England and Wales High Court (Technology and Construction Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		13/06/2014

Mr Justice Stuart-Smith:

1. This action arises from the supply by the Defendant to the Claimant of 1000 kgs of chemical which was not the chemical that the Claimant had ordered. The Third Party is the haulier who made the delivery. The facts of the underlying dispute are unremarkable and are not relevant to the present issue.
2. The first CMC was listed for 6 June 2014. As a result, the parties came under an obligation to file costs budgets in the form of Precedent H by 29 May 2013. The Defendant served and filed its Precedent H a few minutes late. The delay was trivial and nothing further need be said about it. However, a further issue has been raised by the Third Party, which arises out of the fact that the Defendant's Precedent H, while compliant in every other respect, was signed by a Mr Russell Crossland, who described himself on the form as "Costs Draftsman".
3. The rules and practice directions relating to the service of Costs Budgets should now be well known to everyone who holds themselves out as being competent to conduct litigation in the Courts of England and Wales. CPR 3.13 and 3.14 provide:

"3.13 Unless the court otherwise orders, all parties except litigants in person must file and exchange budgets as required by the rules or as the court otherwise directs. Each party must do so by the date specified in the notice served under rule 26.3(1) or, if no such date is specified, seven days before the first case management conference.

3.14 Unless the court otherwise orders, 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."

4. PD3E deals with the required format in the following terms:

"Budget format

Unless the court otherwise orders, a budget must be in the form of Precedent H annexed to this Practice Direction……A budget must be dated and verified by a statement of truth signed by a senior legal representative of the party……
(The wording for a statement of truth verifying a budget is set out in Practice Direction 22.)"

5. The Third Party submits that Mr Crossland is not a "senior legal representative" of the Defendant and that therefore the effect of the Precedent H being signed by him is that it is a nullity. The consequence of that would be that, unless the Court otherwise orders, the Defendant is to be treated as having filed a budget comprising only the applicable court fees.
6. At the hearing, I rejected the Third Party's submission that the Defendant's Precedent H was a nullity. This judgment sets out my reasons for doing so.
7. The first question is whether Mr Crossland is a "senior legal representative" within the meaning of PD3E. He submitted a witness statement in which he said:

"I confirm that I am a Manager and Senior Costs Draftsman within the internal Costs Litigation team at Shakespeares Solicitors whose application for Associate at Shakespeares Solicitors has recently been endorsed by the partner in charge of the Costs Litigation Team."

8. Mr Crossland does not say that he is a solicitor and the circumstantial evidence suggests that he is not. He is included in the Defendant's Precedent H as one of three "fee earners" whose time costs are listed; but while the other two are referred to as "Grade C" and "Grade D" respectively (being usual shorthand for references to Solicitors, legal executives and paralegals in this context), he is only referred to as "Costs Draftsman" and is charged at a lower rate (£75 per hour) than the Grade D solicitor (£90 per hour). Whether or not he is a lawyer in profession, it is apparent from the Defendant's Precedent H (and was confirmed by Counsel at the hearing) that he has had no involvement in the case other than the preparation of the Defendant's costs budget for the CMC that is now in issue.
9. PD3E states that it supplements Section II of CPR Part 3. There is no definition of "senior legal representative" in the Practice Direction or in the CPR and neither Counsel nor I have been able to find any authority on the point. CPR 2.3(1) does, however, provide a definition of "legal representative" in the following terms:

"In these Rules … "legal representative" means a (a) barrister; (b) solicitor; (c) solicitor's employee; (d) … (e) person who, for the purposes of the Legal Services Act 2007, is an authorised person in relation to an activity which constitutes the conduct of litigation (within the meaning of that Act), who has been instructed to act for a party in relation to proceedings"

