The High Court has upheld a decision to refuse relief from sanctions to a party who served their costs budget a day late. Mr Daniel Alexander QC said the lateness was unexplained and exacerbated by the enforced Christmas break, forcing court time to be taken up arguing over relief from sanctions.

In Lakhani & Anor v Mahmud & Ors, the defendant in a freehold dispute over car parking land had been given 21 days from 18 November 2016 to file their budget, ahead of a costs and case management conference due to take place on 10 January.

The claimants’ costs budget sought more than £100,000 in costs - an amount which would be significantly reduced by the judge – and the defendants around half that figure. But because the budget was served a day late, the automatic consequence was that, unless relief from sanctions was permitted, the defendants could not recover any more than court costs if successful in the claim.

At the January hearing, His Honour Judge Lochrane dismissed the application for relief from sanctions, having been ‘unimpressed’ with attempts to argue that the actual deadline was 20 December.

Alexander upheld that decision, saying the application was not made in a timely manner or immediately after 20 December. Instead, it was lodged at the last minute just before the January hearing, with the defendants’ solicitors, west London firm IBB Law, holding the position that no application was needed.

He said the circumstances in which the application was eventually made, and the late service of evidence, precluded the claimants from serving evidence in response to it or having a reasonable time in which to consider whether it should be opposed. He added that the defendants’ solicitors knew time for agreeing costs would also be limited by the Christmas break that came during the period for considering each side’s budget.

A 45 minute hearing to determine ‘comparatively simple’ costs budgets was turned into a half-day hearing, dominated by the issue of relief from sanctions. Alexander said the late service of the costs budget and the consequential dispute over relief from sanctions had potential to disrupt agreement over costs budgets.

The judge added: ‘The decision was, perhaps, on the tougher end of the spectrum as to substance and on the leaner end of the spectrum as to analysis. But the defendants have not been deprived of a trial altogether.’