The defendant costs specialists

Proportionality test – providing specific reasoning

By on Jan 17, 2018 | 0 comments

At the heart of the successful appeal in May v Wavell Group was the appeal judge’s view that, apparently, the issue of proportionality is something readily discoverable once all the relevant factors have been taken into account.  He held:

“the construction of the rules relating to the definition of proportionality and their application do not involve a discretion properly so called but require the court to make a judgment on what the rules mean and how they should be applied. That is a matter of law. The application of the rules, once interpreted, require a balance to be undertaken, in that weight (which includes the possibility of no weight) has to be accorded to each of the factors specified by the rules, but that again is the making of a judgment, albeit of a rather broader nature than construction of the rules, rather than the exercise of a discretion.”

and:

“There may be a limited range of acceptable difference in the total figure once the rules have been applied, in that different judges could legitimately come to slightly different conclusions as to the proportionate sum, and so long as they have applied the rules correctly they should not be open to challenge on appeal.”

Given the rules and Practice Direction are entirely silent as to what amounts to “proportionality”, this is a surprising view.  We now have a member of the judiciary who believes that the new proportionality test can be applied in a quasi-scientific manner.

Again:

“Whether the relationship is reasonable is, in my view, a matter of judgment, rather than discretion, and, as I have said above, requires a costs judge to attribute weight, and sometimes no weight, to each of the factors (a) to (e).”

His criticism of Master Rowley’s decision was that:

“the final figure in this case does not appear to be based on any specific mathematical calculation nor is there a specific explanation of how the weighting of the various factors resulted in the final figure.”

Surely then, the appeal decision undertook just such a careful mathematical calculation and/or gave a specific explanation as to the weighting given when allowing the figure of £75,000 plus VAT.  Here it is:

“In those circumstances we have undertaken our own assessment of the costs having regard to the factors mentioned in this judgment. We have given greater weight to the sums in issue and to the factor of complexity, both of which tip the balance significantly in the appellants’ favour. We have discounted the notional reduction for early settlement. We bear in mind, as the respondents recognised in argument, that the reduction made on the item by item assessment was unusually large, albeit unchallenged on appeal and that the learned Master concluded that it had been reasonable for the claimants to have spent nearly £100,000 on costs prior to settlement. When the reasonable costs are compared against a value of between £50,000 and £100,000 in a reasonably complex claim requiring specialist expert evidence, in what is to judge from the pre-action correspondence likely to be hard fought litigation, they appear less disproportionate than previously. We have revisited the elements of the bill and take the following approach, having regard to our view of the factors, including the factors which were not challenged before us. First, we would not reduce the court fees or costs of drawing the bill and secondly we would apply a smaller reduction to the expert’s fees than we would to the profit costs reflecting our view of the essential part played by the expert evidence. In those circumstances I concluded that in all the circumstances the proportionate figure is £75,000 (plus VAT), which I believe to be a fair figure bearing a reasonable relationship to the factors as I see them after taking careful account of the advice of Master Whalan to whom I am particularly indebted at this stage of the process.”

I am sorry, but this is doing no more than substituting one arbitrary figure for another.  There is nothing approaching any kind of reasoning as to why one figure is more proportionate than another.

For example, the judge disagreed with Master Rowley’s decision that this “case was neither legally nor factually complicated”.  The appeal judge concluded:

“If one compares such a claim to the range of claims which are made in the county court it can readily be seen that this is towards the more complex end of the range. It is almost impossible to generalise but there will be many road traffic accident claims and those arising out of sale of goods or contracts, all of similar value (ie £50,000 to £100,00) which may be much less complex than this claim. …  Although this case may not have been complex within its category it seems to me that it was complex when compared with other claims of similar value within the county court.”

However, the judgment fails to give any indication as to how much weight the complexity issue was given, other than it was “greater” than Master Rowley (who in fact gave it no weight as he concluded it was not complex).  Put another way, if this claim had been, in terms of complexity, more like the many “road traffic accident claims and those arising out of sale of goods or contracts” that are “much less complex”, what amount would have been judged as proportionate?  If this is a question of law, as opposed to discretion, there should be a ready answer and it should be spelt out in any detailed assessment (or subsequent appeal).

There is something rather unsatisfactory about an appeal judge criticising a judge below for lack of reasoning and then repeating exactly the same “error” himself.

 

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