24 October, 2012

New proportionality test

Filed UnderLegal Costs  

Earlier in the year specialist costs counsel Andrew Hogan wrote about the various alternative proposals for a new proportionality rule. Commenting on the Longstop Model (i.e. undertaking an assessment applying reasonableness and at the end of the assessment process the judge can stand back and reduce the figure further if the amount appears disproportionate - this is the model that appears to have been adopted) he wrote:

“The notion of a “long stop” discount test of proportionality, is a recipe for satellite litigation, as it will introduce chronic uncertainty into the assessment of costs, both in terms of when such a deduction will be applied and in terms of what the quantum of deduction might be. Perhaps, more significantly, it is disappointing that even now, some 15 years after Lord Woolf ‘borrowed’ the concept of principle of proportionality from European Union law, it remains a nebulous and uncertain concept, hard to define and even harder to apply, which is conceptually very odd, when one considers that the stated aim of Jackson was to reduce perceived disproportionate costs to a proportionate level. If you can’t define proportionality, how can you judge whether you have succeeded or not in moving from a disproportionate model of costs to a proportionate one?”

I have yet to meet a costs practitioner who believes that the new proportionality test is workable.

More worryingly, I have yet to meet a costs judge who is able to explain by what margin, if any, a Bill of Costs in relation to routine litigation that has been assessed at £75,000 applying the reasonableness test should then be reduced down to if the amount in dispute was only £25,000.

Comments

One Response to “New proportionality test”

  1. Pete B on October 24th, 2012 4:36 pm

    The whole idea of this test is ridiculous. The Court’s should allow all reasonably incurred costs at a reasonable hourly rate. How can any paying party be aggrieved that they have to pay costs on that basis? I fail to see how the end result can possibly be unreasonable.

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