"Plebgate" costs ruling published

Andrew Mitchell MP has lost his appeal over costs sanctions in his “Plebgate” case, in an important ruling on the Jackson reforms.

Mitchell’s solicitors were late in submitting their budget during his libel action against The Sun newspaper over “Plebgate”, which centred on whether he called a Downing Street police officer a “pleb”.

Consequently, Master McCloud imposed costs sanctions for non-compliance with the pilot defamation costs management scheme in operation at the time. This limited the costs recoverable to the court fees, whereas the defendant’s costs budget was £589,558. Mitchell’s legal team appealed.

Giving the lead judgment, Lord Dyson, the Master of the Rolls, rejected both limbs of Mitchell’s appeal, in Mitchell v News Group Newspapers [2013] EWCA Civ 1537, this week, and said he wanted to “send out a clear message”.

He acknowledged Master McCloud made a “robust decision” but said she was “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.”

Murray Heining, chairman of the Association of Costs Lawyers, says: “This case can be regarded as easily the most important civil litigation judgment of the year.”

“It is a judgment that will give Ethelred [the unready] type lawyers sleepless nights. Those lawyers working with a team of experts including costs lawyers should sleep more comfortably.

“Those practising in civil litigation, if they have not already reviewed their practices and procedures, must do so now and ensure that they have the resources to ensure compliance with the CPR and all orders made. They must also ensure that they have the resources to meet procedural obligations.” 

Geraldine Elliott, partner at City law firm RPC, says: “This ruling will be seen as a blow for businesses and individuals that choose to pay for the very best legal advice because it introduces a risk that an administrative error will leave them having to pay their own legal costs even if they win. 

“The ruling could mean we see more professional negligence cases against law firms who fail to submit an accurate costs budget in time.  Clients being forced to pay their own costs bills may seek to recover those costs from their lawyers if they think their legal advisers have made a mistake in submitting a costs budget. 

 “With law firms obliged to submit their budget as long as a year before the litigation reaches the court, it can be very difficult for a law firm to make an accurate estimate of its costs and so the successful claimant may be penalised by getting a lower costs recover from the loser. The winners from this ruling will be clients of law firms who use sophisticated cost budgeting tools to make early and accurate costs predictions.”