COSTS AFTER RELIEF FROM SANCTIONS: A SUMMARY ASSESSMENT

An earlier post looked at the decision of Mr Justice Edwards-Stuart in North Midland Construction plc -v- Geo Networks Ltd [2015] 2384 (TCC).  Here we look at the subsequent order in relation to costs.

THE CASE

The claimant failed to serve particulars of claim in two actions on time.  Relief from sanctions was granted in relation to one action but not for the other.

KEY POINTS

  • The judge was willing to summarily assess those costs that the claimant had to pay the defendant in relation to the action where relief from sanction was not granted.
  • The claimant was held liable to pay the costs of the application where it obtained relief from sanctions.
  • The claimant’s conduct of the matter had not been exemplary.
  • Given the history of the matter it was reasonable that the claimant pay the defendant’s costs of the applications.

THE JUDGMENT ON COSTS

In the judgment on costs in relation to the applications  [2015] EWHC 3063 (TCC)

  1. This judgment concerns the costs of two applications by the Defendant to strike out the claim form in two actions brought by the Claimant, the Project Yellow claim and the Fibrespeed claim, for failure to serve Particulars of Claim within the relevant time limit. In each case there was a reciprocal application by the Claimant for relief from sanctions. In the Project Yellow claim I granted relief. In the Fibrespeed claim I refused relief and struck out the claim form.

  2. Two questions remain in relation to costs. First, whether the costs of the application in the Fibrespeed claim should be the subject of detailed assessment and, if not, the amount in which they should be summarily assessed. Second, who should pay the costs of the application in the Project Yellow claim and, if the Claimant, the amount in which those costs should be summarily assessed.

  3. Both parties have made written submissions on these points.

The Fibrespeed Claim

  1. I am prepared to assess the costs summarily. The Claimant complains that the rates charged are too high for solicitors in Sheffield and challenges both the number of fee earners involved and the amount of hours alleging, amongst other things, duplication. There is also a challenge to the fees of leading counsel.

  2. I think that there is a little force in each of the first three points, but I bear in mind the fact that matters were complicated by the fact that the Claimant’s solicitors often referred to the wrong claim in correspondence and on occasion failed to explain clearly what they were doing. I do not consider that there is anything in the challenge to counsel’s fees.

  3. Taking a broad view, I consider that the figure of £9,496.18 claimed in respect of the solicitors’ costs should be reduced to £8,500. I therefore assess the total costs at £17,850 (rounding down to the nearest pound).

The Project Yellow Claim

  1. As I explain in paragraphs 39-43 of the main judgment, having been granted more than one extension of time for service of the Particulars of Claim, the Claimant took no steps to obtain a further extension until the day before the final deadline for service was due to expire. In the main judgment I described that as cavalier (paragraph 48).

  2. The Particulars of Claim were finally served on 20 July 2015, the day before the hearing of the applications. As I said in the judgment, the fact that service took place on that date may have been prompted by the Defendant’s application: indeed, I consider that it probably was.

  3. Given the history, I am quite satisfied that the Defendant was fully entitled to make an application to strike out the claim form once the date for service of the Particulars of Claim had passed. By the time Particulars of Claim were eventually served, the costs of the Defendant’s application had been incurred and, subject to one point, a hearing on 21 July 2015 in relation to that claim was inevitable because the Claimant had to apply for relief from sanctions in any event. The Defendant’s application to strike out was simply the obverse of the Claimant’s application for relief from sanctions.

  4. The one point, on which the Claimant relies, is a letter dated 17 July 2015 (but not sent until 6:56 pm) – this being the Friday before the hearing on the following Tuesday. That letter, marked “Without prejudice, save as to costs”, was in the following terms:

TCC Claim No. HT-2014-000045 and HT-2015-000036

We are making an application for relief from sanctions in relation to your applications to strike-out the Claim Forms.

The purpose of this letter is to put forward an offer in relation to costs in the hope that the Applications can be compromised and Court time is saved.

In the event that our application for relief is agreed and your application is withdrawn we will:

1. Pay your reasonable costs of our application for relief from sanctions.

2. Bear our own costs of your application to strike out the claim.

In the event this offer is not accepted and the hearing proceeds, we reserve the right to draw this correspondence to the attention of the Court on the matter of costs.”

  1. As is clear from its face, this letter did not distinguish between the two actions. It therefore did not address the possibility that the Defendant’s application to strike out might succeed in one case and fail in the other. It is also unclear as to whether the reference to the Claimant paying the Defendant’s “reasonable costs of our application for relief from sanctions” was intended to embrace also the Defendant’s costs of its own applications to strike out. On a fair reading of the letter, in my view it did not.

  2. But, in any event, the Defendant did better than this offer because it succeeded in its application to strike out the Fibrespeed claim. Accordingly, this offer does not assist the Claimant.

  3. I have already concluded that the Defendant was fully entitled to make an application to strike out the Yellow Project claim at the time when it did. The Claimant was largely saved because it managed to serve its Particulars of Claim in the nick of time – having been jolted into doing so by the Defendant’s application.

  4. When considering who should bear the costs of the Project Yellow applications, in my view the court is entitled to take into account the Claimant’s conduct overall – not just in relation to delay generally, but the manner in which it conducted correspondence (by frequently using incorrect claim numbers, for example) and, in particular, the way in which its solicitors used the signed consent to the extension of time in the Project Yellow claim in an attempt to obtain a similar extension of time for the Fibrespeed claim.

  5. The pursuit of the Defendant’s application to strike out the claim form in the Project Yellow claim at the hearing on 21 July 2015 added very little, if anything, to the overall costs of the application or of that hearing. It was not until the Particulars of Claim were served, on the day before the hearing, that the Claimant was really in with a chance of resisting successfully the application to strike out the claim form.

  6. For these reasons, I consider that the Claimant must pay the Defendant’s costs of the applications in the Project Yellow claim.

  7. I can deal briefly with the assessment of the Defendant’s costs because the Claimant makes exactly the same points in relation to them as it did for the costs in the Fibrespeed claim. It seems to me that I should follow the same course and reduce the solicitors’ costs in the same proportion. In round terms this involves reducing the figure of £10,505.60 to £9,400. As before, I regard counsel’s fees as reasonable given the importance of the applications. I therefore assess the costs in the Project Yellow claim in the sum of £18,750.88.

  8. In both claims, those costs are to be paid within 14 days of the handing down of this judgment.

RELATED POSTS

ON SUMMARY ASSESSMENT

OTHER GUIDES TO SUMMARY ASSESSMENT

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: