly, since extra time may need to be made available…’
Under the heading ‘Summary on seriousness of breach’ Mr Alexander QC reached his conclusion in Lakhani as follows:
’49. For the reasons given, in my judgment, HH Judge Lochrane was entitled to take the factors into account that he considered particularly relevant in this case in determining whether the breach was serious or significant and was not obliged to treat the fact that costs budgeting could be done as the overriding one. Other judges may have approached the matter somewhat differently, given factors more or less weight and reached a different conclusion. This seems to me a case on the borderline of sufficient seriousness to warrant refusal of relief from sanctions…’
In his oral submissions Mr Christie QC submitted that while similar to the circumstances in Lakhani, in the present case the defendants’ cost budget was filed only after prompting from the other side’s solicitors. In the present case, the cost budget was filed 10 days late, and the budget which had been filed on 20 July was in fact the wrong budget. Mr Christie QC concluded his oral submissions on the first stage by submitting that here the prejudice was to the very co-operation which the rules were designed to achieve, and that the critical point was ‘We lost 10 days which could have been conveniently used’.
I have come to the following conclusions on the first stage. Firstly, as a pure matter of time, filing a cost budget 10 days late is not of the same relatively modest order of time as being a few hours or even one or two days late. Secondly, the degree of lateness in every case is always to be construed in the context of the particular circumstances of that case. To my mind the circumstances in Lakhani illustrate that point very clearly. Thirdly, I accept Mr Christie’s main submission that lateness in serving a cost budget has the capacity to prejudice the very process of co-operation in the cost budgeting process which the rules are designed to achieve. In those circumstances I have come to the conclusion that the period of delay in this case answers the description of being serious or significant, perhaps with particular emphasis on the latter word.
I therefore turn to consider the second stage, namely what was the reason why the failure or default occurred. In paragraph 25 of his written submissions, Mr Christie QC submitted that ‘The circumstances under which this application has arisen are very obscure’. In paragraph 26 he submitted that, ‘It is not clear how this occurred and the witness statement does not really assist in explaining matters’.
In his witness statement Mr Hoskins stated:
’17. There is no good reason for the breach. The IT difficulties experienced by Plexus cannot readily account for the fact that the first budget is signed and dated 6 July 2017 but was not served or filed. What is more the IT difficulties purportedly experienced could have been easily overcome by the handling solicitor simply checking what had or had not been printed and taking immediate remedial action’.
I have already cited the relevant passages of the witness statement of the claimant’s solicitor and for convenience repeat the following:
‘4. Unfortunately, at this time we experienced IT difficulties which appear to follow implementation of new printing systems.
The difficulties including saving Word documents and printing those documents and there were issues around the system crashing during the course of working on documents.
On receipt of this mail on 21 July 2017 I reviewed the document and noted that it was not the final form of document I had drafted and in fact the final version had not saved to the computer system’.
A reasonable conclusion to draw from the evidence in the defendants’ solicitor’s witness statement is that the document which she drafted on 6 July was not saved to the defendants’ solicitors’ IT system. I deliberately use the passive sense in that sentence. It is not clear, on the evidence in the application, whether the failure was hers or someone else’s at the defendants’ solicitors i.e. a human error, or whether it was a fault in the IT system itself i.e. a system error. There is no detail about what the “IT difficulties” were. In his oral submissions Mr Christie QC submitted that if Plexus were indeed experiencing problems of the magnitude inferred in the defendants’ solicitor’s witness statement, such problems might have been explained by a witness statement from someone from their IT department or from someone having the relevant or appropriate IT expertise. In my judgement, there is force in that observation.
I have therefore come to the conclusion that while there may have been a reason why the failure or default occurred, which might have amounted to a good reason, I am not satisfied on the evidence in the application that the defendants have established that there was good reason for the default.
I therefore turn to consider the third stage. CPR rule 3.9, under the heading, ‘Relief from sanctions’ provides as follows:
‘(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders’,
Subparagraph (2), provides that an application for relief must be supported by evidence.
In the judgment of the majority in Denton Lord Dyson MR held as follows:
‘34. Factor (a) makes it clear that the court must consider the effect of the breach in every case. If the breach has prevented the court or the parties from conducting the litigation or other litigation efficiently and at proportionate cost, that will be a factor weighing in favour of refusing relief. Factor (b) emphasises the importance of complying with rules, practice directions and orders. This aspect received insufficient attention in the past. The court must always bear in mind the need for compliance with rules, practice directions and orders, because the old lax culture of non-compliance is no longer tolerated.
Thus, the court must, in considering all the circumstances of the case so as to enable it to deal with the application justly, give particular weight to these two important factors. In doing so, it will take account of the seriousness and significance of the breach, which has been assessed at the first stage, and any explanation, which has been considered at the second stage. The more serious or significant the breach the less likely it is that relief will be granted unless there is a good reason for it. Where there is a good reason for a serious or significant breach, relief is likely to be granted. Where the breach is not serious or significant, relief is also likely to be granted.
