Thoughts About Proportionality

Ian Moxon Costs Lawyer

It’s June 2019 – almost six years after the Jackson style changes to the Civil Procedure Rules and there is still no binding case law (Court of Appeal decision/ guidance) in relation to what proportionate costs are (or should be) under the new test of proportionality and no Practice Direction to accompany CPR 44.3 either. So, therefore, beyond what is actually stated clearly in CPR 44.3 (and, to some extent CPR 1.1 and 44.4) no one actually knows what the new test of proportionality actually means yet or how it should operate. There have been some decisions in relation to proportionately at lower Court’s level, and some comments have been made about proportionally within judgments (obiter dicta), but the Legal Pundits and Journalists who comment so enthusiastically on those decisions must not forget the doctrine of precedent i.e. although High Court Judges and lower Courts Judges, including those Judges in the SCCO, will tend to follow each other’s decisions, they are not actually bound by them. And comments made in judgments which do not form part of the actual decision (the ratio decidendi) are not binding either.

In particular, little has been made (yet) of CPR 44.3 (2) (a) – the important rule which implements Jackson’s suggestion that proportionality should trump necessity. If the Court of Appeal gave CPR 44.3(2)(a) teeth, the implications could be massive!

In a run of the mill money claim, can the proportionate costs, up to and including the trial, ever exceed the value of the claim (assuming that “value” is the amount reasonably pleaded)?

In a case where liability is not in issue, can the value of the claim (sums in issue) (amount reasonably pleaded) be anything other than the damages finally awarded by the Court or recovered?

What are the proportionate costs of a six-expert clinical negligence claim, with a value of £15,000.00 damages, which concludes at trial?

Does the new test of proportionality inhibit access to justice?

There seems to be a notion amongst some that, if liability is denied, the test of proportionality (whatever that means) is somehow disapplied. I’m unaware of any rule or case authority which confirms that point. I doubt that a denial of liability amounts to “conduct” under CPR 44.4 bearing in mind that, under the fixed costs rules for lower value personal injury claims, a denial of liability makes no difference to what costs are recoverable.

And what about value as per CPR 44.3(5)(a) – which requires that proportionate costs must bear a reasonable relationship to the sums in issue in the proceedings. What does that mean? There have been comments made by lower Court’s Judges (again, not forming binding precedent) indicating that, for purposes of CPR 44.3(5)(a) the sums in issue are those which the Claimant reasonably pleaded. Really? Under the fixed costs rules for lower value personal injury claims “value” is the amount of damages actually recovered, not the amount reasonably pleaded.

What about costs budgeting decisions? At costs management conferences Judges are required to set Budgets which are “proportionate”. Given that no body actually knows what proportionality means yet, how are they doing that? How, for example, are Judges at costs management conferences deciding whether the costs already incurred are disproportionate or not? When (or if) the Court of Appeal finally provides the much-awaited guidance about the new(ish) test of proportionality, what will happen if it transpires that, what procedural Judges thought they knew about proportionality, turns out to be wrong? Will all costs management orders be rendered meaningless?

Everything is still up in the air when it comes to proportionality of costs and it’s never been more important to instruct expert Costs Lawyers to deal with your costs work. If you think you have a potential problem in relation to proportionality, please get in touch with us at Partners in Costs.

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Ian Moxon – Costs Lawyer – Partners in Costs