Rattan v UBS AG, London Branch

A party cannot manufacture a costs-budgeting default by advancing an artificial interpretation of correspondence which clearly agreed a filing date. Where the parties have agreed an equivalent costs-budgeting procedure under the Civil Procedure Rules 1998, the agreed procedure governs. A futile procedural point, particularly one increasing disproportionate costs and undermining co-operation between representatives, may justify an indemnity costs order.

The claimant brought proceedings concerning the alleged misselling of investments. At a case management conference, the claimant argued that the defendant had failed to file its costs budget within the period required by CPR 3.13. It was submitted that CPR 3.14 therefore deemed the defendant to have filed a budget limited to applicable court fees and required an application for relief from sanctions.

The defendant relied on correspondence in which the parties had agreed that costs budgets should be filed by 28 February 2014. The central issue was whether that agreement governed the timetable and whether the defendant was in default.

1. The procedural argument was rejected. The parties had clearly agreed that costs budgets should be filed by 28 February 2014. The defendant’s budget was therefore served in accordance with the agreed procedure and the sanction in CPR 3.14 did not apply.
2. The claimant’s construction of the correspondence was described as manifestly untenable. Even if relief from sanctions had been necessary, the defendant’s case for relief would have been overwhelming.
3. The court emphasised that the Commercial Court would firmly discourage futile and time-wasting procedural points. The judge referred to Summit Navigation Ltd v Generali Romania Asigurare Reasigurare SA, [2014] EWHC 398 (Comm), as reinforcing that message.
4. The point had increased the expense of the case management conference and damaged the relationship of co-operation and trust required for efficient litigation. In circumstances where the parties’ budgets were already disproportionate to the amount in dispute, the claimant was ordered to pay the defendant’s costs of the argument on the indemnity basis, summarily assessed at £4,500, payable within 14 days.
5. The judge also observed that the case was suitable for mediation.