A recent judgment reminds us – if reminder was needed – of the critical importance of filing a costs budget on time and to comply with directions.

Heathfield International LLC v Axiom Stone London Ltd & Medicall Ltd [2020] EWHC 1075 (Ch) –

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The case involved an action against solicitors for unpaid medical fees in the sum of £260k. There was a separate dispute concerning who was the relevant contracting party. The case was listed for a CCMC on 10/12/2019 and there was a direction for costs budgets to be filed – “by the date specified in CPR 3.13” which in this case was – “not later than 21 days before the first case management conference” i.e. 18/11/2019. D2 failed to file its budget by this date and did not apply for an extension. On the face of it, this triggered CPR 3.14 i.e that they would be treated as having filed a budget limited to court fees only.

An issue arose in relation to security for costs and the CCMC was adjourned to 30/04/2020. This meant a second deadline for budgets for 08/04/2020. D2 filed and served their budget on 14th April 2020, 6 days late. Further issues arose in relation to the timing of D2’s service of evidence in connection with the security for costs application. On 28/02/2020, D2 made an application for relief from sanctions. The other parties responded with a reference to a number of incidents including the double budget breach – November and April, delay in relation to the security for costs application and failure to engage in any discussions about the costs.

HHJ Simon Barker found the breach to be serious, both on its own and in the context of general lack of engagement by D2. He found that – “D2’s conduct over the course of this litigation is revealing and demonstrates inefficient conduct of the litigation and ignorance of procedural requirements as well as disregard for the rules, practice directions and orders”.

It was necessary to consider all the circumstances. The delays had impacted the parties, the court and other court users.

“In my view D2’s conduct shows a persistent failure to engage with the obligation to provide a costs budget and a total failure to engage in discussion of or commentary on opposing parties’ budgets. Even in relation to the lateness by several days before the 30.4.20 CCMC D2 failed or refused recognise the seriousness of the failure. Even now there is no Precedent R report prepared by D2. On top of all of that there is a catalogue of other procedural and deadline failures and an apparent lack of comprehension of the overriding objective and responsibilities as a litigant.

The result is, as provided for by CPR 3.14, that D2 is to be treated as having filed a budget comprising only the applicable court fees.”

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