A recent case relating to a case management decision on legal costs demonstrates the more stringent attitude of the Courts to procedural time limits in civil litigation cases following theJacksonreforms on 1 April 2013, in particular with regard to the penalising of material non-disclosure and missed deadlines.
The case Baker v Hallam Estates Ltd & Another was a defamation case, the facts of which are not pertinent to the case management decision on costs, suffice it to say that the defendant (D) had succeeded in the original claim against the claimant (C) with an order for costs being made in D’s favour on 15 May 2012, following which the judge directed there to be a detailed assessment of costs.
The background to costs proceedings is set out in the Civil Procedure Rules (CPR) Part 47.9 and is as follows. A receiving party (the party who is to be paid the costs, D in this case) commences the detailed assessment costs process by serving upon the paying party (the party who has to pay, C in this case) a Notice of Commencement and a copy of the Bill of Costs within 3 months of the date of the original judgment. Should the paying party wish to dispute any item within the Bill of Costs, they must, within 21 days from the date of service of the Notice of Commencement, serve a Points of Dispute. CPR Part 47.9(3) states additionally that any party that serves a Points of Dispute after that 21 day period “may not be heard further in the detailed assessment proceedings unless the court gives permission”. After expiry of the 21 day period and in absence of the service of a Points of Dispute, the receiving party may request that the court issues a Default Costs Certificate (CPR Part 47.9(4)).
Additionally, three other rules are relevant to this case: first, CPR Part 3.1(2) allows a party to apply to the court for an extension of time for a particular step; secondly, CPR Part 3.8(1) states that any sanction against a party who has failed to comply with a court rule will stand until and unless that party applies to court for and obtains relief from that sanction; and, finally, a new provision within the overriding objective at CPR Part 1.1(2)(g) sets out that greater regard must now (post-1 April 2013) be paid by the courts to the enforcement of compliance with court rules.
In brief, the key facts in this case were as follows. On 18 April 2013, nearly a year after the original order, D commenced detailed assessment proceedings. C then made a without notice application for an extension of time within which to serve its Points of Dispute to 18 June 2013. The application was made on 14 May 2013, the very last day of the 21 day time period. However, the application was issued the next day, 15 May 2013, a day late. C’s application also contained very little by way of the factual detail of the costs proceedings, including that C had failed to comply with some of the original order. The costs Master granted C’s application on 16 May 2013, unaware that the day before D had applied for a Default Costs Certificate. The Master then refused D’s subsequent application for the decision to be set aside, observing that C’s application was for an extension of time, not for relief from sanctions, there being no sanction from which to seek relief, and determining that C’s application was reasonable given D’s delay in commencing detailed assessment proceedings. C filed purported Points of Dispute on 17 June 2013. D appealed the Master’s decision.
HHJ Jeremy Richardson QC sitting as a High Court Judge observed at the beginning of his judgment that “the culture of civil litigation is in the process of change”. He noted that the courts were “now required to take a very much stricter view of the failure by parties to comply with directions …” (as per HHJ Pelling QC in Fons HF v Corporal Ltd EWHC 1278) and further observed that there must now be greater emphasis on compliance with rules, in particular in relation to procedural rules and time limits, which were not advisory and which demanded compliance.
The judge considered that the Master had erred as a matter of law in that, albeit that he had power to extend time, it had actually been necessary for him to consider under CPR Part 3.8 relief from sanctions, as a time limit had not been complied with and there was a clear sanction for such non-compliance, as set out at CPR Part 47.9(3).
He considered that C had been dilatory and should have made an immediate and timely application for an extension of time, with a candid recital of the facts. He felt that “those who wait to the 59th minute of the eleventh hour to take steps only have themselves to blame if something goes wrong”. As C’s application had been a late application on an ex parte basis relating to a time limit, it demanded “scrupulous examination”. C’s application had in fact contained material non-disclosure of relevant information, which had misled the Master who, the judge felt, would never have granted the extension (or the relief) if he had been fully apprised of the facts. The Master (through no fault of his own) had made an erroneous decision which, by a Default Costs Certificate not having been issued, had deprived D of that to which he was entitled. The judge, therefore, allowed D’s appeal.
Two key practice points emerge from this case that all present day civil litigators would do well to heed:
First, the courts will not now tolerate failures of compliance with rules without extremely good reason and any application for a relief from sanction will be rigorously scrutinised.
Secondly, in a without notice application full and frank disclosure remains of paramount importance, regardless of whether the application is for a freezing injunction in heavy-weight commercial litigation or merely for a short extension of time in costs proceedings.