When I saw Andrew Mitchell MP riding his bike along Downing Street, I never imagined that the outcome would have been a case in the Court of Appeal, but this is exactly what happened when Andrew Mitchell MP made a claim against News Group Newspapers Limited.
The Court of Appeal dismissed an appeal against tough sanctions imposed for a failure to file a costs budget on time. This is a stark warning to solicitors, who in simple terms, must comply with the Jackson reforms. As this case demonstrates, solicitors must accept there has been an upward gear shift change or face the consequences… the Courts will apply the brakes as you hit the cost sanction wall.
How Defamation Case Led to This
By way of background, you may recall that Andrew Mitchell MP brought a defamation case relating to The Sun newspaper’s publication of the “plebgate” affair. This case proceeded under the pilot costs management scheme for defamation cases before the Jackson reforms applied on 1 April 2013, as opposed to the costs budgeting regime brought in subsequently. Both schemes required the parties to file and exchange costs budgets no less than seven days before the relevant hearing.
As a reminder, the relevant rules of the Civil Procedure Rules (CPR) as amended by Jackson, including the overriding objective, state:
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.”
3.9 (b) to enforce compliance with rules, practice directions and orders.
1.1 (f) enforcing compliance with rules, practice directions and orders.
Some of you may be surprised. I suspect, however, that many of you won’t as in this case the defendant filed a costs budget but, in breach of the pilot scheme rules, the claimant failed to do so until the day before the case management conference. The Master applied the new rules and limited the costs to the court fees and refused the claimant’s relief from sanction. I thought this was harsh at first blush and would have quickly prepared my appeal, but consideration of the wider policy impact may have stopped me in my tracks before getting on my tandem to the Court of Appeal.
New Emphasis on Compliance
For a moment, let’s consider the law. Lord Dyson, who gave the judgment in the Court of Appeal, said that CPR 3.9 reflects a deliberate shift in emphasis, and the need to enforce compliance is of paramount importance. The court said in applying this new approach:
- If the non-compliance can properly be regarded as trivial or insignificant, the court will usually grant relief provided that an application is made promptly. Examples include where there has been a failure of form rather than substance, or where a party has narrowly missed a deadline imposed by an order but has otherwise complied fully.
- If the non-compliance cannot be characterised as trivial, then the burden is on the defaulting party to persuade the court to grant relief. If there is a good reason for the default, the court will be likely to grant relief. Examples may include where a party or his solicitor “suffered from a debilitating illness or was involved in an accident”, or where later developments show that the original period for compliance was unreasonable. The court emphasised, however, that merely overlooking a deadline, whether on account of overwork or otherwise, is unlikely to be a good reason.
- Applications for an extension of time made before time has expired will be looked upon more favourably than applications for relief from sanction made after the event.
The court, rightly in my view, acknowledged that it was a robust decision and added:
The defaults by the claimant’s solicitors were not minor or trivial and there was no good excuse for them. They resulted in an abortive costs budgeting hearing and an adjournment which had serious consequences for other litigants. Although it seems harsh in the individual case of Mr. Mitchell’s claim, if we were to overturn the decision to refuse relief, it is inevitable that the attempt to achieve a change in culture would receive a major setback. [emphasis added]
I recall the Technology and Construction Court piloting the scheme of budgeting, where amongst practitioners it was seen that compliance with the CPR in this context would form an essential part of a litigation strategy.
The days where the courts would indulge parties for non-compliance are becoming ever more distant, where in cycling terms Chris Hoy MBE would have been riding the bike and not Andrew Mitchell MP. This is a significant step in inducing cultural change, which ironically all began in Downing Street.