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...

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Proportionality – May v Wavell Group appeal

By on Jan 16, 2018 | 1 comment

The history of the courts’ attempts to ensure legal costs are proportionate is a strange one.  The appeal decision in May v Wavell Group Plc is no exception to that trend. To recap, Master Rowley, on a line-by-line assessment, reduced the costs claimed from £208,236.54 to £99,655.74.  He then concluded that this was still disproportionate for a claim which settled pre-trial for £25,000 and made a further global reduction, to reflect proportionality, down to £35,000 plus VAT. On appeal, His Honour Judge Dight, CBE concluded that Master Rowley had misinterpreted and misapplied the new proportionality test and concluded a figure of £75,000 plus VAT was proportionate (presumably resulting in a global figure close to £90,000).  (There was no challenge to the finding that the reasonable costs were £99,655.74.) Of the various interesting comments made by the judge, one that stands out is: “I doubt … that the proper interpretation of the rules requires or indeed entitles a costs judge at the end of an item by item assessment to impose a very substantial reduction on the overall figure without regard to the component parts.” The issue of whether it is appropriate to reduce a successful litigant’s costs below the level that it was reasonable and necessary for him to incur is one of policy.  There were many strong arguments advanced as part of the Jackson consultation process as to why this was wrong, but those arguments did not prevail.  (It is equally a matter of policy that means that in the field of personal injury claims, successful defendants are now usually deprived of all the legal costs they have reasonably and necessarily incurred.) The rules relating to proportionality expressly state: “Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred” The express intention of the new rule is that proportionality trumps reasonableness/necessity (ie the assessment of the component parts). On what basis can it be suggested from the wording of the rules that the test is not designed to “impose a very substantial reduction on the overall figure”?  There is none.  A County Court judge has decided he does not like the new proportionality test and has therefore sought to re-write...

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