It’s Good to Talk – A review of Mitchell v News Group Newspapers Limited [2013]

Ask someone what they think of the Andrew Mitchell case and the response will most likely alight upon the widely reported salacious details. Perhaps only Nigella Lawson could contend for the public’s court case of 2013 award.

Very few of us would deny having been fascinated, even entertained, by reports of the alleged incident itself, and the subsequent accusations and counter-accusations. What is of historic interest for us is that Atkins Thomson, the law firm acting on the Tory MP’s behalf,  failed to have the £0.5 million budget for the claimant approved and suffered the force of the mandatory sanctions under CPR 3.14.

The reasons for this outcome are neither exotic nor bafflingly technical.  Simply, Mitchell’s lawyers failed to talk with their opponent and failed to submit their budget on time.

The CPR PD51D Defamation Proceedings Costs Management scheme applied to the case, and this pilot was in force until 31 March 2013.

The case management and costs hearing in this case was listed 18th June 2013. The defendant (Sun Newspaper Group) used outside costs lawyers and filed their budget on time. The claimant solicitor prepared their costs budget in house. At 12.14 pm on 17 June Master Mc Cloud sent an email to the parties’ solicitors noting that there was no budget from the claimant on the court file and asking if the budgets were agreed. The defendant solicitor replied at 12.27 pm the same day “….despite a number of written promptings from me to exchange costs budgets the Claimant’s solicitors have not replied or provided us with a copy of their costs budget.”

The claimant solicitors in fact filed their budget later on the afternoon of the 17th  after sending an email to Master McCloud stating that their budget had been delayed as they were waiting for figures from counsel. The parties attended before the Master on the 18th. The claimant’s barrister submitted that the reason the budget was filed late was “ do with pressure of litigation elsewhere in the firm on another case..”. The Master held that the claimant had failed to comply with practice direction 51D on two grounds in that they had failed to file the budget in time and had failed to discuss the budgets with the defendant.  Master McCloud referred to the new costs budgeting rules under CPR 3.14, which she noted were identical except that the new rules provided for a mandatory sanction that where a party fails to file a costs budget within 7 days prior to the date of the first hearing, the party is deemed to have filed a budget limited to court fees. The Master applied those sanctions.

Accordingly she made an order that:

  1. The claimant shall be treated as having filed a budget comprising only the applicable fees.
  2. The claimant shall be entitled to apply for relief from sanctions, the hearing of the application to be heard alongside the adjourned case and costs management hearing.

On the 25th July the Master heard the claimant’s application for relief from sanctions. McCloud denied relief in her detailed judgment which made reference to Jacksons implementation lectures. Further she granted leave to appeal recognising the wider importance of her decision in the absence of any authority as to how strictly the Jackson reforms were to be applied.  On appeal, McCloud’s judgment was upheld.

The talking was too late, the budgeting was too late, and it cost the Claimant his budget of just over £500,000. The decision has sent a stern message to the legal community that we must engage with the new rules. However,  many of the articles on this case do not emphasise that importantly there were two failures.

Only the most exceptional circumstances might gain relief from sanctions. On appeal, Lord Dyson said with reference to relief from sanctions, “In short, good reasons are likely to arise from circumstances outside the control of the party in default”. Many solicitors will already have implemented safe systems to make sure budgets are filed in time, but remember to discuss your budgets too.  It’s good to talk.