District judge did not err in refusing relief from sanctions where costs budget filed a day late

The defendants filed their costs budget a day late. The automatic consequence under the rules is that they cannot recover any more than court costs if they win, unless relief from sanctions is permitted. The district judge refused to grant relief and so the defendants appealed. That appeal has now been dismissed.

The defendants argued that the breach had not been serious because the parties had still been able to engage in debate about the costs estimates and there was little dispute about the defendants' costs (which were estimated to be about half of the claimants' budget).

It was held that the district judge had not erred in finding that the breach was serious (the appeal from that decision was a review, and not a rehearing, by the appeal court). Whilst the actual impact on the ability to perform a task required by an order is very important, the authorities do not suggest that it is the overriding factor: "In my judgment, in evaluating the seriousness of breach, a court is entitled to consider the risk of difficulty that the failure to meet a deadline has created even if, in the event, it has been possible to perform the task required, notwithstanding the breach. That is particularly legitimate in the case of orders whose performance requires a degree of co-operation because, in such cases, even though it may be possible for the non-defaulting party still to do what is required as well, it may make it more inconvenient and costly, since extra time may need to be made available. That may be all the more so, if the number of effective working days to complete a co-operative task is limited, thereby reducing flexibility".

The judge was also entitled to take into account the distraction caused by a debate between the solicitors as to whether the time limit had been breached: "if a party in breach takes rapid and reasonable steps to minimise the impact of any default on the opposite party and the court, the court may conclude that a minor breach has been kept minor … leading to it being treated as less serious".

Nor had there been any reasonable excuse for the default. The defendants' solicitors had miscalculated the time for filing the costs budget and: "while it is true that some judges may have taken a more charitable view as to the calculation of time and whether days had to be clear or not, I am unable to say that the judge's evaluation was clearly wrong in this case". Although an error by a legal representative can provide support for the grant of relief against sanctions, this factor did not have to be treated as of significance in this case.