Relief From Sanctions Application Where Costs Budget Was Late

In the recent case of Heathfield International LLC v Axiom Stone [2020] EWHC 1075 (Ch) the Court refused to grant relief from sanctions where a party had failed to file a costs budget in time.

The Court took the view that the party only had itself or its legal representative to blame.

Heathfield International LLC v Axiom Stone

Background

The deadline for filing costs budgets was in November 2019. The Second Defendant had instructed a solicitor, notwithstanding this all parties except the Second Defendant filed their budgets on time.

The Case Management Conference was adjourned and the deadline for filing budgets was pushed back to 7th April 2020. The Second Defendant once again failed to file their cost budget on time. The effect of failing to file a costs budget on time is that the party failing to comply’s costs will be limited to the Court issue fee alone.

The Second Defendant applied for relief from this sanction.

What did the Court decide?

HHJ Simon Barker QC refused to grant relief. He agreed that the default was serious. He also noted that the Second Defendant had a:

“history of tardiness in this litigation.”

The Second Defendant knew that a budget was required but failed to file on time and instead filed nine days late.

When coming to his decision HHJ Simon Barker QC considered the possibility of imposing a partial sanction rather than denying all costs in line with the CPR. He observed that there is an element of discretion open to the Courts when deciding what relief or penalty should be imposed. It is not as black and white as simply granting relief or imposing a full penalty.

However, in the case at hand the ‘outstandingly bad’ conduct and attitude of the Second Defendant justified upholding the penalty in full. This meant if the Second Defendant was successful at trial they would only be able to recover the Court issue fee.

Comment

This case demonstrates another instance in which the Courts have refused to grant relief from sanctions where a party has not filed a costs budget in time. This case does however explore the possibility that the Courts may order a partial penalty rather than the full penalty identified within the CPR.

It is however incredibly important to file your cost budget on time to ensure that if you are successful at trial you have an opportunity to recover your client’s costs.