Relief from Sanctions - Failure To File A Costs Budget On Time

On 3 July 2025 Mr Justice Ritchie promulgate a decision in Right Support Management Ltd v LB Hillingdon [2025] EWHC 1680 (KB).  This case concerned two issues to the Claimant’s application.  The first (which is not commented on here) was to amend the particulars of claim.  The second limb was in relation to obtaining relief from sanctions pursuant to CPR 3.14 and the third limb of the Denton –v- White [2014] EWCA Civ 906 principle.

The claimant was to file their costs budget on or before the 18 January 2021.  They failed to do so.  The claimant did not serve it until the 30 May 2023 a delay of 2 years and months.  The court considered in the first instance to be a serious and significant breach.  There the claimant had failed to convince the court that there was a good reason.  Failure to file a costs budget has severe consequences on the recoverability of costs.  The claimant therefore filed an application.  The case came before Mr Justice Richie for the appeal.  The court focused on the third limb of Denton.  The court was therefore required to consider “all the circumstances of the case”.  In doing so the court identified a number of errors in the first instance judge’s reasoning, such as:

• No actual impact on the litigation – The lower court incorrectly concluded that the late filing “must have delayed these proceedings”. On appeal no evidence that the breach actually affected the litigation timeline of the ability to litigate effectively.  The case was already delayed due to other factors such as the Defendant’s application to strike-out, the application to join BD, and the need to have a capacity assessment and possibly the most important factor there had been no CCMC hearing and evidence and disclosure had not started.
• The application for relief delayed – Mr Justice Richie deemed the lower court’s interpretation to the 2-month rule as found in Diriye –v- Bojaj Mr Justice Ritchie held that “there is no such rigid rule for promptness” all cases are fact-specific. He found that the delay caused no difference on the progression of the matter.
• Overriding Objective – CPR 1.1 – the appeal found that the lower court failed to apply CPR 1.1 effectively, opining that “the Rules are the servant of justice and not vice versa”. The breach was not an “unless order” and it was not found to be intentional.

Though whilst the appeal on relief from sanction was granted and the lower court’s order set aside, Mr Justice Ritchie still imposed a sanction.  He ordered that the Claimant must pay the Defendant’s costs of both applications (the amendment to the particulars of claim and the relief from sanctions) and were to face a 20% reduction from the total cost recoverable from the action.

Why this decision is important is it reminds us that the court must adopt a nuanced and fact-sensitive approach when considering relief from sanctions.  Justice must prevail while upholding procedural compliance without mechanistic application of the rules.

Cost Law Services Ltd is a leading and fast growing UK-wide costs practice.  The firm is highly regarded for the inter partes work where they deal with and undertake work in a multitude of areas.  They are also considered one of the largest and strongest providers of Legal Aid costs.  If we can assist you or your firm in any way, please do not hesitate to contact as on info@costslawservices.com

By Wayne Spring

National Training & Development Manager, Chartered Fellow of the Institute of the Legal Executives