Much of the commentary on Master Gordon-Saker’s recent proportionality decision in BNM v MGN Limited  EWHC B13 (Costs) has understandably focused on the reductions made to the “reasonable” costs (approximately a 50% reduction). However, almost as interesting is what was not reduced.
To remind you of the figures, the Master initially assessed the costs, applying reasonableness alone as follows:
|Base profit costs||£46,321|
|Base Counsel’s fees||£14,687.50|
|Base costs of drawing the bill||£4,530|
|Atkins Thomson’s success fee||£16,780.83|
|Counsel’s success fee||£4,846.88|
Having concluded this was disproportionate he then, in his own words: “concluded that the sums which had been allowed as reasonable on the line by line assessment were disproportionate and were about twice the sum which would be proportionate. As I had been given the breakdown set out above I gave separate figures for the sums allowed”:
|Base profit costs||£24,000|
|Base Counsel’s fees||£7,300|
|Base costs of drawing the bill||£2,250|
|Atkins Thomson’s success fee||£7,920|
|Counsel’s success fee||£2,409|
It is not obvious to me that there was any need to provide a breakdown of the further “Jackson adjustment”. It seems artificial to rule that it was reasonable to spend, say, £10,000 on experts’ fees but that this will then be adjusted down to £5,000. The “Jackson adjustment”, as the second part of the proportionality test, is to ensure that the total the paying party is asked to pay is proportionate to the claim. This is concerned with the total, not the constituent parts of that total. The constituent parts are dealt with in the line by line element of the assessment.
Nevertheless, having decided to adopt that approach, the one striking part of the bill that was not reduced was the court fee element. This was left untouched.
On the one hand, I can see why a judge, particularly the Senior Costs Judge, might be reluctant to rule that court fees are disproportionate, with the implicit criticism of the Ministry of Justice (although many judges have done just that). However, does it not rather miss the point of the new proportionality test to leave them untouched?
The “Jackson adjustment” is not concerned with what it was reasonable or necessary for a receiving to incur in legal costs. It is solely concerned with what the paying party should pay as a proportionate amount.
The Master reduced the ATE premium by approximately 50% despite concluding it was a reasonable amount and necessary for the Claimant to incur. The Claimant presumably had no more control over the level of ATE premium than they did the courts fees. It was simply a cost they had to incur to pursue the claim.
Why should court fees be ring-fenced from the proportionality test?