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Consequences of failing to comply with costs budgeting rules

The High Court deprived a party of its costs entitlement beyond court fees in the event of success for failure to comply with PD 51D para. 4.2.


The full force of the post Jackson costs management regime and the new stricter application of Rule 3.9 was felt in August 2013 with Master McCloud's judgment in Andrew Mitchell MP v News Group Newspapers Limited, concerning the Sun Newspaper's coverage of the 'Plebgate' affair. Relief was sought from sanctions imposed by Master McCloud in June 2013 for Mr Mitchell's failure to engage in attempts to discuss budgets and budgetary assumptions (PD51D para 4.1) and a failure to comply with PD 51D para. 4.2 namely a failure to file and exchange a budget no later than 7 days prior to the CMC. The sanction was that Mr Mitchell would be limited to a budget consisting of the applicable court fees for his claim.

Relief was sought on several grounds including the fact that:

  • Mr Mitchell's solicitors, Atkins Thomson, is a small firm, with 2 London partners and in contrast with the Defendant, "a national newspaper with an established firm acting for it."
  • Two of Mr Atkins’ three trainee solicitors were on maternity leave, and the senior associate solicitor recently left the firm – and it was that member of staff who used to deal with cost budgeting.
  • The firm was engaged in work on other litigation notably the Mobile Telephone Voicemail Interception Litigation (MTVIL) and “at certain periods this can place huge pressure upon resources”

Master McCloud was unpersuaded, determining that...

"The explanations put forward by the Claimant’s solicitors are not unusual ones. Pressure of work, a small firm, unexpected delays with counsel and so on. These things happen, and I have no doubt they happened here. However even before the advent of the new rules the failure of solicitors was generally not treated as in itself a good excuse and I am afraid that however much I sympathise with the Claimant’s solicitors, such explanations carry even less weight in the post Jackson environment...

"Budgeting is something which all solicitors by now ought to know is intended to be integral to the process from the start, and it ought not to be especially onerous to prepare a final budget for a CMC even at relatively short notice if proper planning has been done. The very fact that the Defendants, using cost lawyers, were well able to deal with this in the time allotted highlights that there is no question of the time being plainly too short or unfairly so..."

The Master gave leave to appeal of her own motion in view of the absence of authority on precisely how strict the courts should be and in what circumstances.

Full Judgment

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