A Warning from the Commercial Court
In a case where a claim for alleged misselling became ‘a misguided piece of opportunism,’ John Hodgkinson, Solicitor & Costs Advocate, expands on why a Judge has issued a warning that the Commercial Court will ‘firmly discourage the taking of futile and time wasting procedural points’
Transferred from the Chancery Division to the Commercial Court, the Order for transfer provided ‘that the costs management provisions of CPR Part 3 “or equivalent agreed procedure” should apply.’
In absence of such ‘equivalent agreed procedure’ the strict provisions of CPR 3, would require the file and exchange of budgets 7 clear days before the CMC.
On a strict application of the CPR Part 3 provisions the Defendant’s budget was provided only 6 clear days prior to the CMC.
The Claimant had written setting out what seemed to be a reasonable interpretation of the transfer order, namely ‘that in the absence of any equivalent agreed procedure, the parties to these proceedings are obliged to file cost budgets by 28 February 2014.’
They sought confirmation that the Defendant would file their ‘costs budget on 28 February 2014, or alternatively provide your proposals as to any equivalent alternative procedure.’ The Defendant agreed that budgets should ‘be filed by 28 February 2014.’
The Claimant submitted ‘It is evident from the above exchange of correspondence that there was no attempt to agree any ‘equivalent alternative procedure.’ In essence it came down to one party asking for confirmation to file on the 28 February and the other saying it would be done by 28 February.
The Judge took a view against the Claimant without even calling on the Defendant’s Counsel to expand on his skeleton argument.
The Judge called the Claimant’s view ‘manifest nonsense,’ and said it was clear that there was an agreement. He described the Defendant’s solicitors’ understanding of the position as entirely reasonable. If relief from sanctions had been necessary, ‘the case for such relief would have been overwhelming.’
The Judge did not accept the Defendant’s description of the Claimant’s conduct as laying a cunning trap, calling it instead ‘a misguided piece of opportunism.’ He recognised however that the suspicion created was now a symptom of a damaged relationship of co-operation and trust. This was unfortunate when the costs were already disproportionate.
In the light of the disproportionate nature of the proposed costs the Judge expressed the view that this was ‘a case which cries out for mediation.’
The Claimant was ordered to pay the Defendant’s costs. Thus their ‘misguided piece of opportunism,’ proved a costly exercise.
The case is not a let off for parties who fail to provide budgets within 7 clear days’ notice as it had the unique element of the order itself allowing for an alternative agreement. It may give some consolation for relief from sanctions if an agreement is reached for a different time scale, and reneged on.
A common sense approach to the interpretation of the correspondence prevailed. However, the safest course of action is to comply with the costs management provisions, not rely on any apparent willingness by other parties to be flexible.
As ever, proportionality is to the forefront, so if considering taking a technical point like this, make sure the whole consequences are weighed up, including the impact on litigation of doing so.