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Costs – The Ugly Truth

John Hodgkinson

John Hodgkinson, Senior Solicitor Advocate

 In today’s harsher litigation climate, the ugly truth has seemed to be that if you ‘don’t comply you die.’

In other words, unless there is full compliance with everything required to be done, there will be severe consequences. Until recently relief from sanctions appeared to be the forlorn hope of persuading a Court that the breach was trivial. Now there has been a ‘dent in’ this perception after Denton.

The apparent shift has been perhaps been gathering pace post Denton, except the ‘ugly truth’ is a shift against opposing applications for relief This truth is the possibility that a non-compliant party seeks relief for a clear breach but the other, innocent, party ends up paying costs for the privilege.

To an extent this ‘ugly truth’ featured in Cartus Corporation and another v (1) Wayne Sidell and another [2014] EWHC 2492 (QB).

The issues surrounded the Defendant’s intentions of publishing ‘The Ugly Truth’ about the Claimant, and a covering letter.

As set out in the Judgment:

‘The Defendants had not complied with a consent order made by Burnett J. on 28th March 2014 to serve their evidence in opposition to the continuation of the injunction by 10th April 2014. They issued an application for an extension of time and/or relief from sanctions on 5th May 2014. The Claimants opposed this, but an extension was granted. Other procedural directions were made. Mr Caldecott (for the Claimant) suggested that a fair reflection of this stage of the proceedings would be to make no order as to costs for it.’

‘This stage’ being but one of five stages requiring consideration of costs consequences. The overall decision was that the Claimant should have 50% of their costs, with two exceptions. One of these was that the Claimant should not have their costs of the Defendant’s application for relief from sanctions. In context the Judge said there should be no order for costs taking account of ‘other directions.’ The blunt message was however that: ‘Whether a sanction was attached to that order or not, they needed to have an extension of time approved by the Court. The Claimants ought not to have opposed the application.’

If the relief from sanctions issue was the sole matter before the Court, the implications seem clear, namely that the Defendant would have been given costs against the Claimant.

The ugly truth now, is that even if you are the innocent party, you may end up paying costs if the Court considers your opposition to be unreasonable.

Perhaps this new emphasis will cause parties who have ‘jumped on the bandwagon’ to think again about opposing your application for relief.

No cause for complacency, but a useful check on those who have become unduly aggressive.