Author: Leigh Callaway
In a timeous reminder of the importance of adhering to court deadlines, in BMCE Bank International Plc v Phoenix Commodities PVT Ltd & Anor the court refused an application for relief from sanctions where a costs budget was served late a consequence of which the defaulting party was to be limited to only recovering court fees in the event of success at trial. This was despite an undertaking by the defaulting party’s solicitors to cover both parties’ costs on an indemnity basis for the CCMC and a further CCMC if required, regardless of the outcome of those hearings.
CPR rule 3.13(1)(b) provides that unless the court orders otherwise, all parties except litigants in person must file and exchange costs budgets not later than 21 days before the first case management conference which, in the present case, was 27 September 2018. The claimant complied, filing and serving its budget on 26 September 2018. The defendant did not, instead serving their costs budget much later, on 11 October 2018 at 4.32pm.
CPR 3.14 provides that “unless the court orders otherwise, any party which fails to file a budget despite being required to do so will be treated as having a budget filed comprising only the applicable court fees”. A defaulting party can, however, apply for relief from that sanction; CPR 3.9 provides the court with the power to grant relief upon consideration of, among other things, “all the circumstances of the case”. The court will also give consideration to the principles set out in Mitchell (MP) v News Group Newspapers Limited (CA) and Denton v TH White Limited; namely: (1) to identify and assess the seriousness of the default, (2) to consider why the default occurred, and (3) to evaluate all the circumstance of the case so as to enable to court to deal justly with any application for relief.
In the present case the budget was filed two weeks late. As a consequence, no budget discussion report was filed, and it was not possible to deal with the defendant’s costs budget at the CCMC hearing, which was instead taken up by the application for relief. This in turn would necessitate a further hearing, to the inconvenience of the parties, the court, and other court users. The explanation proffered by the defendant’s solicitors for the late filing and service of the budget was that the partner with conduct was travelling on business and engaged in work aboard; the default was simply an “oversight” and a “genuine mistake”. That explanation, however, whilst understandable, was not regarded as a good reason for departing from the consequences of late service under CPR 3.14; it was “no excuse” and the delay was undoubtedly “a serious breach”. The Court was particularly swayed by the fact that “this was not a case of a near miss… [the budget] was filed two weeks late”, and that the defendant did not make an application for relief until immediately prior to the hearing.
In an understandable attempt to mitigate the consequences of the default, the defendant’s solicitors offered to undertake to cover both parties’ costs on an indemnity basis for the CCMC and a further CCMC if required, and, as a consequence, sought to argue that the non-defaulting party would not suffer much, if any prejudice. However, the court was not convinced, taking the view that: (1) the claimant’s principals attended court, as was their right, for the largely wasted hearing and the claimant suffered loss of business time, and (2) prejudice was suffered by the court and other court users as a result of the use of “scarce court resources” in relation to the first and the potentially second CMC.
The judge’s closing comments are particularly pertinent for parties involved in litigation to bear in mind; that: “it is important in all divisions of the High Court…that the parties comply with rules, practice directions and orders so that litigation can be conducted efficiently and at proportionate cost… If there is a failure to comply, then an application for relief from sanctions should be made promptly, supported with evidence, after which it will be considered in accordance with CPR 3.9 and the established principles”.
  EWHC 3380 (Comm)
  EWCA Civ 1537,  1 WLR 795
  1 WLR 3926
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