But it is always necessary to have regard to all the circumstances of the case. The factors that are relevant will vary from case to case. As has been pointed out in some of the authorities that have followed Mitchell, the promptness of the application will be a relevant circumstance to be weighed in the balance along with all the circumstances. Likewise, other past or current breaches of the rules, practice directions and court orders by the parties may also be taken into account as a relevant circumstance’.
To my mind the following are material among the circumstances of the case. Firstly, the fact that the defendants’ solicitors have in fact served a cost budget, and have done so some nine days before this CMC. However, in answer to that Mr Hoskins states in paragraph 18 on his written statement that, notwithstanding that, the timing of the service of the second cost budget was such that there was only one working day for consideration and discussion of that second cost budget so as to provide a budget discussion report. I bear that point in mind.
Secondly, there is also an important practical aspect to consider here. As the claimants’ solicitor pointed out in paragraph 1 of his email dated 20 July 2017 (page 89) albeit in the context of the first cost budget of 6 July in the amount of £39,420:
‘The budget is in my view artificially low, wholly unrealistic and falls within the type discussed in Findcharm Limited v Churchill Group Limited, the purpose of which is no doubt to make our client’s budget seem too high’.
As I say that observation was made in respect of the first budget, dated 6 July. In his oral submissions Mr Christie QC confirmed that a like observation was maintained in respect of the second cost budget of 21 July which was in the slightly higher figure of £47,680. Those figures to be contrasted with the claimants’ budget in the sum of £281,000 in round terms, in respect of which the defendants have offered the sum of £170,000: see the last page under tab G of the case management file.
The difference between those budgets is explained by the parties taking very different approaches and stances to the case. Firstly, as regards expert opinion evidence the claimants’ position was that the parties should be permitted to adduce expert opinion evidence from two categories of expert, firstly from a structural engineer, and secondly from a surveyor on the allegations of trespass. The defendants took the view, certainly as it appeared at an early stage in the proceedings, that only one discipline of expert witness should be permitted, and furthermore that such an expert should be appointed to act as a single joint expert. Secondly, as a consequence of the disparate stances which the parties had taken about expert evidence, the parties took materially different positions as regards the estimated length of hearing: the claimants estimating a four-day trial and the defendants a two-day trial.
Mr Christie QC submitted that had the defendants filed and served its cost budget in time those 10 days could have been put to good use, and the parties might have been able to agree some of the substantive matters which were apparently in issue between them, in particular the issues regarding the number and status of expert witnesses, their discipline and whether or not one or other should be appointed as a single joint expert. However, it is also to be contemplated that, despite proper and appropriate co-operation, the parties might not have been able to agree those matters. In those circumstances those issues would then have become the subject of oral submissions at this case management conference, and the court would then have made its decision on those issues (which is what has already occurred at an earlier stage of today’s hearing).
In such circumstances a party who has filed a cost budget reflecting its own views on such aspects (here as regards expert opinion evidence and estimated length of hearing) both of which, of course, have a significant impact on the overall content of any cost budget, is likely to be ordered to file and serve a revised cost budget which reflects the orders which the court has in fact made at the CMC, with a view to the parties discussing such revised budget, and in default of agreement a cost management hearing would be listed, often taking place by telephone.
In those circumstances, the process of cost budgeting would not have been completed today in any event. In my judgment, the inability of the parties to discuss the defendant’s cost budget dated 21 July is to be viewed in that context. To my mind, this is perhaps another example of the type of matter better considered under this third stage of Denton, rather than under the first stage; see paragraph 27 of the judgment of the majority in Denton.
Mr Christie QC also pointed to other factors of the defendants’ solicitors’ conduct of the case as being relevant to consideration of the overall circumstances of the case. Firstly, that the defendants’ solicitors had failed to file a case management information sheet (‘CMIS’) before this hearing, none such being in the case management file. Secondly, that they had also failed to file a disclosure report; again, none such being in the case management file. Thirdly, that although an order for costs had been made on 4 April 2017 (page 66) in the sum of £282-odd, that sum was not in fact paid until 25 July, which was some three months later than it otherwise should have been paid. I bear those matters in mind.
However, I have come to the overall conclusion, having regard to all the circumstances of the case, in particular the reasons set out above as regards the need for the defendant to file and serve a revised cost budget reflecting the substantive orders for directions relating to expert opinion evidence and the estimated length of the forthcoming trial which the court has now made, that this is a case where I should grant the defendants relief from sanction. The fact that the parties are now in precisely the same procedural position in which they would have been so far as the process of cost budgeting is concerned, had the defendants served their cost budget in time, is a highly significant circumstance in the case, and one to which the court should have proper regard.
However, such relief from sanction will come at a cost to the defendants. I will order that they are to pay the claimants’ costs of and occasioned by the application, and I will now hear from counsel precisely what such an order to costs may or may not involve.
End of Judgment