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This post analyses the first instance judgment in Mitchell v News Group Newspapers. For an analysis of the Court of Appeal's judgment, click here.
Under the new Costs Management provisions found in Part 3 of the Civil Procedure Rules (and Practice Direction 3E thereto), parties to whom those provisions apply are now required to file and exchange costs budgets – and must do so at least seven days before the first Case Management Conference (if no date is specified in the notice served under CPR 26.3(1)). Once served, the Court must then have regard to those budgets when giving case management directions whether or not a Costs Management Order has been made.
But what happens when somebody falls foul of the mandatory provision? Cue Andrew Mitchell MP (or rather his solicitors – not that this now matters anywhere near as much as it used to under the present provisions for relief from sanctions).
Perhaps we’ll never know what Mr Mitchell did or didn’t say to the police officers on duty at Downing Street on 19 September 2012, but The Sun reported that Mr Mitchell had referred to them as “plebs”. On the back of this front page, Mr Mitchell brought a libel action against News Group Newspapers Ltd, the publisher of The Sun.
Although the action was commenced during the Pre-Jackson libel pilot, provisions similar to the abovementioned applied and both parties were required to file and serve costs budgets accordingly. And so when lawyers on behalf of Mr Mitchell failed to file a costs budget, the Court determined to exercise its new powers under CPR 3.13 by treating the offending party ‘as having filed a budget comprising only the applicable court fees.’ Distressing news for the Claimant given that his ‘applicable court fees’ would be in the region of £2,000 compared against the £500,000 that was spent on a similar, and successful, libel case.
Mr Mitchell’s lawyers made a swift Application for relief from sanctions under the new, stricter regime. After much argument between heavyweight Counsel regarding the reasons for the Claimant’s failure to submit a timely costs budget, Master McCloud refused the Claimant’s Application for relief and gave the following reason for so doing:
The explanations put forward by the claimant’s solicitors are not unusual ones. Pressure of work, a small firm, unexpected delays with counsel and so on. These things happen, and I have no doubt they happened here. However, even before the advent of the new rules, the failure of solicitors was generally not treated as in itself a good excuse and I am afraid that however much I sympathise with the claimant’s solicitors, such explanations carry even less weight in the post-Jackson environment.
What makes the decision all the more surprising is the fact that the Claimant’s solicitor received notice of the pending CMC only four days before the costs budget was due. Although conceding that this was a point which “troubled” her, the learned Judge nevertheless continued:
The parties were well aware that this was a case for which budgeting would be required from the start and that the mere fact that a date is set for a CMC is not supposed to be the starting gun for proper consideration of budgeting.
Rough justice, some might say. On the other hand, however, the Court – now more than ever – has to be mindful of the potential cost and proportionate use of Court resources. The question of whether the decision is proportionate (whatever that now means) is one that the appellate Court will surely address; and Mr Mitchell has been granted permission to appeal.
It is clear that the responsibility of active case management now rests not only with the Court, but with the parties also – and in a significant way. When it comes to matters of costs, the new provisions are strict and, where they apply to a relevant case, are apparently non-discretionary.
The message from the decision in Mitchell v NGN is clear: pro-active costs budgeting is necessary from the outset and procrastination could prove more costly than your average MP’s claim for expenses.
 CPR 3.12(1)
 CPR 3.13
 CPR 3.17. See CPR 3.15 and Practice Direction 3E 2.2 for more information on Costs Management Orders.
 Under the previous relief from sanctions provisions, the Court was required to consider ‘whether the failure to comply was caused by the party of his legal representative’ (CPR 3.9(1)(f)).