Legal Costs update by Gary Knight

The mild winter appears to have been reflected in the judgments handed down; the odd chill but compared to previous years nothing yet of great concern.

CIP Properties (AIPT) Ltd v Galliford Try Infrastructure Ltd  and Various Other Parties –Coulson J – 29/10/2014 [2014] EWHC 3546 (TCC)

A significant matter wherein the Defendant sought some £18 million from the Defendant contractor with Third, Fourth, Fifth and Sixth Parties joined.

The decision of Coulson J dealt with case management and time tables though he was also required to consider the issue of budgets. The matter had commenced at a time when the filing and exchanging of budgets was not compulsory as the mandatory limit was £2 million when the claim started (indeed the sum sought was significantly higher that the revised mandatory limit of £10 million), however the Defendant invited the court to exercise its overriding discretion to order the provision of costs budgets. The Defendant’s application was, not unsurprisingly, supported by the various third parties but opposed by the Claimant.

Two points of issue were identified:

1) Was there, in fact, any discretion?

2) If yes was the discretion fettered?

On point one Coulson J was in no doubt that the court had discretion referring to the original wording of CPR 3.12(1).

In respect of point two Coulson J was of the view that the exercise of the court’s discretion was unfettered finding nothing in the CPR to suggest otherwise.  He held that discretion “extends to all cases where the claim is for more than £2 million (old regime) or £10 million (new regime)”.

Coulson J went on to add that in cases where an application was made for the filing and exchanging of costs budgets, the court had to “weigh up all of the particular circumstances of the case” and in order to decide whether to exercise its discretion the court should be provided with such budgets.

A further point considered was a submission made on behalf of one of the Third Parties that the Defendant should provided a number of different costs budgets, dealing with the defence of the claims of the claimant, and then separately with its claims against the other parties. Coulson J agreed with the Defendant that such an exercise would be “unfair and not in accordance with the overriding objective”.

Altomart Ltd v Salford Estates (No. 2) Ltd– CA (Civ Div) – 29/10/14 [2014] EWCA Civ 1408

A number of decisions provided to remind all that Mitchell is far from gone or forgotten, the above is but one example.

The Court of Appeal considered the approach to be adopted to applications under CPR r3.1(2)(a) for an extension of time to serve a respondent’s notice

Salford had appealed a decision to stay a winding up petition; on advice from Counsel no Respondent’s notice was filed however newly instructed Counsel took a different view thus Altomart applied for an extension of time to serve a respondent’s notice under CPR 52.5(2)(b) – the “notice” was over one month late and in reliance on Mitchell, Salford opposed the application.

As the application was not one seeking relief from sanction the COA was required to consider whether Mitchell principles where applicable at all.  Finding that the application for permission to appeal out of time was analogous to an application under r.3.9 the COA held that the application was therefore to be decided in accordance with the same principles holding that the “Mitchell principles therefore applied with equal force to an application for an extension of time”.

The COA then considered (i) the delay – 36 days late; (ii) the appeal would not be heard for some months (iii) Salford would not suffer any undue prejudice if the extension was granted.

Finding that the delay could not be described as a serious or significant breach of the rules and there being nothing else in the conduct of the proceedings or more generally that militated against granting relief the application was granted.

Cutler v Barnet London Borough Council– QBD – Supperstone J – 31/10/2014

Within possession proceedings an order for disclosure had been made against Ms Cutler and when she failed to comply the Council applied for judgment and an order striking out her defence for non-compliance. An unless order was made for the disclosure to be provided within 14 days and subsequently the judge found that the disclosure provided had been incomplete. During the course of the hearing Ms C made an oral application for relief from sanctions however the judge found that any such application had to be filed formally under CPR pt 23 which had not been done thus he had no power to consider it and no discretion to grant relief and Ms C was debarred from defending the claim.

The issue before Supperstone J was whether the judge had had discretion to consider an application not formally made in writing.

Finding nothing in CPR r 3.8 nor r 3.9 required the application to be made in writing it was held that the judge had had the power to consider the oral application; indeed it was noted that the court of its own motion could consider relief from sanction. It was further added that the judge should have balanced the r 3.9 factors with proportionality and the CPR’s overriding objective and in failing to do so debarring Ms C from defending the possession claim had been a breach of article 6.

Daniel Hegglin v (1) Person(s) unknown (2) Google Inc. – QBD – Edis J -14/11/14 – [2014] EWHC 3793 (QB)

A matter no doubt familiar to most involving a costs capping application by the Claimant against Google, in the alternative a costs management order amending Google’s budget.

Costs budgets had been exchanged with Google’s budget indicating costs of £1.68 million by the end of the trial, approximately £1 million higher than the Claimant’s budget.

The Claimant sought to cap the budget at £1.25 million being the sum incurred by Google to-date.

The Claimant submitted that a costs cap was an appropriate means of the court imposing control over the risk of incurring disproportionate costs whereas Google submitted that the proceedings had reached the stage where a costs capping order was inappropriate as the bulk of the costs had already been uncured.

Edis J commented that the amount of Google’s costs was “surprising” and that the difference between the budgets suggested that Google’s costs were not “proportionate to the true nature of the dispute”; however a costs capping order was not appropriate and given it was considered that the costs incurred “seemed so high” Edis J considered that detailed assessment was “effective protection”.

R (on the application of DINJAN HYSAJ) v Secretary of State for the Home Dept CA (Civ Div) – 16/12/14 – [2014] EWCA Civ 1633

A pre Christmas reminder that applications for extensions of time to file notices of appeal under CPR r3.1(2)(a) had to be determined using the principles governing applications for relief from sanctions with both Mitchell and Denton to be considered and the fact that an appeal raised questions of public law rather than merely private rights, did not mean a more lenient approach should be adopted. The COA made reference to its earlier decision in Altomart (above).

The COA did however add that the more robust approach to compliance with the rules typified by Mitchell should not be taken as encouragement to refuse reasonable extensions of time or to seek a tactical advantage in every minor default.

The inability to pay for legal representation was not to be regarded as good reason for delay and the merits of the substantive appeal had little relevance in the decision whether to extend time.