In the landmark costs ruling of Mitchell v News Group Newspapers Ltd [2013] EWHC 2179 (QB), the High Court addressed the issue of sanctions for failure to file a costs budget under the new stricter approach, Post Jackson. In this case Master McCloud used his discretion to limit a claimant’s costs recovery to only the court fees incurred, as a sanction for failing to exchange and file the budget within the time specified.
Representatives for News Group Newspapers had attempted to agree costs budgets with the Claimant’s representatives and had filed their own budget seven days in advance of the case management hearing, in full compliance with the Rules. The Claimant’s representatives did not produce their budget until the day before the hearing, after they had been prompted by the Court. This was a direct breach of The New Cost Rules (PD 51D) and the overriding objective.
As the hearing took place after 1 April 2013, the revised overriding objective had to be considered. With this in mind, Master McCloud noted the court’s requirement to deal with the case justly and at proportionate cost, and the need to secure compliance with court rules.
The New Costs Rules are nearly identical to those in PD 51D, with one exception; the mandatory sanction in Civil Procedure Rule 3.14 limiting a costs budget to court fees where a party has failed to file the budget within the specified time frame. Given that the circumstances in this case were identical to that envisaged by the New Costs Rules, and that practitioners have had “ample warning” with regard to the court’s stricter interpretation of the application of the rules, Master McCloud considered the correct approach in this case would be to apply the same sanction as that in CPR 3.14.There was insufficient evidence at the hearing for Master McCloud to grant permission for relief from sanctions.
The matter of the new costs regime remains foremost in the minds of both Claimant and Defendant litigators. With the above example being a cautionary tale for all practitioners to “get their houses in order” in relation to costs budgets in double quick time as the new regime is here to stay, and heavy sanctions can and are being implemented by the judiciary for failure to comply.
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