NATIONAL HOUSE-BUILDING COUNCIL v HODSON DEVELOPMENTS LTD & ORS [2025] EWHC 3438 (TCC)

A limited company without legal representation remains subject to CPR 3.13 costs budgeting requirements. Relief from sanction was refused where the director failed to calculate a deadline that would not have been difficult to ascertain.

• The automatic sanction under CPR 3.14, which restricts a defaulting party’s future recoverable costs to court fees only, is forward-facing; it does not automatically preclude recovery of costs already incurred prior to the default. [8]
• When considering an application for relief from the CPR 3.14 sanction, the court applies the three-stage Denton test, with particular regard to the factors in CPR 3.9(1)(a) and (b) concerning efficient litigation and the need to enforce compliance. [3, 6]
• A failure to file a costs budget by the prescribed deadline is a serious and significant breach, particularly where it causes delay, necessitates an additional hearing, and hinders the court’s ability to manage costs and the case efficiently. [20, 21, 31]
• The fact that a party’s director was preoccupied with other pressing business matters and hoped that former solicitors would resume representation does not, without more, constitute a good reason for a default in complying with procedural deadlines. [25, 27, 29]
• The proportionality of the CPR 3.14 sanction is assessed in the context of the specific breach; the sanction is not inherently disproportionate, and its maintenance will not be considered manifestly unjust where the breach is serious, lacks good reason, and has caused inefficiency. [33, 34]