Lord Dyson sends 'clear message' by dismissing Mitchell costs appeal

The Master of the Rolls has sent out what he described as a "clear message" to lawyers by dismissing an appeal against Master McCloud's costs ruling in the Andrew Mitchell libel case.

Master McCloud ruled in June that Mitchell's solicitors, Atkins Thomson, should only be able to recover 'applicable court fees' having failed to file its costs budget, of just over £500,000, on time.

Delivering judgment on behalf of the Court of Appeal in Mitchell v NGN [2013] EWCA Civ 1526 this morning, Lord Dyson said the master did not misdirect herself "in any material way or reach a conclusion which was not open to her".

He went on: "We acknowledge that it was a robust decision. She was, however, right to focus on the essential elements of the post-Jackson regime. The defaults by the claimant's solicitors were not minor or trivial and there was no good excuse for them.

"They resulted in an abortive costs budgeting hearing and an adjournment which had serious consequences for other litigants.

"Although it seems harsh in the individual case of Mr Mitchell's claim, if we were to overturn the decision to refuse relief, it is inevitable that the attempt to achieve a change in culture would receive a major setback.

"In the result, we hope that our decision will send out a clear message. If it does, we are confident that, in time, legal representatives will become more efficient and will routinely comply with rules, practice directions and orders.

"If this happens, then we would expect that satellite litigation of this kind, which is so expensive and damaging to the civil justice system, will become a thing of the past."

Lord Dyson said the law firm told the master of the 'difficulties' it was facing when it applied for relief from sanctions.

"They were a small firm; two of their trainee solicitors were on maternity leave; the senior associate who was used to dealing with costs budgeting had recently left the firm; and the firm was engaged on work on other heavy litigation."

The claimants also argued that the defendants had suffered no prejudice and, if relief was refused, they would benefit from a "windfall".

Lord Dyson said arguments relating to pressure or work carried "even less weight" in the post-Jackson world. He said that the failure to supply a costs budget led the master to hold an adjourned hearing at a time originally allocated to a hearing claims involving asbestos-related diseases.

Lord Dyson said the court would usually grant relief if there has been "no more than an insignificant failure" to comply with an order, for example, "where there has been a failure of form rather than substance, or where the party has narrowly missed the deadline imposed by the order, but has otherwise fully complied with its terms".

He went on: "If the non-compliance cannot be characterised as trivial, then the burden is on the defaulting party to persuade the court to grant relief. The court will want to consider why the default occurred.

"If there is a good reason for it, the court will be likely to decide that relief should be granted. For example, if the reason why a document was not filed with the court was that the party or his solicitor suffered from a debilitating illness or was involved in an accident, then, depending on the circumstances, that may constitute a good reason."

Lord Dyson said "mere overlooking a deadline, whether on account of overwork or otherwise" was unlikely to be a good reason.

"We understand that solicitors may be under pressure and have too much work. It may be that this is what occurred in the present case. But that will rarely be a good reason.

"Solicitors cannot take on too much work and expect to be able to persuade a court that this is a good reason for their failure to meet deadlines. They should either delegate the work to others in their firm or, if they are unable to do this, they should not take on the work at all.

"This may seem harsh especially at a time when some solicitors are facing serious financial pressures. But the need to comply with rules, practice directions and court orders is essential if litigation is to be conducted in an efficient manner.

"If departures are tolerated, then the relaxed approach to civil litigation which the Jackson reforms were intended to change will continue."

Lord justices Richards and Elias contributed to the judgment.