CostsDon’t question court correspondence?

November 28, 20170

The judgment of Coulson J given today in Freeborn v Marcal [2017] EWHC 3046 (TCC) encourages careful consideration of whether or not to insist on an application for relief from sanctions.

The Defendant served its costs budget fewer than 21 days before the CMC, being the time limit which applies by virtue of the current version of CPR 3.13, “unless the court orders otherwise“. 

It did so in reliance on a letter from the Court, which, as found by the judge, Coulson J, had the effect of varying that time limit to one of 7 days.

The Judge therefore held that there was no breach of CPR 3.13, and would in any event have granted relief from sanctions.

The Judge was critical of the Claimant’s “pedantic” point about the court’s letter and of its stance that the Defendant was required to apply for relief from sanctions if its budget was not to be treated as one limited to court fees. He ordered the Claimant to pay the Defendant’s costs of the application.

The Judge produced a written judgment “pour encourager les autres“: specifically to encourage them to consider whether an alleged breach really is a breach, and whether it is proportionate and appropriate to oppose an application for relief from sanctions.

I would make three comments.

First, the Judge stated that the court’s letter expressly required the parties to file and exchange costs budgets not less than 7 days before the CMC. Although not quoted in the judgment, a standard letter from the TCC’s listing office giving notice of a CMC states:

Your attention is also drawn to:

…the requirement in CPR 3.13 for the parties to file and exchange costs budgets not less than 7 days before the CMC

When the wording of that letter is considered, it may be questioned whether (i) that really is the court otherwise “ordering” anything and (ii) whether the court was intending to vary the time limit in CPR 3.13 merely by drawing attention to that provision. Although the Judge would have granted relief from sanctions in any event, if there had in fact been a breach this would be significant because it would then have been necessary to make the application for relief from sanctions.

The reality would seem to be that when the time limit in that rule was changed, and when the requirement for budget discussion reports was introduced, the Court omitted to update its standard letter. It may perhaps reassure practitioners to know that they may not be alone in struggling to keep up with all the changes to the rules.

Secondly, the judgment contains welcome comments on the need for busy litigators to be able to rely on correspondence from the court without the need for further investigation. It will be interesting to see how widely this principle is held to apply or whether it would be distinguished in the case of a more patent mistake.

Thirdly, this is a rare example of costs being awarded against a party opposing relief from sanctions. Nevertheless, it may be notable that the court did not, even in this case, make one of the more draconian costs orders canvassed by the Court of Appeal in Denton for discouraging others from opportunistic behaviour.

Stephen Innes

28.11.17

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