Mott & Anor v Long & Anor [2017] EWHC 2130 (TCC) And Lakhani & Anor v Mahmud & Ors [2017] EWHC 1713 (ch)

When the Courts will grant relief from sanctions for late costs budgets

In Mott & Anor v Long & Anor [2017] EWHC 2130 (TCC), the defendants applied for permission to be able to rely on their costs budget, which was filed some 10 days late (an earlier costs budget was not filed due to IT problems, although the defendants' solicitors thought it had been filed). HHJ Grant held (applying the principles laid down in Denton v TH White Ltd [2014] EWCA Civ 906) that the delay here was serious or significant, in part because "lateness in serving a cost budget has the capacity to prejudice the very process of cooperation in the cost budgeting process which the rules are designed to achieve" (paragraph 21). Furthermore, although IT failures can amount to a good reason, the defendants had not established a good reason on the evidence, no witness statement from someone in the solicitors' IT department having been produced.

However, the judge was prepared to grant relief taking into account all the circumstances in the case. The costs budget had now been served (some nine days before the CMC) and, importantly, there was a significant difference between the figures in the costs budgets for the claimants and the defendants. That was because of a difference in approach between the parties, e.g. the claimants wanted to adduce expert evidence from two categories of expert, the defendants from only one. It was possible that the parties might not have been able to agree these matters and so would have had to make oral submissions at the CMC (with a revised costs budget likely to then be ordered): "In those circumstances, the process of cost budgeting would not have been completed today in any event... The fact that the parties are now in precisely the same procedural position in which they would have been so far as the process of cost budgeting is concerned, had the defendants served their cost budget in time, is a highly significant circumstance in the case, and one to which the court should have proper regard" (paragraph 35).

By contrast, in Lakhani & Anor v Mahmud & Ors [2017] EWHC 1713 (ch), it was found that a district judge did not err in refusing relief from sanctions where costs budget were filed a day late. The automatic consequence for the defendants filing a late cost budget under the rules is that they cannot recover any more than court costs if they win, unless relief from sanctions is permitted. The district judge refused to grant relief and so...