Judge overturns Mitchell sanction in case where both parties did not file budgets

Costs: both sides did not break budgeting rules

A circuit judge has overturned a ruling that both the claimant and defendant would be limited to recovering their court fees after both failed to submit budgets.

HHJ Worster, sitting in Birmingham, said the failure of a form N149C – a notice of proposed allocation to the multi-track, issued under rule 26.3 – to specify the exchange of budgets meant that the budgeting requirements in the CPR were not triggered.

The judge said there appeared to be more than one version of form N149C in circulation, one providing for a budget to be filed by a specific date and one – as in this case – that did not.

“That is most undesirable, particularly at a time when the profession and the courts are working out the effects of these new rules,” he said.

Porbanderwalla v Daybridge Ltd was an accident claim where liability and quantum remained disputed. It was quantified at around £42,000, mainly credit hire charges.

The form N149C made no reference to a budget and when the parties submitted their direction questionnaires as required, neither included a Precedent H, although the questionnaire said: “If your claim is likely to be allocated to the multi-track, form Precednet H must be filed in accordance with CPR 3.13.”

In their covering letter, the claimant’s solicitors said: “We are not enclosing Precedent H with this letter. It will be filed as/when directed by the court in advance of the case/costs management hearing.”

A district judge then made the order to limit their recoverable costs to the court fees because neither party had filed Precedent H.

HHJ Worster was persuaded to overturn this order through the construction of rules 3.13 and 26.3. He decided that absent a specific requirement for the exchange and filing of a budget in the rule 26.3(1) notice or a case management conference, the budgeting requirement “is not triggered”.

He added that even had he refused the appeal, he would have been minded to grant both parties relief from sanction.

“Each case will turn on its particular facts, but this was not a case where the parties were refusing to engage with the requirements for cost budgeting. Their approach to the requirements of the rule were understandable, they had otherwise complied with all the orders and directions of the court, the claimant had indicated that it would file a budget as and when directed to… and the appeal was brought promptly.

“The default would not have been a trivial one, but there was a good reason for it.”


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