Relieved to be granted relief!

On the importance of not assuming and making sure directions are complied with. Always file your Costs Budget on time. We look at K/S Mountain Invest v Ducat Maritime Ltd [2023] EWHC 939

The Defendant had failed to file their Costs Budget at the requisite 21 days prior to the CCMC, not filing their Costs Budget until 7 days prior to the listed hearing. Necessitating an Application for Relief from Sanction to avoid being restricted to a Court fees only Costs Budget.

Whilst relief was granted HHJ Keyser KC commented that he did consider the matter to be borderline.

The Defendant’s Application for relief from Sanction was supported by witness statements which admitted that the Defendant had deliberately not filed a Costs Budget on time as it was their belief that the matter would settle before the CCMC and therefore the Costs Budget would not be required. This proved not to be the case and the Defendant had therefore filed their budget and an application for Relief from Sanction under CPR 3.9.

In assessing the merits of the application, the Court referred to the case of Denton and Others v TH White Ltd [2014] EWCA Civ 906; [2014] WLR 3926 and the 3 tests set out therein.

The first test of whether the breach was serious or significant was covered by the witness statement of the Defendant’s KC in which it was accepted that the failure to file a Costs Budget until 7 days prior to the hearing was serious.

The second test of whether their was good reason for the breach and in this instance the Defendant put forward their argument regarding their assumption that the case would settle, and a budget would not be required. In which the Court found that there did not appear to be any reasonable grounds for that assumption and there was therefore no good reason for the breach.

The third test justice or impact of the breach of proceedings was then considered. In this instance the Defendant was perhaps greatly helped by the Claimant’s approach and the fact that Costs Budgets were able to be filed and agreed prior to the CCMC hearing, meaning that proceedings were not subject to any delay and further Court time would not be required.

HHJ Keyser KC concluded that whilst the breach was serious and without good reason and was in fact intentional, on realising that claim was not going to settle the  conducting solicitor had acted promptly to file their Costs Budget and request Relief from Sanction. It was agreed by all parties that the breach had led to minimal disruption in the costs management of the case. Budgets had been agreed and on that basis the application to Relief from Sanction would be granted.

The first take away from the judgement must be that despite what path you assume litigation will take, always comply with CPR requirements.

Should you find yourself falling foul of a Court deadline, all may not be lost, if your opponent is willing to take as reasonable and cooperative approach as evidenced here and any disruption to the costs management kept to a minimum.

Though you may have to be equally reasonable on those budget phase figures.

How can PIC help?

Whilst PIC would always recommend filing your Costs Budget on time, in busy practice dates can be missed. PIC have the ability to turn round Costs Budgets as a matter of urgency and can also assist with timely Applications for Relief from Sanction.

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