The decision in Mitchell is already having a major impact on day to day litigation. This is the first of a series of posts which looks at the Mitchell decision and deals with the practical steps that practitioner’s must take to “survive” in a post-Mitchell world.
LOOKING AT THE FACTS
Although the circumstances surrounding “plebgate” are well known the facts that led up to the Mitchell decision in the Court of Appeal are not. Understanding the Mitchell case is key to survival in the post-Mitchell regime and it is worthwhile spending a little time looking at what led to the decision in that case.
The facts leading to default
Mitchell was a defamation claim. Defamation claims were subject to a pilot scheme in relation to costs budgeting. On the 5th June 2013 the Master ordered there be a costs budget hearing on the 10th June 2013. This was deferred to the 18th June 2013 (because of late service). Under the Rules the costs budget had to be filed 7 days before the hearing. The Defendant filed a budget. No budget was received from the Claimant. The Master sent out an e-mail asking where the Claimant’s budget was. The judgment reads
“The defendant used outside costs lawyers to prepare its costs budget which it filed on 11 June. Its budget figure was £589,558. The claimant’s solicitors prepared their costs budget in-house. At 12.14 pm on 17 June, Master McCloud sent an email to the parties’ solicitors noting that there was no budget from the claimant on the court file and asking whether the parties’ budgets were agreed. The defendant’s solicitor replied at 12.27 pm the same day saying: “… despite a number of written promptings from me to exchange costs budgets the Claimant’s solicitors have not replied or provided us with a copy of their Costs Budget”. At 12.44 pm, the claimant’s solicitors emailed the Master saying:
“Apologies, we have yet to be able to finalise the Claimant’s Precedent H budget as we have been delayed in receiving Counsel’s figures despite chasing for these daily since the middle of last week. We aim to file the document in the next two hours and exchange with the Defendant.”
- In the event, the claimant’s solicitors filed their budget during the afternoon of 17 June.
- The parties attended before the Master on 18 June. The claimant was represented by counsel and the defendant by its solicitor. The defendant’s solicitor said that there had not been sufficient time to consider the claimant’s budget. The Master had to decide what to do in view of the fact that the claimant’s costs budget had not been lodged with the court at least 7 days before 18 June. She was told by the claimant’s counsel on instructions that the reason why the budget had not been filed until the previous day was “to do with pressure of litigation elsewhere in the firm on another case”. She noted that this explanation was at odds with what she had been told in the email. At para 9 of her judgment, she said:
“So what we have here is a position where a defendant has attempted to comply with the rules and has produced a budget and has engaged with the process and the claimant has not produced a budget and has not engaged until the very last minute in response to prompting from myself dealing with the costs management in the afternoon of the day before. On any basis that is a breach of the Practice Direction 51D and of the overriding objective in my judgment.””
The Master found that there was a breach of the rules.
“17. All that is missing in Practice Direction 51D is a stipulation as to the nature of any sanction. It is simply left at large to the court, but I consider that professionals have now had ample warning for many months that the court would adopt a strict approach to the interpretation of application and rules and orders and it should come as no surprise that, subject to any powers I have to grant relief from sanctions, the sanction I should impose is that the claimant’s budget will be limited to the court fees. The claimant has the right to apply for relief from sanctions and I will adjourn the costs budgeting hearing, and matters can resume either to deal with any applications supported by evidence or to deal with costs budgeting, or both as appropriate in due course.
Accordingly, she made an order in the following terms:
“1. The Claimant shall be treated as having filed a budget comprising only the applicable court fees.
2. The Claimant shall be entitled to apply for relief from sanctions, the hearing of the application to be heard at 2 pm on 25 July 2013, alongside the adjourned Case management and Cost Budget Hearing….””
RELIEF FROM SANCTIONS NOT GRANTED
Key points to note
1. Mr Mitchell’s had actually prepared a budget which was before the Master at the first hearing.
2. That budget, however, was served six days late.
3. It was the fact that the budget was served six days late that led to the sanction being in place.
4. As a result of that breach Mr Mitchell’s solicitors are continuing the litigation but have no realistic possibility of getting paid for their work.
- It is notable that the Defendant sent its costs budget out to external cost lawyers for drafting. Given the evidence that was adduced of the Claimant’s firm being overworked and understaffed it would (admittedly with the wisdom that hindsight invariably brings) have been prudent to consider outsourcing the preparation of the costs budget.
- If you are too busy to do the job on time – consider outsourcing it. It could save a lot of anguish.