Plebgate and costs budgets – The Sun off the hook for big bucks

27 November 2013 by David Hart KC

Mitchell v. News Group Newspapers 27 November 2013, CA  read judgment

We all know the story about how Andrew Mitchell MP may, or may not, have tried to barge past policeman in Downing Street with the memorable phrase “you’re f…ing plebs”. Like a lot of good stories, it may not be true, and like a lot of good stories it was picked up by The Sun. So Mr Mitchell sues The Sun in libel on the basis that it is untrue.

But this decision of the Court of Appeal is all about the reforms initiated by the man to my left, Sir Rupert Jackson, also a judge in the CA, who has shaken up the whole system of legal costs in civil litigation. And one of the major steps he has taken is to compel litigants to say what they intend to spend on a case early on – the costs budget – so that the judges can make some assessment of whether the thing is to be run sensibly or extravagantly.

Cue the present argument, where our MP’s lawyers do not file their costs budget on time, which is 7 days before the relevant hearing. So the parties go before the court, and The Sun says – we did our bit on time but we only got their budget yesterday, and we are not ready. To cut a long story short, The Sun now stand to recover a budgeted figure of £589,555 if they win, but our hapless MP (or his lawyers) will only recover his court fees if he wins.

How so?

The relevant rule (CPR 3.14) provides that 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. Another rule in the CPR gives a party a chance to ask for relief from such sanctions.

The Master, who reached the decision originally, was unimpressed by the explanations given by the lawyers – which went along the lines of very busy…short-staffed….barrister did not tell us what he was going to charge.. So no good reason for allowing a late budget to go in.

The question for the Court of Appeal was whether this was wrong.

In the old days, it would undoubtedly have been set aside, because justice was seen as something to be done between the parties, and the parties alone. Jackson LJ, on the other hand, following his reforming predecessor, Lord Woolf, believes in a wider justice, namely ensuring that other court users are also not affected by the lack of compliance within a given case.

The Sun was handed a bit of a gift, as the CA explains

The importance of the court having regard to the needs and interests of all court users when case managing in an individual case is well illustrated by what occurred in the present case. If the claimant had complied…the case would have proceeded…. Instead, an adjournment was necessary and the hearing was abortive. In order to accommodate the adjourned hearing within a reasonable time, the Master vacated a half day appointment which had been allocated to deal with claims by persons who had been affected by asbestos-related diseases.

So messing up one case messes up other people’s cases as well, and those cases may be really serious ones.

The CA thus decided that the Master was not wrong, and hence our MP’s costs budget was indeed limited to the court fee. They acknowledged that it was a “robust decision.” But the Master

was, however, right to focus on the essential elements of the post-Jackson regime. The defaults by the claimant’s solicitors were not minor or trivial and there was no good excuse for them. They resulted in an abortive costs budgeting hearing and an adjournment which had serious consequences for other litigants. Although it seems harsh in the individual case of Mr Mitchell’s claim, if we were to overturn the decision to refuse relief, it is inevitable that the attempt to achieve a change in culture would receive a major setback.

In so doing, the Court sought to distinguish between trivial non-compliances which might entitle a party to relief, and others where the burden was on the defaulting party, and there had to be good reason for default. And being a bit busy and stretched did not fall into the “good reason” category. All litigators will need to have [40]-[41] of the judgment engraved on their hearts.

Comment

The CA could not have wished for a better case to make an example of defaulting lawyers. As it pointed out, lawyers have had plenty of warning recently of these changes. But one cannot help thinking that the case has been irremediably skewed by this decision. If The Sun has any plausible evidence that our MP said the fateful words, it can run it without the usual disciplines imposed by costs. It may recover half a million in costs if it wins, and loses what it would regard as small change if it loses.

So all very well to scare lawyers witless, but has justice really been done?

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