Mott & Anor v Long & Anor

Relief from sanctions for late service of a costs budget requires application of the three-stage Denton v TH White Ltd approach. A ten-day delay is capable of being serious or significant in the context of costs budgeting, even where the budget is eventually served before the case management conference. The court must assess the breach in its particular context, including the time available for cooperative discussion and the risk that late service disrupts that process. At the third stage, all the circumstances remain relevant. Relief may be granted where the parties would in any event need to revise and discuss their budgets after substantive case-management decisions, but it may be conditional on payment of the other party’s costs.

The defendants applied for relief from sanctions after their costs budget was filed and served approximately ten days late. The first budget was incomplete and contained material inaccuracies; a corrected budget was served shortly before the case management conference. The claimants argued that late service had substantially restricted the time available for discussion, particularly because the parties differed on expert evidence and trial length.

The court considered the seriousness and significance of the breach, the reason for it, and all the circumstances under CPR rule 3.9.

1. First stage. The court applied the guidance in Denton v TH White Ltd and held that a ten-day delay was serious or significant. The assessment is contextual. In costs-budgeting cases, lateness can prejudice the cooperative process which the rules are intended to promote. The fact that the budget could still be considered did not make that consideration determinative.
2. Second stage. The defendants had not established a good reason. The evidence suggested that the drafted budget had not been saved or properly printed, but it did not establish whether the problem was human error or an IT failure. The unexplained IT difficulties therefore did not amount to a proved good reason.
3. Third stage and outcome. The court considered the late service, the limited time for discussion, the defendants’ other procedural defaults and the substantial differences between the parties’ positions. However, the cost-budgeting process would in any event have required a revised budget after the court determined issues concerning expert evidence and trial length. The parties were therefore, in substance, in the same procedural position as they would have been if the budget had been served on time. That was a highly significant circumstance.
4. Relief from sanctions was granted. The defendants were ordered to pay the claimants’ costs of and occasioned by the application.

First-instance application. No earlier or later appellate decision is stated in the judgment.