If you think we're out of the woods today - you're in for a big surprise!

The Court of Appeal has just handed out a salutary reminder to anyone who thought that the horrors of Mitchell were a thing of the past.

The very mention of the name Mitchell can strike fear into the heart of most litigators. This was the decision that saw actions being struck out for the most minor breaches of directions orders. The nightmare lasted for several months until we had the more sensible approach in Denton v TH White which was designed to calm things down a bit. It is fair to say that, overall, this has been achieved  –

http://thestevecornforthblog.blogspot.co.uk/2014/07/mitchell-heading-back-to-planet-earth.html

The good news continued with the decision in The Police v Abdulle where the conduct of lawyers was criticised to the point where the judge doubted that they understood ‘the rudimentary requirements of being a litigation solicitor’. The solicitors were guilty of breaching a whole series of court orders but were let off the hook because the failings of the lawyers had not actually prevented the timing of a trial. I did express surprise, at the time, and warned that this did not necessarily mean that we could safely revert to the old days when procedural breaches were broadly tolerated –

http://thestevecornforthblog.blogspot.co.uk/2015/12/mitchell-2-years-on-back-to-reality.html

I warned that there could be no room for complacency. 

This has been borne out with a vengeance in the alarming case of Jamadar v Bradford Teaching Hospitals –

http://www.litigationfutures.com/news/failure-serve-costs-budget-limits-claimants-recovery-court-fees-3m-quantum-dispute

What started all of this off was the failure of Andrew Mitchell’s lawyers to serve a costs budget in time during his libel claim against the S*n. Under the Civil Practice Rules the consequence of such a breach is that the lawyer’s fees are limited to court fees only. So in effect the lawyers do not get paid for their hard work, and they also have to cover all other expenses. The Jamadar case involved allegations of Clinical Negligence and the value of the claim was about £3m. Liability was denied. The case was allocated to the multi track meaning that costs budgets were required. The NHS then admitted liability and judgment was entered for the claimant. The claimant’s solicitors decided that they did not need to file a budget. The Defendants lodged their budget and reminders were sent to the claimant's lawyers.

The matter proceeded to a Case Management Conference at which the solicitors costs were capped at court fees only. The judge also allowed 5 experts for each side and allowed for a 5 day trial to assess damages.  So the catastrophic outcome for the solicitors is that they are effectively funding the case to trial - for nothing! This would put many firms out of business. The decision has been upheld this week by the Court of Appeal with a judgment from Jackson LJ himself.

So the lesson is clear. We are not out of the woods, certainly as far as budgeting goes. You have to wonder what possessed the claimant’s solicitors to decide that no budget was required. But on the other hand it seems that this was a mistake on their part rather than a simple failure to comply. But the outcome is the same.

And the message is clear.

Any lawyer dealing with multi track cases must read and understand the rules on costs budgets. Read and digest this message from Gordon Exall –

https://civillitigationbrief.wordpress.com/2016/07/26/failing-to-file-a-cost-budget-and-refusal-to-grant-relief-from-sanctions-a-harsh-lesson/

One failure to comply could turn a high earning case into the end of the world as we know it..