The full harshness of the post-Jackson costs management regime has been exposed after a High Court master ruled that a claimant’s failure to meet the rules in a high-profile libel action means his budget is limited to the court fees and no more.
Master McCloud last week refused relief from sanctions in the case brought by former Cabinet minister Andrew Mitchell MP against News Group Newspapers for The Sun’s coverage of the ‘Plebgate’ affair.
However, she granted leave to appeal of her own motion given the absence of authority on “precisely how strict the courts should be and in what circumstances” in the post-Jackson world.
Had the application been made before 1 April, “it would have been far more likely that… I would have granted relief on terms”, she said.
The case was begun under the pre-1 April defamation costs management pilot, and in June the master issued the sanction for two breaches of practice direction 51D: a failure to engage in discussion with the defendant as to budgets and budgetary assumptions, and a failure to file a budget seven days before the case management conference (CMC).
Mr Mitchell’s solicitor, Graham Atkins of Atkins Thomson, explained to the court the resourcing problems that had caused the breaches – with members of staff absent and the firm also working on the phone hacking litigation – but Master McCloud said they were not enough of an excuse.
“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,” she said. “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.”
Nonetheless, she said she was not bound to dismiss an application for relief merely due to the lack of a good excuse.
The master continued that there was no evidence of particular prejudice to Mr Mitchell arising from her order, adding: “Even if it did affect him financially and as to representation, there are many claimants who manage without lawyers and it could not be said that he would be denied access to a court more than is the case for others if they have to represent themselves.
“Article 6 rights are engaged but a proportionate sanction can be a legitimate interference with article 6 and in this instance Mr Mitchell is not driven from the court.
“Equally I think it is obvious that the sanction is something of a windfall for the defendants, but that is often the way with sanctions.”
Master McCloud highlighted the policy position expressed by the Master of the Rolls, Lord Dyson, in a speech shortly before the Jackson reforms came into force  about the need for judges to be stricter on non-compliance and to consider its wider impact on the system.
She said: “Cases are usually important to the parties but if such considerations weighed too heavily, one would be unable to implement the objectives of the new rules. One would be unable to prevent some claims from taking unfair amounts of judicial resources away from other claims at the very moment when it is common knowledge that budgetary constraints may lead to fewer judges in the courts, and to reduced non-judicial resources to operate those courts.
“Judicial time is thinly spread, and the emphasis must, if I understand the Jackson reforms correctly, be upon allocating a fair share of time to all as far as possible and requiring strict compliance with rules and orders even if that means that justice can be done in the majority of cases but not all.”
She noted that, while evidence of specific detriment to other litigants is not necessary, in this case she had had to vacate a half-day that had been allocated to deal with asbestos claims to list the application for relief.
The master went on to consider whether, in the circumstances, the claimant did not have enough time to produce his budget – four days, including a weekend, from being notified of the date of the CMC.
“But having considered this carefully, because it was a point which troubled me, the view I have taken is that 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.
“Budgeting is something which all solicitors by now ought to know is intended to be integral to the process from the start, and it ought not to be especially onerous to prepare a final budget for a CMC even at relatively short notice if proper planning has been done. The very fact that the defendants, using cost lawyers, were well able to deal with this in the time allotted highlights that there is no question of the time being plainly too short or unfairly so.”
Andy Ellis, managing director of Practico, the costs firm which was instructed by Simons Muirhead & Burton for the defendant, said: “This could be the first realisation of the warning given by the Court of Appeal in Henry – that things would be different, and a lot tougher, in the post-April world.
“It’s possibly easier to spare the rod when both sides have been slow to engage – but in this case the defendant had their tackle in order and the contrast was evident.”