PROPORTIONALITY CONTINUES TO GET TOUGHER

The case of May & May -v- Wavell Group & Dr Bizarri [2016] is a another case which demonstrates the power of CPR 44.3(2) – ‘the Jackson test of proportionality’.  Here is a basic summary of the case:

  • Proceedings brought by the Claimants for private nuisance;
  • Claimants accepted the Defendants’ Part 36 offer of £25,000.00 prior to the Defendants entering their Defences;
  • The Claimant’s Bill of Costs totalled £208,236.54;
  • All work undertaken post 1 April 2013, so the ‘Jackson test of proportionality’ applied;
  • Following detailed assessment Master Rowley reduced the Bill of Costs to £99,655.74;
  • Master Rowley felt that £99,655.74 was disproportionate;
  • Master Rowley determined that the claim was neither legally not factually complex
  • Master Rowley then sat back and took into account CPR 44.3(5) before reducing the Bill of Costs to £35,000.00 plus VAT;

This is a case that further demonstrates that the Senior Courts Costs Office are not afraid to apply CPR 44.3(2) (see my recent blog for another example).

Here are some key extracts from the Judgment.

Paragraph 35:

“It seems to me to be clear that where the sums in issue are modest, the Kazakhstan method is still too generous to the receiving party under the new approach.  The amount that can be recovered from the paying party is not the minimum sum necessary to bring or defend the case successfully.  It is a sum which is appropriate for the paying party to pay by reference to the five factors CPR 44.3 (5).  It is not the amount required to achieve justice in the eyes of the receiving party but only a contribution to that receiving party’s costs in many modest cases”

Paragraph 45:

“I reject Mr Carpenter’s argument that the costs should never exceed the damages as seeking to elevate the first aspect of the 44.3 (5) test to a different level from the remainder.  In paragraph 5.6 referred to above, Sir Rupert Jackson refers to the possibility of low value but complex litigation incurring costs above the value of the damages.  Whilst I have determined that this was not legally or factually complex case, it has undoubtedly relied upon the use of expert evidence.  No claim could have been brought without such evidence to calibrate the noise involved and to compare it with the level of noise otherwise involved in everyday living.  Such evidence has a cost in itself and also involves legal work in support”.

I now predict that we will start to see more and more cases where the new test of proportionality is applied.  In terms of the test, I think we will see consistency and some logic for cases heard at the Senior Courts Costs Office, but I doubt we will see that consistency at the various County Courts around the country. This is where the new test of proportionality could encounter problems.

It will be really interesting to see how the ‘Jackson test of proportionality’ starts to develop. One thing is for sure though – LJ Jackson wanted proportionate legal costs and he is now starting to achieve it (and he is achieving it without fixed costs).
This blog was prepared by Andrew McAulay who is a Partner at Clarion and the Head of the Costs and Litigation Funding department.   Andrew can be contacted at andrew.mcaulay@clarionsolicitors.com or on 0113 336 3334.

 

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2 thoughts on “PROPORTIONALITY CONTINUES TO GET TOUGHER

  1. […] When considering a claim for costs lawyers should pay attention to the costs contained within the bill of costs when estimating the likely level of recovery. The 70% ‘myth’ should not be the starting point. Advising a client that 70% is the ‘norm’ could actually mean the client is paying more or receiving less than they should be. My advice is therefore to proceed with caution and shy away from relying on the 70% ‘costs myth’. This is now more important than ever in light of the new test for proportionality and the impact that this can have on summary or detailed assessment (Who Needs Fixed Costs and Proportionality continues to get tougher). […]

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