The Master of the Rolls has delivered a unanimous judgment limiting Andrew Mitchell MP’s legal costs in his defamation action against “The Sun” newspaper to his court fees only despite his budget being in excess of £500,000. This is the first time the Court of Appeal has considered sanctions under the new Jackson costs regime and is a sobering lesson for litigators.
By way of background, Mitchell’s solicitors filed their cost budget late. Whilst they ought to have filed it not less than seven days before the hearing for which the costs budget were required, they did so less than 24 hours beforehand, having ignored prompting from the Defendant’s solicitors and only done so upon a reminder from the court. At the hearing, Master McCloud found that there were “really no adequate excuses for the breach”; pressures of litigation and being a small firm not being good excuses, legal professionals had had ample warning about the new regime for many months, and that they knew that the courts would adopt a strict approach to non-compliance. As a result, she ordered that Mitchell’s budget be limited to court fees only.
Mitchell then applied for relief from the sanction. Master McCloud rejected that application in an “impressive judgment”, noting that (at 11-18):
Upon appeal, the Court of Appeal found that the Master was entitled to apply CPR 3.14 by analogy and, of some note, endorsed “the tougher, more robust approach to rule-compliance and relief from sanctions…to ensure that justice can be done in the majority of cases”.
The Court then gave guidance on relief from sanction (at 40-48):
The final paragraph from the Court of Appeal – “we hope that our decision will send out a clear message”. We have been warned.