Costs in the headlines: anticipating the ripple effect of Mitchell

There have been a flurry of conferences and seminars recently surrounding the theme of Jackson—six months on [check back later for our follow up posts to last week's cost conference] as well as the results of the NLJ/London Solicitors Litigation Association survey.

It is not the substantive changes removing the right for recovery of the success fee and after the event (ATE) premiums that is grabbing the headlines for litigators, writes David Greene in the New Law Journal, but costs budgeting and the apparent new attitude from the court that is really causing a flurry in the profession. Indeed the new tough kid on the block has CPR 3.9 on his jacket and “relief against sanctions” tattooed on his forehead.

In his preliminary report, Lord Justice Jackson suggested the possibility that the existing and new rules may be imposed by the courts with rigour. “There would then be a series of ‘hard cases’...where parties found themselves struck out or unable to rely upon late evidence etc, and thus thrown back upon their remedies against their own lawyers. This may rapidly lead to a tightening up of practice on the part of all litigators, for the benefit of civil litigation generally.” It was however stressed as just possibility and one with harsh consequences.

Mixed view

In his final report, Jackson LJ sent out a mixed view; on the one hand railing against this becoming the new approach of the court, but on the other stressing the importance of compliance with a timetable set: “The courts should set realistic timetables for cases and not impossibly tough timetables in order to give an impression of firmness. Courts at all levels have become too tolerant of delays and non-compliance with orders. In so doing they have lost sight of the damage which the culture of delay and non-compliance is inflicting upon the civil justice system.”

As might be expected this passage has been quoted by the courts with approval in for instance Fred Perry v Brands Plaza [2012] EWCA Civ 224, [2012] All ER (D) 77 (Jun).

The Master of the Rolls has also stressed on occasion the need for the court to police the timetable it sets.

Mitchell

Now we have Mitchell v News Group Newspapers; speedily placed in front of the Court of Appeal today. The Mitchell case circulates around the very public “Plebgate” furore concerning what was or was not said to the police at the gates to Downing Street. The lesser known issue of the costs in associated defamation proceedings is perhaps of little public interest but has many litigators on the edge of our seats; how will the court now approach timetables, sanctions and relief under 3.9 particularly in the new “budgeting” era?

A full recitation of the facts is not needed here. Suffice it to say that this was a defamation claim proceeding under the costs pilot scheme that required parties to file budgets. The claimant failed to do so even after a reminder from the Master. The consequence was that famously Master McCloud determined (invoking CPR 3.14) that being out of time the claimant should be allowed no costs in the proceedings save the court fees and refused relief against the sanction.

The Master concluded: “The explanations put forward by the claimant’s solicitors are not unusual ones. Pressure of work, a small firm, unexpected delays with counsel and so on. These things happen, and I have no doubt they happened here. However, even before the advent of the new rules, the failure of solicitors was generally not treated as in itself a good excuse and I am afraid that however much I sympathise with the claimant’s solicitors, such explanations carry even less weight in the post-Jackson environment.”

Such is the perceived importance of establishing the principles of the new case and costs management that when the claimant appealed they were directed into the Court of Appeal smartish. The indications are that this will be a “strong” court lead by the Master of the Rolls.

Henry

The last time this sort of issue came before the Court of Appeal was in Henry v News Group Newspapers [2013] EWCA Civ 19, [2013] 2 All ER 840 where the court granted relief against sanctions under the pre-April regime but warned that it would all be different after 1 April.

So here we are but perhaps not. Mitchell is not a post-1 April case. It was a defamation claim proceeding under the defamation costs pilot scheme. There may be some question on the application of CPR 3.14 in the circumstances. Will this be a repeat of Henry? The Court of Appeal could allow the appeal with a slapped wrist to the claimant and a strong message for the future. The court, however, may wish to assert the new regime with full vigour. Many in the judiciary may be disappointed if they don’t. Perhaps most unlikely of all outcomes is a return to days of old when parties could expect the courts to extend times fairly freely subject only to keeping the trial date. At the end of the day perhaps the goal is to ensure as far as possible the fair resolution of a dispute through reasonably applied court process.

David Greene, NLJ consultant editor & senior partner at Edwin Coe LLP  

This article was first published in the New Law Journal on 6 November 2013.

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