On 27 November the Court of Appeal dismissed an appeal by Andrew Mitchell, the former Conservative Chief Whip at the centre of the so-called ‘Plebgate’ affair, against a decision to limit his recoverable legal expenses in a libel action against The Sun. The limitation was applied by the High Court after Mr Mitchell’s legal team failed to submit their budget in the required time limit – the first time the Jackson reforms of litigation costs has been applied.
According to the Association of Costs Lawyers, in a single judgment the Court of Appeal has sent a clear message that the new costs rules will be firmly enforced – and that any relief from sanctions for non-compliance will be judged narrowly.
According to an article in its online journal, Mr Mitchell’s appeal in seeking relief from sanctions was also a key test of the judiciary’s approach to the management of litigation – and for costs lawyers, the need for clients to strictly adhere to court rules on costs budgeting.
The budget had been submitted the day before the costs management conference rather than the seven days required under the new rules.
Master of the Rolls Lord Dyson said the central question was “how strictly should the courts now enforce compliance with rules, practice directions and court orders?”
The ACL’s chairman Murray Heining, told the Law Society Gazette: “This is a judgment that will give Ethelred-type lawyers sleepless nights. Those lawyers working with a team of experts including costs lawyers should sleep more comfortably.
“Those practising in civil litigation, if they have not already reviewed their practices and procedures, must do so now and ensure that they have the resources to ensure compliance with the civil procedure rules and all orders made.”
In the Judgement, Lord Dyson said: “The purpose of costs management (including costs budgets) is to enable the court to manage the litigation and costs to be incurred so as to further the overriding objective.”
Last-minute filing, he observed, would not achieve that, “…unless costs budgets are filed in good time before the first case management conference.”
He added: “Once it is well understood that the courts will adopt a firm line on enforcement, litigation will be conducted in a more disciplined way.
“The new, more robust approach that we have outlined above will mean that from now on relief from sanctions should be granted more sparingly than previously.
“Well-intentioned incompetence, for which there is no good reason, should not usually attract relief from a sanction unless the default is trivial.”
Lord Dyson concluded: “Our decision will send out a clear message. If it does, we are confident that, in time, legal representatives will become more efficient.”