10. The procedure for making the Civil Procedure Rules is different from that for making Practice Directions: see ss. 1-3 and 5 of the Civil Procedure Act 1997. I am not aware of any definition within the Rules that formally includes Practice Directions within the meaning of "Rules" in CPR 2.3(1) or elsewhere. However, where (as is the case with PD3E) the Practice Direction in question states that it supplements a particular Rule or Section of the CPR the need for coherence means the Practice Direction should, wherever possible, be interpreted consistently with the Rules. The definition of "legal representative" in CPR 2.3(1) is therefore at least persuasive when considering the meaning of "senior legal representative" in PD3E. While Mr Crossland is a solicitor's employee, I doubt that he is "instructed to act for a party in relation to proceedings". Viewed overall, the CPR 2.3(1) definition of "legal representative" seems to me to connote someone who is representing in a legal capacity, which is not what is being done by a Costs Draftsman whose only involvement consists in preparing a costs budget and who does not give any form of legal advice or legally based representation.
11. If I am wrong in thinking that Mr Crossland is not a legal representative, I would hold that he is not a senior legal representative, for two main reasons. First, of the three people listed in the Defendant's Precedent H, he appears to be the least senior, at least by reference to his charging rate. Second, I consider that the intention underlying the requirement that the statement of truth in a costs budget be signed by a senior legal representative is that the reasonableness of the budget should be effectively certified. That can only be done with any validity by someone having conduct of the action who is in a position to gauge what resources are likely to be required to prosecute the action to its conclusion. This in turn requires the certifier to be in a position independently to assess the weight of the case in terms of legal, factual and documentary complexity. A costs draftsman may be essential for the drawing up of the costs budget, but he is not independently able to certify that the provision of resources that appears in it is reasonable, particularly where (as here) he has no other involvement in the litigation at all.
12. I therefore conclude that Mr Crossland is not a "senior legal representative" within the meaning of PD3E.
13. Does this render the Defendant's costs budget a nullity? In my judgment it does not. Certainly the fact that it has been signed by Mr Crossland is an irregularity, just as it would be if the costs budget failed to set out the Statement of Truth in full: see The Governor & Company of the Bank of Ireland v Philip Pank Partnership [2014] EWHC 284 (TCC) at [9]-[12]. But it remains the case that, while CPR 3.14 provides a sanction in the event that a party "fails to provide a budget", it does not include the additional words "complying in all respects with the formal requirements laid down by PD3E" or any other words to similar effect. Here, the document was in a form which stated it was the Defendant's Costs Budget and would immediately be recognised as such. There was nothing to impede the normal constructive discussions on figures that would have been open to the parties if it had been fully compliant. To hold that it was not a Costs Budget at all would not, in my judgment, be a proper application of a robust approach: rather, it would lack in any form of reality or justification.
14. It follows that, in my judgment, no question of a need for relief from sanctions arises. If it had done, however, I would have granted relief. For reasons that I set out in the Philip Pank Partnership judgment at [15], I would hesitate to describe any failure to do with the provision of statements of truth as "trivial"; and I have been told that, when the point was raised with the solicitor having conduct of the action for the Defendant, he incorrectly maintained the position that Mr Crossland was a suitable person to sign it. However, even in the more robust environment that now obtains, the consequences of refusing relief seem to me to be disproportionate, unjust and therefore contrary to the overriding objective. The proportionate and just response, given that no one has been significantly disadvantaged by the irregularity, is to require it to be remedied at the Defendant's cost and to compensate the Third Party for the modest cost involved in bringing the matter to the attention of the Court, summarily assessed in the sum of £50.
15. While I do not criticise the Third Party for taking the point, I note that this is the second occasion where a mere irregularity in an otherwise compliant Costs Budget has been the occasion before me for an argument that the irregularity renders the Costs Budget a nullity. Similar and analogous arguments have been raised elsewhere: see, for example, Summit Navigation Ltd v Generali Romania Asigurare [2014] EWHC 398 (Comm). I respectfully adopt what Leggatt J said at [49] of Summit:

"There remains, of course, the further consideration of the need to enforce compliance with rules, practice directions and court orders which, even on its own, must clearly be given substantial weight. But, as the Master of the Rolls emphasised in his lecture on the Jackson reforms in words approved by the Court of Appeal in Mitchell at [38], it is not the aim of the reforms to turn rules and rule compliance into "trip wires", nor into "the mistress rather than the handmaid of justice", nor to render compliance "an end in itself". It seems to me that this would be precisely the result of refusing relief in a situation where, as here, there has been non-compliance with a rule or order but the objective which the insistence on compliance seeks to serve of ensuring that litigation is conducted efficiently and at proportionate cost has not been impaired."

16. For these reasons, I reject the Third Party's submission that the Defendant should be treated as having filed a budget comprising only the applicable court fees.