Guidance on the new proportionality test
The new Senior Costs Judge Master Gordon-Saker recently suggested there was no need for further guidance on the new proportionality test. He said:
“It is said that we will need guidance on how to apply the new test. I disagree. The guidance is already there. It is likely that somebody will in some case or another seek to appeal the approach that has been taken. But I would suggest that there is no reason to suppose that the court hearing the appeal will do other than restate the guidance that has already been given by Jackson LJ in his final report:
… I propose that 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. There is already a precedent for this approach in relation to the assessment of legal aid costs in criminal proceedings: see R v Supreme Court Taxing Office ex p John Singh and Co  1 Costs LR 49.”
This is to be contrasted with the views of Professor Dominic Regan, writing in the New Law Journal, that:
“it is going to cost a lot of money by way of test cases to determine the new, sensible approach to proportionate costs”
So, which view is correct?
In one sense, I would suggest they are both wrong.
A more detailed analysis of this issue can be seen here, but the problem boils down to the fact the new test is probably unworkable. On the one hand, guidance is clearly needed as to how the court should approach the issue of proportionality where, for example, a routine claim settles for £50,000 and the “reasonable” costs are assessed at £200,000. What should the court reduce this to applying the new proportionality test? If the answer to this is obvious from the guidance already given, I have yet to hear a costs judge or costs practitioner explain it to me. Without further guidance there will be the most extreme and absurd inconsistency from court to court and judge to judge. This goes far beyond any issue of judicial discretion. Justice requires a level of predictability and certainty that cannot happen without further guidance.
However, what meaningful guidance can the Court of Appeal provide that does not amount to some type of fixed tariff or a percentage of the damages recovered? To introduce this across the board would go far further than anything Lord Justice Jackson recommended.
We are thus faced with the situation where further guidance is urgently needed but there is nothing meaningful which can be said which does not lead down an entirely unintended route.