Legal Cost Specialists

Posts made in October, 2019

Proportionality after West v Stockport NHS Foundation Trust

By on Oct 31, 2019 | 0 comments

This is the second look at the guidance given on the new proportionality test by the Court of Appeal in West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220. The previous post explored how the Court dealt a fatal blow to the new rule by introducing a test as to whether work was “unavoidable expenditure” (in which case it was to be allowed) and pretended that this was logically different to the “necessarily incurred” test under Lownds. The problem with this judgment does not end there. Remember how the new test was meant to work? The current version of the White Book states at 44.3.3: “The general practice on detailed assessment is to consider the reasonableness of each item that has been challenged and then to consider whether the total sum that would be allowed on that basis is proportionate or not.  If it is not proportionate, the court will then reduce the total figure to a sum which is proportionate.  That is the approach suggested by Jackson LJ in the Review of Civil Litigation Costs: Final Report (December 2010) Pt 1, Ch.3, para.5.13, and endorsed by Lord Neuberger (then Master of the Rolls) in the 15th implementation lecture on the Jackson reforms, entitled Proportionate Costs and given on 29 May 2012.” At the lecture referred to, 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.” The practical effect of this would be: “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...

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Proportionality revised by West v Stockport NHS Foundation Trust

By on Oct 28, 2019 | 3 comments

There has now been time to reflect on the Court of Appeal’s proportionality guidance given in the case of West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220.  And what a sorry mess that guidance was. The first part of the guidance related to the reasonableness and proportionality of the ATE premium.  The Court was concerned with two ATE premiums, each costing £5,088, as against two separate clinical negligence claims that settled for £10,000 and £4,500 respectively. The Court reheated the pre-Jackson decision of Rogers v Merthyr Tydfil County Borough Council [2006] EWCA Civ 1134 and decided, so far as relevant, that it basically remained good law when assessing ATE premiums.  (The key finding in Rogers being: “if the court concludes that it was necessary to incur the staged premium, then as this court’s judgment in Lownds shows, it should be adjudged a proportionate expense”.)  This is surprising given Lownds was clearly overturned by the Jackson reforms, as expressly recognised by the Court here: “we make clear that Lownds must no longer be regarded as good law” Nevertheless, the Court decided that the dead body of Lownds was to be resurrected in the context of assessing ATE premiums: “Specifically, therefore, if the ATE premium is assessed as reasonable, it will not fall to be reduced by any further assessment of proportionality.” It is the reasoning behind this conclusion that is particularly troubling: “This last point raises the wider issue as to whether, when considering proportionality, the judge needs to have regard to every item of cost, or whether there are some costs which ought to be removed from that part of the assessment. We consider that, when the judge comes to consider proportionality, there are some elements of costs which should be left out of account. The exceptions are those items of cost which are fixed and unavoidable, or which have an irreducible minimum, without which the litigation could not have been progressed. Court fees are perhaps the best example.” The Court elaborated: “We recognise that this means that, when undertaking the proportionality exercise, it is those elements of cost which are not inevitable or which are not subject to an irreducible minimum which will be vulnerable to reduction on proportionality grounds in order that...

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New Guidance Notes on Precedent H

By on Oct 18, 2019 | 0 comments

The new Guidance Notes on Precedent H have now been published following the update to PD3E para.7.4 (which came into force on 1 October 2019) which now defines budgeted and incurred costs as: “a. Incurred costs are all costs incurred up to and including the date of the first costs management order, unless otherwise ordered. b. Budgeted costs are all costs to be incurred after the date of the first costs management order.” However, there are other significant amendments to the Guidance Notes.  The most important being that trial brief fees are now to be placed in the “Trial preparation” phase rather than the “Trial” phase, although refreshers remain in the “Trial” phase. This amendment is likely to trip up many.  It will be interesting to see how lenient the courts are where the brief fee is placed in the wrong...

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