The price of litigation

Mark Balme – Costs Advocate

Mark Balme, Costs Advocate at PIC critiques West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220 (17 July 2019)

 

I prepared this article as I wanted to interrogate West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220 (17 July 2019) beyond the various commentaries hitherto. I am not going to talk about the headlines, but instead consider the nuances of the Judgment and how costs practice might hopefully develop in the future as a result.

What the Court of Appeal says about proportionality is, in my opinion quite teasing and quite clearly open to interpretation.

    1. 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.

I think we would all agree with what is said here.

    1. 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.

I observe that Court fees do not have an irreducible minimum, because there will be instances where the paying party might properly contend that the claim was optimistically valued in any event.

More importantly, I would say the litigation can clearly be progressed without court fees if the Claimant qualifies for exemption, but there are circumstances where there is no option but to issue proceedings, without which the litigation clearly cannot be progressed.

Taken further the bulk of the work on most claims such as factual investigations, witness and medical evidence, procedural matters and quantum considerations are all vital, and again are matters without which the litigation could not progress. Then throw into the pot everything the Defendant does reciprocally, again without which the litigation could not progress, and the big proportionate picture begins to arguably emerge, and then there are all the things that the parties are compelled to do in compliance with Orders.

The examples given, whilst arguably of the meaning I give them, must of course be subject to the test of reasonableness of amount, which once determined should not be then taken into account in the context of proportionality, for reasons as aforesaid.

    1. 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 the final figure is proportionate. Such costs are, however, likely to be costs which have been incurred as a result of the exercise of judgement by the solicitor or counsel. Those are precisely the sorts of costs which the new rules as to proportionality were designed to control.

The above seems clear and describes costs which do not fit the definitions prescribed at 82. In terms, this is effectively all work done at the discretion of Solicitors, which is not inevitable, or which are not subject to an irreducible minimum.

One might better describe those costs within the meaning of Francis v Francis and Dickerson [1956] P 1887, 95

The correct viewpoint to be adopted by a taxing officer is that of a sensible solicitor sitting in his chair and considering what in light of his then knowledge is reasonable in the interests of his lay client…it is wrong for a taxing officer to adopt an attitude akin to a revenue official called upon to apply rigorously one of those Income Tax Rules as to expenses which have been judicially described as “jealously restricted” and “notoriously rigid and narrow in their operation”. I should add that, as previously indicated, the lay client in question should be deemed a man of means adequate to bear the expense of the litigation out of his own pocket – and by “adequate” I mean neither “barely adequate” nor “superabundant”.

Turning back to West the Court of Appeal stated.

    1. As should be apparent, leaving particular items out of account when considering proportionality because they are both reasonable and an unavoidable expenditure does not re-introduce the Lownds test, by which necessity always trumped proportionality. Most costs will still be subject to the proportionality requirement

I agree that Lownds is no longer, but do not agree that most costs will be subject to the proportionality requirement, but certainly accept that ordinarily a large part of the costs will be, but on assessment the Court must be very careful to separate inevitable or (as I say) unavoidable core costs of investigating, incepting, proving and concluding the claim. as distinct from costs occasioned by the exercise of the Solicitors judgment and discretion, and then apply the test within the meaning of CTR 44,3 (5) having regard CPR 44.3 (2).

If you have any queries arising from this article, then please do not hesitate to contact us whereupon we will be happy to assist you.

Mark Balme – Costs Advocate – Partners in Costs

29.08.2019

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