Party penalised for failing to serve costs budget

A claimant that filed a budget but inadvertently failed to serve it had their costs of the case management conference (CMC) halved as a penalty.

The CPR sanction a failure to file a budget on time with a court fees-only budget, but are silent on the failure to exchange or serve it.

Dan Oldroyd, a partner at leading defendant firm Keoghs, reported last week on one of his cases where the claimant’s failure to serve the budget became apparent when they served a budget discussion report. He said that, despite the budget containing incurred and estimated costs of almost £1m, he was able to consider the budget, prepare the defendant’s budget discussion report, and attend the CMC.

There was no need for the claimant to seek relief from sanctions, with the High Court confirming last year in Djurberg v London Borough of Richmond and Others [2019] EWHC 3342 (Ch) that a party in breach does not need to apply for relief from sanctions where there is not an automatic sanction.

Mr Oldroyd said he nonetheless submitted that the master approving the budget should exercise their discretion on costs due to the claimant’s failure and extra pressure that the defendant was placed under.

“I could have easily sought to adjourn the costs management part of the CMC, seeking the claimant pay the costs of that extra hearing – a decision I am confident I would have achieved. Instead, a reduction was sought to the costs of the CMC to reflect those costs that the claimant would have had to pay if the defendant had sought the adjournment of costs management…

“I suggested that the claimant’s costs of the CMC be reduced by 50% which the master agreed to. A fair outcome to penalise a claimant for their failure and shortened timeframe that my client and I had in which to deal with their budget.”

Mr Oldroyd also reported on a case he recently handled at Nottingham County Court where the claimant did not file and serve the budget, leading to the court fees sanction. An application for relief was made, but not promptly, and no budget was filed before the hearing of the application, which the defendant opposed.

The court found that the claimant affected the litigation and the parties by failing to file a budget before the CMC or seek relief sooner. While relief from sanctions was granted, the claimant was restricted to recovering only 25% of the budgeted costs on assessment, as well as ordered to pay over £3,500 of the defendant’s costs of the application.

Mr Oldroyd said: “The moral to both of these stories is to be sure that you have filed and served your budget on time and, where a mistake has been made, seek to rectify that mistake immediately, whether that is an application for relief for failure to file a budget or serving the budget.”

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Costs News
Published date
23 Jul 2020

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