A circuit judge has overturned a refusal to grant relief from sanction where a costs budget was served a week late, saying it was not a “serious and significant” breach.
The district judge had restricted the claimant in Murray v BAE Systems PLC (Liverpool County Court, 1 April 2016) to a budget made up of the applicable court fee.
The case was a stress-at-work claim where breach of duty was admitted, but causation and quantum remained in dispute. It was allocated to the multi-track and a case and costs management conference was set for 26 August 2015. This required the claimant to file Form H by 19 August 2015.
The defendant lodged its Form H on 3 July and, in routine email correspondence, its solicitors twice reminded the claimant’s solicitors about theirs.
His Honour Judge Peter Gregory recorded that it was clear from the email exchanges that there had been a change of file handler at the claimant’s solicitors. The claimant finally emailed its budget to the defendant on 21 August (a Friday), but not until 6.24pm. The budget was served by email on the court on 24 August, but not until 4.45pm. On the same day, the claimant applied for relief from sanction in respect of the failure to file and serve the budget within the required timescale.
The solicitors explained that failure was due to a lack of communication between the new and previous fee-earners, with each wrongly thinking that the other was to lodge the budget. They also said the firm (Thompsons) did not have an automatic diary entry system that catered for orders which were silent on their face as to dates for compliance.
District Judge Harrison considered the seven-day delay to be serious and significant, while accepting that the delay arose from a genuine mistake, even though it did not constitute a “good reason”. She also acknowledged that, if necessary, the question of costs management could have been dealt with, by her, in the course of the CCMC, notwithstanding the breach.
The defendant did not suggest that the breach caused it any prejudice and was neutral in relation to the relief application.
HHJ Gregory found “considerable force” in the submission by Gordon Exall, the claimant’s counsel, that the district judge erred in rejecting the suggestion that the lack of an adverse impact on the litigation should be a factor in categorising the nature of the breach.
He said that, unlike the district judge – who had given an ex tempore ruling and, it seemed, had only been referred to Mitchell and Denton– he had had the opportunity “to review at length all the various authorities put forward for consideration”.
He continued: “Applying the test of materiality, I do not consider on the facts of this particular case that the claimant’s breach can fairly be categorised as ‘serious and significant’ in the sense in which that term is used in the reported case law.”
If he was wrong about that, HHJ Gregory said, then DJ Harrison “should have given consideration to whereabouts, upon the scale of seriousness and significance, this case properly lies”. His judgement was that it fell “towards the bottom of any applicable scale or range”.
In this case, he ruled, the need to enforce compliance with rules, practice directions and orders, was “heavily outweighed” by the other factors: “that the litigation could be conducted efficiently, at proportionate cost and without being adversely affected by the claimant’s failure to serve a costs budget on time; that the application for relief had been made promptly; that there had been no previous breach in the proceedings; that the district judge could have proceeded to assess the costs budget in any event; and that the claimant’s solicitor’s mistake was an isolated one and due to a genuine breakdown of communication”.