Judge wrong to refuse permission to amend and relief from sanction for late cost budget (Right Support Management Limited v The London Borough of Hillingdon)

Dispute Resolution analysis: On appeal, Ritchie J has concluded that permission ought to have been granted to a Claimant who sought to amend its Particulars of Claim and that relief should have been granted from the usual, harsh sanction imposed by CPR r.3.14 for the very late filing of a cost budget. However, a less draconian sanction was imposed instead.

Right Support Management Limited v The London Borough of Hillingdon [2025] EWHC 1680 (KB)

What are the practical implications of this case?

This judgment represents an innovative approach to the question of relief from sanctions which is of historical legal interest not least because it concerns the sanction imposed by CPR r.3.14, CPR. Such is the draconian nature of the sanction imposed by that provision, this judgment has concluded on appeal that relief ought to have been granted despite the cost budget being filed and served more than 2 years late. This decision was taken by reference to various factors many of which were directed to the fact that the late filing of a cost budget in these circumstances had limited impact on the case, the parties or other court users. The appeal Court’s approach, in effect, was to replace the sanction specified in the CPR with an alternative bespoke sanction deemed to be more appropriate. The factors identified by the Court are likely to be similar to those in other cases involving the late filing of a cost budget. Accordingly, this decision rather opens the door to future Courts to look beyond the sanction specifically imposed for such breach and to craft instead an alternative sanction felt to be more appropriate to the breach concerned.

What was the background?

The underlying proceedings involved a dispute as to whether the Defendant local authority should pay for the costs of accommodating a member of the public with serious mental health challenges. In November 2020, the Claimant issued proceedings claiming the sum of £44,253.71 for unpaid accommodation and living expenses. The Defendant filed and served a defence which was subjected to heavy criticism at this hearing and the Claimant filed and served a reply. Neither party then served their cost budget by the time ordered in an order dated 16 December 2020. The Defendant’s budget was filed and served only one day late. The Claimant did not, however, file and serve its budget until 30 May 2023, some two years and four months late. In the interim, the proceedings had been focused primarily on the Defendant’s application to strike out the claim and the question of whether the member of the public concerned had capacity to and should be added as a party. On 28 February 2024, the Claimant applied to amend its Particulars of Claim. In addition to several amendments which this judgment concluded should have been agreed by consent was an amendment adding in an averment that by virtue of section 117 of the Mental Health Act 1983, supported living services including accommodation, rent and maintenance were part of the person’s aftercare which the Defendant had a duty to fund. On 12 August 2024, HHJ Saunders reluctantly refused the Claimant relief from the sanction imposed by CPR r.3.14 allowing recovery by the Claimant only of the applicable court fees by way of costs and also refused permission to amend the Particulars of Claim on the basis that the Claimant was seeking to amend to bring a new claim, finding out to be brought outside the statutory limitation period and being a tangent to the claim as originally brought. The Claimant appealed both aspects of this decision.

What did the court decide?

The appeal was allowed on both grounds. In relation to the late filing of the cost budget, the Court upheld the conclusion below that the first two limbs of the test in Denton both pointed against the grant of relief. The breach was serious and substantial and reasons given, principally the fact that the focus of the litigation had moved onto other matters were not adequate. However, when applying the third limb of the test, the Court below had focused in particular on the lack of promptness in bringing the application for relief from sanctions. In so doing, he had failed to take into account seven other factors identified in the judgment in Denton itself. Taking those factors into account, the order dismissing the application for relief from sanctions should be set aside. However, the Court was not satisfied that no sanction should be imposed upon the Claimant at all. The Claimant was ordered to pay the costs of the relief from sanctions application on which it had succeeded and had a 20% deduction imposed upon its overall recoverable costs. In relation to the application for permission to amend, the Court held that a large part of the new claim concerned invoices raised between August 2018 and 2022. The Court below erred in concluding that the new claim as a whole was statute barred and permission should readily have been granted in respect of those later invoices. In relation to those earlier invoices, the Court below erred in concluding that the new cause of action did not arise from the same or substantially the same facts. Many common factors were identified in the judgment which has been overlooked. The Court did not accept that any true prejudice would be caused to the Defendant by the introduction of the new claim and, in any event, the Defendant had acknowledged in its defence that the section 117 duty applied to it. Accordingly permission to amend should have been granted.

Case details

Court: High Court of Justice, King’s Bench Division

Judge: Mr Justice Ritchie

Date of judgment: 3 July 2025

Article by Phillip Patterson, originally published by LexisNexis here.