Friday, 4 January 2019

BMCE Bank International Plc v Phoenix Commodities PVT Ltd & Anor

[2018] EWHC 3380 (Comm)

Under CPR rule 3.13(1)(b), the parties were required to file and serve costs budgets no later than 21 days before the CMC, which was by 27 September 2018. The claimant complied; the defendant did not, serving the costs budget much later, on 11 October 2018 at 4.32pm. Under CPR 3.14: “Unless the court otherwise orders, any party which fails to file a budget despite being required to do so will be treated as having filed a budget comprising only the applicable court fees”.

The effect of the late service was that no budget discussion reports were filed and it was not possible to deal with the question of the defendants’ costs budget at the CMC hearing. Instead the hearing was taken up with an application for relief from sanctions. The reasons for the failure to serve the budget on time were said to be an “oversight” and “genuine mistake”.

The Judge said that that was not a good reason and further the failure was, on any view, a serious breach. This was not a case of a near miss; it was filed two weeks late. In addition, the party in default did not make a prompt application for relief from sanctions. Failing to comply with the cost budgeting provisions hindered case management by the court and caused delays to the court, the other party and other court users. It was contrary to the need for litigation to be conducted efficiently and at proportionate cost. It would therefore have been “inappropriate” to give relief from sanctions. The Judge continued:

“It is important in all divisions of the High Court...that the parties comply with rules, practice directions and orders so that litigation can be conducted efficiently and at proportionate cost. It is also important that parties in commercial litigation before this court cooperate with each other in furtherance of the overriding objective. This means that whilst there may be cases where relief would obviously be granted, and no point is rightly taken, the rules, directions and orders of the court are there to be observed and for good reason. If there is a failure to comply, then an application for relief from sanctions should be made promptly, supported with evidence, after which it will be considered in accordance with CPR 3.9 and the established principles I have identified.” 

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