In a Judgment handed down on 14 March 2013, the Court has sent a powerful message to all parties, and to their solicitors, about the immediate and painful financial consequences of ‘manoeuvring’ and seeking to frustrate effective judicial case management. We can expect to see an increase in such decisions in the period before and following implementation of the Jackson costs reforms on 1 April 2013.

In this High Court (TCC) decision, Judge Edwards-Stuart saw fit to adopt a firm line with the Claimant’s solicitors and to exercise his discretion to penalise them severely on costs. This type of case and costs management intervention, at an early procedural stage, is likely to become an increasingly common feature in litigation until parties and their solicitors become accustomed to the change in rules and culture. In the meantime, the financial penalties imposed will be a source of potential friction between client and lawyer, particularly where the relevant risk factors have not been adequately explained.

In Webb Resolutions Limited v JV Limited, Edwards-Stuart J ordered that there should be a preliminary issue hearing on (1) whether the Claimant has proper title to sue and (2) the allegations of contributory negligence, at a Case Management Conference on 23 November 2013. He then invited the Claimant’s legal team to prepare an appropriate draft order for agreement by the Defendant’s legal team and approval by the judge.

This should have been straightforward, but the Claimant drew up a draft order which bore no relation to what the judge had directed. In particular, the Claimant sought to avoid the requirement for there to be a preliminary issue trial. When the Defendant objected and produced an alternative version, the Claimant attempted to argue that it was experiencing difficulty in drafting the order in a way to give effect to the court’s wishes.

Over the next three and a half months, the parties continued to correspond on this issue, with the Claimants making various alternative proposals, but still refusing to put the court’s original order into effect. Just three days before a further CMC, which had been listed for 8 March 2013, the Claimant backed down and consented to an order that was substantively the same as the version initially produced by the Defendant. The Claimant attempted to vacate the CMC, but the judge directed that it should proceed.

Wholly unreasonable

The Defendant’s principal submission was that it should be able to recover from the Claimant the costs it had incurred unnecessarily over the previous three and a half months in attempting to agree the wording of the order. The Claimant countered that it had experienced difficulty in drafting the order. This was rejected as being ‘disingenuous’ by the judge, on the basis that Rosling King, acting for the Claimant, was simply trying to produce an order which reflected what they would like to have, rather than what the court had ordered.

Edward-Stuart J stated that the Claimant’s approach was “wholly unacceptable. It is not just unreasonable, it is verging on contumelious (to use an old fashioned, but completely apt, adjective).” He stated that there is a proper process to be followed if a party wishes to apply to amend or appeal an order. That party is not permitted to circumvent this, either with or without the consent of the other party. The Claimant’s justification for doing so was seen to be “defending the indefensible”.

Edward-Stuart J provided a general warning that the rationale behind his judgment should have a wider application. He stated “In my judgment, what occurred in this case must not happen again. Solicitors and counsel are to give effect to court orders; they are not to attempt to manipulate them to their own or their client’s perceived advantage.”

Sting in the tail

In view of the Claimant’s conduct, Edward- Stuart J ordered the Claimant to pay 80% of the Defendant’s costs within 14 days. In doing so, he exercised his discretionary powers to penalise the Claimant’s conduct in an exemplary manner.

Implications

  • Where a judge makes an order, it is incumbent on the parties to put this into effect promptly. If there are genuine objections, these must be brought to the court’s attention in the appropriate manner. It is impermissible for a party to attempt to circumvent the judge’s directions
  • If a party behaves inappropriately or adopts an indefensible position, then the court will not hesitate to intervene and hold that party to account
  • Where appropriate, the court may exercise its wide discretion to penalise a party on costs. This can be done swiftly, with a summary assessment of costs, even at the Case Management stage
  • Rather than being an isolated example of incisive case management, we are likely to see an increasing amount of such robust judicial intervention