The Jackson reforms have been with us for nearly six months now. While the abolition of recovering success fees and premiums was met with cheer, the procedural changes and the approach of the courts to enforcing the new rules – particularly when seeking relief from sanctions - have been met with some trepidation by the profession. We set out below how the courts have been applying their new powers.
Costs budgets and assessment
- Elvanite v AMEC: the defendants served a cost estimate immediately before trial that doubled their previously approved budget. They won at trial, but lost their application to amend the budget because it had been made too late and should have been made as soon as the budget was exceeded.
- Baker v Hallam Estates Ltd: the court allowed an appeal against an order extending time for serving points of dispute in detailed assessment proceedings, where the application for an extension of time was issued after the 21 day time limit had expired.
So when it comes to costs budgets and detailed assessment, the court have upheld their end of the bargain and appear to be taking a robust approach.
Complying with case management directions and rules
In slight contrast, the courts appear to be taking a mixed approach to how they are dealing with applications for relief from sanctions:
- Fons HF v Corporal Ltd: the parties failed to comply with a court order requiring them to “serve” witness statements. The claimant’s solicitors were ready but chose not to serve because the defendant could not reciprocate. The court came “very close” to refusing an extension for either party to rely on witness evidence. They pointed to the fact that the order required the parties “to serve” and not “exchange” witness statements and so the defendant’s inability to serve did not effect the claimant’s duty to comply with the order.
- Venulum Property Investments Ltd v Space Architecture Ltd: the claimant served the claim form in time but missed the deadline for serving the particulars of claim and had to make an application for an extension of time. The stakes were high because limitation had expired. In refusing the application, the court took a holistic approach in stressing the importance of the need to “consider all the circumstances of the case”, including the five year delay before the claimant instructed solicitors and the fact that the underlying claim was not strong on the available evidence.
- Re Atrium Training Services Limited: the court granted an extension of time for disclosure, despite numerous past procedural breaches. While the court underlined the strictness of the new regime, they also took into account the fact that the extension had been sought before the deadline had passed and that when setting directions for disclosure, statements and expert evidence, there can be many imponderables.
Points to note
- The courts are prepared to take firm action if their rules or orders are breached.
- It should not be assumed that an honest mistake or a “minor” delay will persuade the court to grant relief from sanctions.
- Read court orders carefully. Identify what obligation is being imposed on which party to do what, by when and how.
- It is better to incur the cost of making an application to extend a deadline before it is missed (and the prospect of success is far greater).