Freeborn & Anr v Macal (t/a Dan Macal Architects)

[2017] EWHC 3046 (TCC)

On 20 September 2017, the TCC court office wrote to the parties fixing the Case Management Conference (CMC) on 24 November 2017. The letter required the parties “to file and exchange costs budgets not less than 7 days before the CMC”.  This was in contrast to CPR 3.13, which requires all parties to file and exchange budgets no later than 21 days before the first CMC. Marcal’s solicitors relied on the letter and did not serve the costs budget until 16 November 2017. At no point prior to this did Freeborn’s solicitor complain that he was waiting for the costs budget. However, on service of the costs budget, Freeborn’s solicitor did take the point. Marcal’s solicitor explained its position but noted that if they were forced to make a court application to address the alleged delay, then they would seek any associated costs. Freeborn’s solicitor persisted and took the point that as a result of the late service of the costs budget, Marcal should be treated as having filed a budget comprising only the applicable court fees, and no legal or expert costs. Marcal’s solicitor therefore had to make a formal application for relief from sanctions, supported by witness evidence.

Mr Justice Coulson held that Marcal was not required to make an application for relief from sanctions. Rule 3.13(1) stated that the 21-day period applied, “unless the court otherwise orders”. The court office letter amounted to the court “ordering otherwise”. It set out when the costs budget should be provided. Marcal was quite entitled to conclude that the court had “ordered otherwise” and to rely on the content of the letter. The Judge said that a “busy litigation solicitor is entitled simply to rely on the date specified in writing by the court office, rather than embarking on an investigation into whether or not the letter contained an error”.

The breach was not serious and significant. No hearing was lost and there was no delay to the costs budget process. Once the error was pointed out, Marcal’s solicitor took immediate steps to discuss the budget. As a consequence, the costs budget was dealt with at the CMC and the estimated figures were agreed. It was just and reasonable to grant relief. There was no deliberate breach. There was, at worst, an inadvertent breach because there was reliance on a letter from the court office. There would be considerable prejudice to the defendant if he was not able to rely on his costs budget. As a result, the application was granted and the claimant had to pay the costs of £1,300. Mr Justice Coulson concluded that:

“It is, of course, extremely important … for the parties to civil litigation to ensure that they comply with the CPR. Courts will be far less forgiving of non-compliance than they ever used to be. But that tougher approach must not be abused in the way that occurred here. Parties need to consider carefully whether the alleged breach of the rules is, on analysis, any such thing and, even if it is, whether it is proportionate and appropriate to require or oppose an application for relief from sanctions in all the circumstances of the case.”

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