Mott & Ano –v- Long & Anor (2017) EWHC 2130 (TCC)

This case has further examined the possibility of seeking relief from sanction in relation to late service of a Cost Budget, and the prospect of success in making an Application for the same.

Here the parties had been ordered to file and serve Cost Budgets however the Defendant failed to do so on time.  In fact the Defendant’s budget was served 10 days late and after the Claimant had felt compelled to remind them of their obligations in this regard.

The Defendant advised that the reason for the breach was a failure to properly save the Precedent H form to their IT system.  Within their Application for relief they did not however advise what the system error was or provide sufficient witness evidence in this regard.  The Judge did not therefore consider this to be a good enough reason for the default.

Issues to be considered in this matter and presented by the parties included:

– The Defendant did eventually serve a Cost Budget and this was provided 9 days prior to the CMC.

– The late service did not however leave enough time for a meaningful budget discussion report to be completed (just one day).

– This was a second cost budget.

– There were significant discrepancies between the parties’ budgets, the Defendant seeking £47,680.00 and the Claimant £281,000.00 (round terms).  The difference was said to be caused by converging views as to the expert evidence required and subsequent length of trial.

The latter point carried great importance here, the Defendant suggesting that as a result of the converging directions sought, the parties would have likely been ordered (in any event) to file revised budgets after the directions had been considered and confirmed by the Court, with a view to a Cost Management Hearing being listed thereafter.  In these circumstances the process of cost budgeting would not have been completed at the Case Management Conference in any event.

In providing his decision, His Honour Judge Grant advised that when noting the above and having regard to the third stage of Denton v TH White Ltd [2014] EWCA Civ 906 it was concluded the Defendant would be granted relief from sanction.  His Honour noted that:

The fact that the parties are now in precisely the same procedural position in which they would have been so far as the process of cost budgeting is concerned, had the defendants served their cost budget in time, is a highly significant circumstance in the case, and one to which the court should have proper regard.

They were however ordered to pay the Claimant’s costs of the Application.

There are a number of factors here that have leant themselves to successfully seeking relief – the fact the budget was still filed within reasonable time prior to the CMC, the fact this was a second, updated budget and the suggestion that in any event a second Costs Management Hearing would have been required.  Although the Defendant was ordered to pay the Claimant’s costs of their Application for relief, this was surely a small price to pay to ensure they could seek recovery of their costs (over and above Court fees) on conclusion of the claim.  Caution does however need to be applied; this does not necessarily provide a basis upon which relief will be granted on other cases and indeed it is mentioned throughout this judgment that all the circumstances of this specific case were considered. In cases involving fewer key points and where the cost budgeting process would have been concluded but for a breach it is unlikely such a favourable result will be achieved by the defaulting party.