Costs consequences of missing costs budgeting deadline
In an important ruling, the Court of Appeal has dismissed Andrew Mitchell’s appeal and upheld Master McCloud’s decisions: (1) that having failed to file his costs budget in time, Mr Mitchell was to be treated as having filed a costs budget comprising only the applicable court fees, and (2) to refuse relief from sanctions. Mr Mitchell’s libel claim, which relates to an article in The Sun about the “Plebgate” affair was part of the Defamation Proceedings Costs Management Scheme. The practical consequence of the decision is that Mitchell’s legal representatives will not be able to recover the over £500,000 in costs budgeted even if Mr Mitchell’s claim is successful.
The Court of Appeal said “we hope that our decision will send out a clear message”, and emphasised that Master McCloud was “right to focus on the essential elements of the post-Jackson regime”. Stating: “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.”
It is clear that the court was signalling a change in the court’s attitude to failures to comply with court deadlines, heralded by the Jackson reforms. Relief from sanctions can be expected to be granted more sparingly than in the past. It will only be where there has been merely a trivial failure to comply or where there are extremely good reasons for the failure going beyond the pressures of workload that the potentially severe consequence prescribed by CPR 3.14 will not be applied.