New costs management litigation budget rules claim Plebgate victim

The former Overseas Development Secretary Andrew Mitchell is the latest victim of the strictly-applied new costs management rules. The solicitors acting for him in his libel case against NGN failed to file a budget as required by the Rules, and Master McCloud has declined to relieve Mitchell of the sanction provided by the rules. You will find helpful articles on this, one on the Litigation Futures website called Tough enough? Failure to comply leaves “Plebgate” MP with budget limited to court fees, and in The Lawyer, where the headline is High Court caps ‘plebgate’ libel budget to court fees for Andrew Mitchell MP.

Let’s deconstruct this a little, particularly for the benefit of those who are interested in the budgeting developments in the Civil Procedure Rules but not necessarily familiar with the context, whether the news context or that of the Rules. The budget story would not have seen daylight if the particpants were not well known and linked by a news story of public interest.

The origin of the libel claim

Ever since Watergate, the press has routinely added the extension “-gate” to any kind of scandal. “Plebgate” differs from most in that it does actually involve a gate. The press loved it when ambitious Cabinet Minister Andrew Mitchell was reported as having addressed Downing Street security police as “plebs” when they made him wheel his bicycle through a side gate instead of opening the main Downing Street gates as (it was said) he deemed to be his right.

There was something for everybody in this story: for many, it seemed to prove that Cameron’s Conservative government was made up of unpleasant toffs who despised anyone who had not attended a private school; for others, it was another example of officious little jerks in hi-viz jackets using their petty power to inconvenience the public they are supposed to serve. Mitchell clung on for a few days, cautiously supported by the Prime Minister, but was eventually forced to accept the inevitable and resign.

It was only after this that holes started to appear in the story. The CCTV evidence did not support what the police said (why did no-one ask for it immediately?), and it gradually became clear that there had been a concerted plot to “get” Mitchell by inventing the story; arrests were made, the police had egg all over their faces, and an expensive police-on-police inquiry was launched. Mitchell began libel proceedings against the publishers of the Sun newspaper which had swallowed and repeated the police story whole. It is those libel proceedings which are the subject of the costs story.

The cost management rules

Among the changes brought in by the Jackson reforms on 1 April was a set of new provisions relating to costs budgets.  CPR Rule 3, originally headed Case Management, was renamed Case and Costs Management (or should have been – the MoJ has overlooked this in the web version of Rule 3).

Libel proceedings were the subject of a costs management pilot before April, and they are not among the arcane exemptions which take some cases out of the cost management regime (I wrote about that in recently an article called Battle over costs budgeting for high-value commercial cases). Accordingly, the rules as to filing and exchanging budgets apply. Rule 3.13 reads:

Filing and exchanging budgets

3.13 Unless the court otherwise orders, all parties except litigants in person must file and exchange budgets as required by the rules or as the court otherwise directs. Each party must do so by the date specified in the notice served under rule 26.3(1) or, if no such date is specified, seven days before the first case management conference.

Much has been made of the new severity in the rules, taking the form of tighter restrictions on the circumstances in which parties will be relieved of sanctions which would otherwise apply for breach of a rule, order or practice direction. In most cases, the appropriate sanction lies within the discretion of the court, whose approach to releiving a party from sanction is governed by a short, crisp new Rule 3.9:

On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need –

(a) for litigation to be conducted efficiently and at proportionate cost; and

(b) to enforce compliance with rules, practice directions and orders.

In the case of failure to file a budget, the rules actually specify the consequence, in Rule 3.14, which reads as follows:

Failure to file a budget

3.14 Unless the court otherwise orders, any party which fails to file a budget despite being required to do so will be treated as having filed a budget comprising only the applicable court fees.

This is where Andrew Mitchell’s solicitors have come unstuck, having failed to file and exchange a budget by the relevant date. There are all sorts of worthy dog-ate-my-homework excuses, but Master McCloud found that there was no particular prejudice to Mitchell – that is, however disadvantageous it may be to him, there was nothing which took this case out of the circumstances envisaged in the rule. I leave you to read the two articles referred to above for the detail, drawing attention to one particular point from each.

The Legal Futures article refers to a speech made by the Master of the Rolls when the rules came out, and links to its own article on the subject written at the time. I similarly referred to that speech in my own recent post Allowance for human error in approach to relief from sanctions under CPR Rule 3.9 saying:

The Master of the Rolls makes it clear that some apparent injustice in some cases is a price to be paid for improving the conduct of the litigation for the benefit of all cases.

That is emphasised by a passage from the judgment which is quoted in The Lawyer article which reads:

“The court must now, as part of dealing with cases justly, ensure that cases are deal with at proportionate cost and so as to ensure compliance with rules, orders and practice directions….In that sense what we now mean by ‘dealing with cases justly’ has changed, or if it has not changed then at the very least there is a significant shift of emphasis towards treating the wider effectiveness of court management and resources as a part of justice itself.”

Be aware that “the dog ate my homework” cuts no ice in this tough new regime.

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2 Responses to New costs management litigation budget rules claim Plebgate victim

  1. The original reports were very unclear but while the sanction is within the rule (if you assume that the rule does the requiring and the requiring can’t be at the CMC when its absence is noted) it cannot be in the intrests of justice for a claimant to have to abandon a claim because the winning of it without costs would by pyrrhic. Perhaps you say there should be no claims brought that the winning off is driven by costs recovery. In any event its also been reported that the court fee valued the claim at only £150k which is a fraction of the costs. Feeling very grateful that IP is arcane tooday

  2. Chris Dale says:

    Thanks for the comment. I was not really expressing a view as to whether the rule is a sensible one or whether the Master was correct to find as she did. The rule says what it says and the Master of the Rolls has made the policy clear.

    There is nothing easy about this aspect of a case. The fact is, however, that the rules specify a deadline and the deadline was not met. From the reports which we have, it seems clear that the Master expressed herself carefully in saying that are she found nothing to take this case out of the circumstances provided for in the rule. We do not know (a point the Master made as well) where the actual burden will fall in this case.

    So, as to your sentence beginning “Perhaps you say there should be no claims brought…”, I say nothing of the kind. I simply point to a rule, to a policy expressed clearly by the Master of the Rolls, and to a judgment which, from what we know of it, and however harsh in effect, is hard to describe as wrong.

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