Relief from Sanctions for failing to file the Cost Budget on time…
In the matter of INTELLIMEDIA SYSTEMS LTD v RICHARDS & ORS (2017) Chancery Division Judge Warren granted the Claimant relief from sanctions for a company’s failure to file its costs budget on time. It was deemed that although the delay had disrupted the parties’ case management conference, imposing a sanction would be disproportionate.
Following the commencement of proceedings the CMC had been listed with directions including the filing of the parties’ cost budgets. The defendants filed their costs budget within the timescale set. However, the claimant solicitor was ill and duly informed the defendants by email of the same and in particular the cost budget would be filed shortly. The cost budget was filed but beyond the time limit set by CPR r.3.14. As a result the defendants’ suggested the claimant apply for relief from sanction of the late filing. As a consequence of the late filing the budget discussion reports were due to be exchanged and the defendant did not feel the claimant was taking responsibility for the proceedings in this matter.
The claimant company applied for relief from sanctions . The defendants requested for the case management conference to be adjourned and for the claimants application for relief of sanctions to be heard.
The defendants position was set out and relied upon the three-stage test for relief from sanction in Denton v TH White Ltd  EWCA Civ 906, under stage one this was not a trivial breach. Under stage two the illness of the conducting solicitor was not a reason for the late filing of the claimant’s costs budget. Under stage three, the defendant argued the claimant had not acted with the overriding objective in hand that litigation should be conducted efficiently, at a proportionate cost and to comply with the rules. The claimant argued the defendants had shown a lack of cooperation in dealing with the costs budgeting throughout between the parties.
HELD: The claimant acted in a timely fashion in applying for the relief on the day when they were made aware of the breach. The claimant’s criticism that the defendants had been uncooperative in negotiating a resolution was rejected.
Considering the first stage of the Denton test, the breach was not trivial. It had risked disrupting the case management conference and the conduct of the litigation and caused additional work for the defendants. Considering the second stage, although one could be sympathetic that the solicitor responsibly fell ill, it would have been reasonable for the preparing of the cost budget to be delegated. When considering the third stage, under r.3.9 the consequences of the claimant’s non-compliance; whether the late costs budget caused the loss of the case management conference. Had the application not been made the conference could have gone ahead as scheduled and the timetable and disclosures set.
In consideration of all the circumstances Chancery Division Judge Warren granted the claimant relief from sanctions, but as a result of not managing the proceedings as would have been expected, was ordered to pay the costs of the hearing on an indemnity basis.