In one of the most anticipated costs judgments of 2013 the Court of Appeal upheld Master McCloud's decision to deprive Mr Mitchell of his legal costs, save for court fees, in the event of his succeeding in his libel action against The Sun newspaper. Mr Mitchell's solicitors had failed to file a costs budget in time resulting in the Master ordering that "the Claimant shall be treated as having filed a budget comprising only the applicable court fees." Mr Mitchell's subsequent application for relief from sanctions was refused.
Mr Mitchell appealed both the Master's original decision and her subsequent refusal to grant relief.
The question at the heart of the appeal was: how strictly should the courts now enforce compliance with rules, practice directions and court orders?
The Court, led by Lord Dyson, found that whilst there was some force in the Claimant's criticisms of the Master's reasoning they did not go to the heart of her judgment. In dismissing the appeal on both grounds, he concluded....
The Master did not misdirect herself in any material respect or reach a conclusion which was not open to her. We acknowledge that it was a robust decision. She was, however, right to focus on the essential elements of the post-Jackson regime. The defaults by the claimant's solicitors were not minor or trivial and there was no good excuse for them. They resulted in an abortive costs budgeting hearing and an adjournment which had serious consequences for other litigants. Although it seems harsh in the individual case of Mr Mitchell's claim, if we were to overturn the decision to refuse relief, it is inevitable that the attempt to achieve a change in culture would receive a major setback.
Stop Press: There is still hope. See Litigation Futures' exclusive article on the case of Adlington & 133 others v Els International Lawyers LLP (in administration), where relief from sanctions was granted following a failure to comply with an unless order. HHJ Oliver-Jones QC said “...the relationship between justice and procedure has not changed so as to transform rules and rule compliance into trip wires, and nor has it changed it by turning the rules and rule compliance into the mistress rather than the handmaid of justice"
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