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Is there Sense in Common Sense? Manchester Shipping Ltd v (1) Balfour Shipping Ltd, (2) Nikolay Nikolayevich Sochin [2020] EWHC 164 (Comm) - Daniel Tresigne, Advocate, DWF Advocacy Ltd

20/02/20. This ruling arose from an application for relief from sanctions for a failure to file and serve a costs budget on time. Both Defendants (represented by the same Solicitors) served their costs budget some 13 days late, and 8 days before the first Costs and Case Management Conference.

The issue of late service was raised by correspondence prior to the hearing. The Claimant submitted at the hearing that it was incumbent upon a party seeking relief to make a prompt application for relief from sanctions pursuant to CPR 3.9. The Defendant sought to apply, in effect, in the face of the Court for relief from sanction (albeit the decision was handed down some three weeks after the event).

Issues and Judgment

The application for relief from sanctions was granted by Lionel Persey QC (sitting as a Deputy High Court Judge), and the Court was content that it could consider the application in the face of the Court.

Dealing with the first topic as to whether this application could be heard, the Judge had regard to the saving provision within CPR 3.14, which provides as follows (emphasis added):

"… Unless the court orders otherwise, any party which fails to file a budget despite being required to do so will be treated as having filed a budget comprising only the applicable court fees…"

The Judge also had regard to the commentary to CPR 3.14, at 3.14.2, which states:

"… A party in default of r.3.14 need not make a separate application for relief from sanctions under r.3.9. Instead it may seek to invoke the saving provision in r.3.14 itself ("Unless the Court otherwise orders") by seeking to persuade the court to adopt that course at the hearing convened for costs management purposes…"

The Judge determined that this application could be heard in the face of the Court, stating that not every default of CPR 3.14 would require a formal application to be supported by evidence.

Turning to the substantive application for relief from sanctions, the Judge considered the test at CPR 3.9, as well as the guidance in Denton v TH White Ltd [2014] 1 WLR 3926.

In considering the seriousness and significance of the breach the Judge determined that, although the failure to submit a costs budget in time was serious, was of limited significance. In reaching this determination, the Judge had regard to the fact that all parties were able to fully prepare for the Costs Management hearing, including the preparation of Precedent R's...

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