In a resounding message to the legal profession that the Sir Rupert Jackson reforms are biting and that a casual approach to compliance with court directions will no longer be tolerated, the Court of Appeal has severely punished lawyers in a defamation case who failed to lodge a £500,000 costs budget on time.
The lawyers had been directed to file their budget by a Master of the Queen’s Bench Division by a particular date but missed the deadline by about six days. The lawyers pleaded pressure of work as an explanation for their default; however the delay had resulted in an enforced adjournment of a hearing before the Master.
Citing the tougher approach to compliance recommended by Sir Peter Jackson, the Master’s response was to reduce the lawyers’ costs budget from £504,000 to the applicable court fees alone. The Master subsequently refused to change her mind, saying that there was ‘really no adequate excuse’ for the breach.
In dismissing the lawyers’ appeal against the Master’s order, the Court found that the robust implementation of the Jackson report signalled the end of the traditionally forgiving attitude of many judges to failure to comply with court orders and directions. The change in the legal landscape had long been heralded and the legal profession ‘should have been in no doubt as to what was coming’, the Court noted.
The lawyers argued that the Master’s order was disproportionate and contrary to the overriding objective that justice should be done. However, the Court noted that such defaults undermined the Court’s case management powers and had the potential to seriously prejudice other litigants.
Changes in the procedure rules prompted by the Jackson report had the benefit of laying down ‘stark and simple’ sanctions for default and the overriding objective was thus ultimately served. The Court acknowledged that the outcome in the present case ‘seems harsh’ but found that the sanction imposed was consistent with the ‘change in culture’ envisaged in the Jackson report.
The Court concluded, “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 the 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.”