Legal Cost Specialists

Posts made in May, 2012

New proportionality test

By on May 31, 2012 | 15 comments

The new proportionality test, due to come into force in April 2013, has now been formally unveiled in a speech by Lord Neuberger: “44.4(5) Costs incurred are proportionate if they bear a reasonable relationship to: (a) the sums in issue in the proceedings; (b) the value of any non-monetary relief in issue in the proceedings; (c) the complexity of the litigation; (d) any additional work generated by the conduct of the paying party; and (e) any wider factors involved in the proceedings, such as reputation or public importance.” Lord Neuberger summarised the aim of the new test as: “effectively reversing the approach taken in Lownds. In this way, as Sir Rupert said, disproportionate costs, whether necessarily or reasonably incurred, should not be recoverable from the paying party. To put the point quite simply: necessity does not render costs proportionate.” He anticipates that: “As such it seems likely that, as the courts develop the law, the approach will be as Sir Rupert described it: ‘. . . in an assessment of costs on the standard basis, proportionality should prevail over reasonableness and the proportionality test should be applied on a global basis. The court should first make an assessment of reasonable costs, having regard to the individual items in the bill, the time reasonably spent on those items and the other factors listed in CPR rule 44.5(3). The court should then stand back and consider whether the total figure is proportionate. If the total figure is not proportionate, the court should make an appropriate reduction.” It is acknowledged that the failure to give any detailed guidance as to how the test will operate may mean: “there may be a period of slight uncertainty as the case law is developed. … The law on proportionate costs will have to be developed on a case by case basis. This may mean a degree of satellite litigation while the courts work out the law, but we should be ready for that, and I hope it will involve relatively few cases.” A “a period of slight uncertainty” and “a degree of satellite litigation”? I know who gets my nomination for understatements of the...

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Floored over size of costs bill

By on May 25, 2012 | 1 comment

I mentioned the other day the case of Faidi v Elliott Corporation [2012] EWCA Civ 287 and the failure of the parties to consider mediation in a dispute over a wooden floor. Dominic Regan, writing in the New Law Journal, had this to say: “The Court of Appeal was not impressed and declared that there must be give and take. It was suggested that a mediation would have been a better investment than the £140,134 chucked at the litigation. A mediator could, for example, have suggested that some rugs might have been strategically placed around the flat, something a judge could not order. Thank the Lord for that. The idea that Lord Justice Ward might start doling out interior design tips à la Laurence Llewelyn-Bowen is too much for me.” Dominic...

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Failure to mediate

By on May 23, 2012 | 3 comments

Lord Justice Jackson, in Faidi & Anor v Elliot Corporation [2012] EWCA Civ 287, commenting on the failure of the parties to engage in mediation over a claim concerning a dispute over wooden floorboards: “As it is, neither side wrote to the other proposing mediation until shortly before the hearing in the Court of Appeal. By then huge costs had been incurred. The claimants’ costs up to the end of trial were £23,195. The claimants incurred a further £34,609 costs on the appeal. The defendant’s costs up to the end of trial were £32,798. The defendant incurred a further £49,532 costs on the appeal. Thus the total costs thrown away amount to £140,134. If the parties were driven by concern for the well being of lawyers, they could have given half that sum to the Solicitors Benevolent Association and then resolved their dispute for a modest fraction of the monies left...

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Compensation Culture

By on May 21, 2012 | 1 comment

Light hearted satire and a comprehensive history of maintenance and champerty. BBC comedy at its best: Tom Wrigglesworth’s Open Letters: Compensation Culture

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Retrospective proportionality test?

By on May 17, 2012 | 2 comments

A new proportionality test is shortly to be announced, which will come into force in April 2013. Will it be retrospective? Or rather, will the rules committee remember to draft transitional provisions to deal with this?

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