The defendant costs specialists

The new proportionality test in costs

By on Jun 17, 2016 | 1 comment

Hot on the heels of Master Gordon-Saker’s proportionality decision in BNM v MGN Limited [2016] EWHC B13 (Costs) is another decision from the Senior Courts Costs Office, this time from Master Rowley in Dr Brian May v Wavell Group Plc.

Here, the figures are even starker in terms of the reductions applied.  The initial assessment, on the basis of reasonableness alone, reduced the bill from £208,236.54 to £99,655.74.  The second part of the test, the “Jackson reduction”, reduced this to £35,000 plus VAT.  The damages agreed were £25,000.

A fuller summary of the decision and a copy of the judgment can be found on the Civil Litigation Brief.

The stand out parts of the judgment are:

“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 it is appropriate for the paying party to pay by reference to the five factors in 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.

In cases such as this, it seems to me that the new test of proportionality … will require legal representatives to inform their clients that, even if successful, they will receive no more than a contribution to the costs that will be incurred.  It may be that such advice proves to be a driver for the costs to be reduced or for alternative dispute resolution mechanisms to be explored.”

In both this case and the earlier case of BNM v MGN Limited, Jamie Carpenter acted for the paying party.  A rising star of the Costs Bar.

    1 Comment

  1. What he means to say is that if you have a small claim that has any degree of complexity then the english court system no longer provides you with a remedy.On the other hand if you are a big company with a big claim the courts are open for business as usual albeit that the service you will receive is pretty awful because of the cuts.

    john hall

    17th June 2016

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