The cost of opportunism.

The recent case of (1) Mr Philip Freeborn, (2) Ms Christina Goldie -v- Mr Daniel Robert de Almeida Marcal (t/a Dan Marcal Architects) [2017] EWHC 3046 (TCC) concerned a party whom, in relying upon a letter from the Court, filed and served a cost budget seven days before a Case Management Conference (CMC) instead of the 21 day period set out in the CPR.

The TCC court office wrote to the parties listing a Case Management Conference for 24 November 2017. The letter stated that parties were to file and exchange budgets not less than 7 days before the CMC. This is, of course, in contrast to CPR 3.13 as it currently stands:

 

3.13

(1) Unless the court otherwise orders, all parties except litigants in person must file and exchange budgets—

(a) where the stated value of the claim on the claim form is less than £50,000, with their directions questionnaires; or

(b) in any other case, not later than 21 days before the first case management conference.

 

As it went, the Claimants filed and served their budget on 2 November 2017, 21 clear days before the date of the CMC and in accordance with CPR 3.13. The Defendant, however, relied upon the letter received from the court office and filed his budget on 16 November 2017, seven clear days before the CMC. The Claimants did not take issue initially. Instead, waiting until the Defendant’s budget had been served before arguing that the budget should have been filed 14 days earlier than it had been.

In response to the Claimants’ comments, the Defendant explained the reasoning behind when his budget had been filed and advised that, should the Claimants put him to the task of making an application to address the issue, then he would seek his costs of the same. Nevertheless, the Claimants maintained their position and wrote to the court submitting that the Defendant should be treated as having failed to file his budget, citing CPR 3.14. Consequently, the Defendant was required to make an application for relief from sanctions.

In hearing the application, Coulson J identified that the first issue to be considered was whether or not the Defendant was actually required to make a relief from sanctions application. The point was relatively short, with Coulson J finding that the Defendant was not. The wording of CPR 3.13 (1) was clear – “unless the court otherwise orders”. The letter from the court office requiring parties to file and exchange budgets not less than 7 days before the CMC amounted to ordering otherwise.

“7. It is immaterial that, on further consideration, it might have occurred to the defendant’s solicitor that the letter may have contained an error, and was referring to the old r.3.13, which stipulated 7, not 21, days. A busy litigation solicitor is entitled simply to rely on the date specified in writing by the court office, rather than embarking on an investigation into whether or not the letter contained an error.

Thereafter, in the event that he was wrong in his initial finding, Coulson J went on to consider whether relief from sanctions should be allowed applying the Denton test:

Serious and significant – No hearing date had been lost, nor had there been any delay to the cost budgeting process. Once the issue had been pointed out, proactive steps were taken to discuss cost budgets.

Good reason for delay – The letter from the court was considered to be “the best possible reason for the delay”.

Is it just and reasonable to grant relief – If there was a breach, it was not deliberate. At worst it was an inadvertent breach relying upon correspondence from the court office. No prejudice has been caused to any of the parties, whereas, it would cause considerable prejudice to the Defendant if he was not entitled to rely upon his budget.

Had it been necessary to grant relief from sanctions, then it would have been granted. In considering costs of the issue, particular weight was attached to the Defendant’s comments that, should the Claimants put him to the task of making an application to address the issue, then he would seek his costs of the same. The Claimants’ stance had been erroneous and they had been properly warned by the Defendant to change it. This had been a contentious issue which the Defendant had won and it was ordered that the Claimants must pay the Defendant’s costs of and occasioned by the unnecessary application.

In concluding the judgment, Coulson J provided some parting advice to parties on opposing applications for relief from sanctions:

“16. It is, of course, extremely important, post-Mitchell and post-Denton, for the parties to civil litigation to ensure that they comply with the CPR. Courts will be far less forgiving of non-compliance than they ever used to be. But that tougher approach must not be abused in the way that occurred here. Parties need to consider carefully whether the alleged breach of the rules is, on analysis, any such thing and, even if it is, whether it is proportionate and appropriate to require or oppose an application for relief from sanctions in all the circumstances of the case.”