A Sigh of Relief

For an area of law renowned for the amount and diversity of case law since the introduction of the CPR (and perhaps more particularly following the introduction of recoverable success fees in 2000) the world of costs has in recent times become fixated on just one topic – Mitchell. Rarely can the impact of a change in the rules been more profoundly felt as a consequence of just one case.

The Master of the Rolls has recently said he is unrepentant as to this exposition of the application of the rules, but he has expressed concern at the manner in which the principle is being applied by some District Judges. Practitioners should therefore be comforted by the recent case of Bank of Ireland & Anor v Philip Pank Partnership [2014] EWHC 284 (TCC).

Perhaps ironically, this is a case in which relief from sanctions was not given – because the Judge felt that there had not been a material breach which required such relief. The Solicitors in that case had been caught out by using the template Precedent H from the HMCS website and had simply signed the Costs Budget without adding anything further where the precedent says “[Statement of Truth]”. They had not added the text of the required statement of truth, although they filed an amended Budget later which did comply. Mr Justice Stuart-Smith firmly dismissed the Defendant’s objections to the application for relief from sanctions, saying “there is nothing in the rules or practice directions which require any and every failure to comply with the formal requirements for budgets as rendering the budget a nullity”. He therefore found there was no need for relief from sanctions, but clarified that if there were, he would most certainly have granted it.

This surely represents an outbreak of common sense. Our impression has been that District Judges are keen to apply such common sense, but undoubtedly they feel pressure from the higher courts to apply a firm hand.

To the surprise of many, Mitchell was not appealed, but there is an expectation that the Court of Appeal will inevitably become involved in the issue again soon. The position is reminiscent of the application of proportionality following the introduction of the test in the CPR in 1999. A workable solution had to wait until the case of Lownds in 2002. No doubt practitioners will continue to take great care