Solicitors involved in litigation have no option but to adhere to strict new costs rules or face a wave of professional negligence claims, experts warned today.

Law firms across the country are poring over the landmark Court of Appeal judgment concerning a plea for relief from sanctions in the Andrew Mitchell libel case.

The court today told lawyers representing the Conservative former chief whip in his libel claim that even if he succeeds, the defendant, News Group Newspapers, will not be liable for his costs.

The judgment upheld a previous High Court ruling that punished Atkins Thomson for filing a costs budget one day before the costs management conference, rather than the minimum seven.

Master of the rolls Lord Dyson (pictured) expressed his hope the decision sent a ‘clear message’ to solicitors to become more efficient and routinely comply with rules, practice directions and orders.

Andy Ellis, managing director of costs consultant Practico, which advised the firm representing News Group Newspapers against Mitchell, said the ruling shows the judiciary is more committed than ever to costs budgeting.

He said: ‘The new culture is not zero tolerance – the court was clear that it is not concerned with trivial breaches. 

‘But the wriggle room is now extremely narrow when delay will result and especially if the court is inconvenienced.’

‘It was also evident that mere inadvertence or pressure of work (unkindly described by some as “the dog ate my homework” form of excuse) will not get you home when seeking relief from sanctions.’

Murray Heining, chairman of the Association of Costs Lawyers, said the case can be regarded as ‘easily’ the most important civil litigation judgment of the year.

‘This a judgment that will give Ethelred [the unready]-type lawyers sleepless nights,’ he added. ‘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 civil procedure rules and all orders made.’

Glenn Newberry, head of costs at international firm Eversheds, said the ruling is a clear message that sanctions, however severe they may appear, will be upheld by the court.

He added: ‘There is now considerable pressure on solicitors to prepare, exchange and discuss their costs budgets in accordance with the rules, and ensure those budgets are monitored and adhered to as the case progresses.’

But solicitors have been quick to pick up on the intended consequences of the court’s stance on non-compliance with Jackson rules.

Francesca Kaye, president of London Solicitors Litigation Association, said it was ‘questionable’ whether strict adherence to the rules will avert the risk of satellite litigation, as envisaged in the judgment.

She added: ‘There’s every chance that there will be a great deal of satellite litigation around professional negligence claims. So, we may simply be moving the problem not eliminating it.’

And Rod Evans, president of the Forum of Insurance Lawyers, suggested the ruling could mark a ‘retrograde step’ in personal injury litigation.

‘For years we have been encouraged to adopt a “cards on the table” approach to litigation and to work sensibly together to resolve the matter as soon as possible at proportionate cost.

‘The Court of Appeal’s (almost) zero tolerance to delay will mark a return to the tactical litigation that had reduced significantly, certainly in the most serious cases. I have no doubt that parties will now be tempted to try and catch each other out.’