An expensive mistake by claimant solicitors has led to further guidance on when costs budgets are required. Leigh Nagler considers the recent Court of Appeal decision in Suriaya Jamadar -v- Bradford Teaching Hospitals NHS Foundation Trust which confirmed that even where matters proceed on the basis of a quantum only dispute, they are to remain within the costs management regime and costs budgets are still needed.
The claimant brought a claim for clinical negligence which resulted in the amputation of one of the claimant’s legs. The claimant valued the claim at £3 million. The court sent a notice of proposed allocation to the multi-track following which liability was admitted and judgment was entered against the defendant trust for an amount to be determined.
The court listed the matter for a case management conference (CMC). The defendant prepared, filed and served a costs budget but the claimant did not, despite the defendant requesting one. At the case management hearing, the court ordered directions in relation to five experts for each party and listed the matter for a five day quantum only trial. The district judge also approved the defendant’s costs budget and noted that the claimant had failed to produce one.
It was ordered that the claimant’s recoverable costs would be restricted to court fees only as per CPR3.14. The judge held that Mitchell should apply due to the facts being so close to Mitchell. The claimant stood to lose a significant amount of costs as a result of the sanction and applied to vary the order and obtain relief from sanctions. This request was refused by a circuit judge who held that the case was very clearly a multi-track case and that the claimant was plainly in breach of the relevant rules. The circuit judge applied the principles in Mitchell and Denton and refused relief from sanctions. The claimant appealed to the Court of Appeal.
At the Court of Appeal the case was heard before Lord Justice Jackson and Lord Justice Lindblom who upheld the first instance decision to refuse the claimant relief from sanctions. Both judges agreed that the status of this claim was clear; it was a multi-track claim due to its high value and extensive expert and witness involvement.
The court held that the district judge had been wrong to find that the instant case was factually so close to Mitchell that he was bound to follow it. However, the circuit judge had been correct to apply the three-part test in Denton on the basis that:
- there was a serious breach by the claimant, which would result in a further CMC, wasting costs and time
- there was no good reason for the breach
- taking account of the circumstances of the case the circuit judge had made a decision within the ambit of his discretion.
Lessons to be learnt
There are important lessons to be taken from this case. Claimants should comply with the rules in relation to budgeting and to take on board comments and requests from defendants. Defendants may wish to bring any failures to the attention of the court and suggest that sanctions are applied when necessary.
The crucial lesson to be learnt from this case is that the costs management regime still applies to quantum only disputes. In the event that costs budgets are not filed the relevant rules under CPR 3 will apply as does the automatic sanction at rule 3.14.