XX & Anor v Young & Anor [2025] EWHC 2073 (SCCO) (04 August 2025) – When Proportionality Bites
The SCCO’s latest judgment in XX & Anor v Jordan Young & Aviva Insurance Ltd is an excellent practical judgment giving guidance on how to apply the test of proportionality in the context of to West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220, and Master Nagalingam reinforces that proportionality has teeth.
The claimant’s bill was assessed down from £517,000 to £339,565.16 and then, reflecting proportionality, to £324,029.77. Interestingly, the Court had given an early “indication” on proportionality to facilitate a settlement during the assessment. The Master was clear that the bill as drawn appeared to be disproportionate.
The Defendant’s proportionality argument hinged on (1) costs to damages and (2) conduct, and the Master applied West to examine the costs through the prism of CPR 44.3(5), and in doing so he laid out some superb practical guidance for practitioners.
The Judge’s Analysis
Judge Nagalingam approached proportionality through each factor under – offering a textbook example of how courts are applying this rule in practice.
- Sums in Issue
The Master found that it was clearly intended that the sums in issue in the proceedings was not the outcome value, rather it was best represented by a notional bracket of possible outcomes without descending into the improbable. Here a range was identified and the Master felt that, whilst the range was wide (£149,000 to £2.5m), the most likely value was closer to the bottom than the top. The Judge remarked:
“Had it been the intention of the rules for the sums in issue to be the settlement sum then the rules would be drafted as such… [but] the settlement sum may form the lower end of that bracket.”
- Complexity
While the claim, an RTA, involved multiple experts (orthopaedics, psychiatry, care, and accommodation) and extended over several years, Judge Nagalingam found that:
“It cannot be said that the litigation was complex but clearly it was not straightforward either.”
- Conduct
The Master was again very clear, it was an issue of conduct – not misconduct,
“It is simply a consideration of whether the paying party conducted their opposition in a manner which caused additional work to be done”
Here Defendant argued liability and decided not to make a good and early Pt 36 etc.,
“Until a Claimant is in receipt of a proposal to settle then there is little by way of reasonable criticism that may be raised where they continue with the litigation until a suitable offer is made”
- Vulnerability of the Claimant
This factor worked in the receiving party’s favour. The Judge acknowledged:
“The combination of isolation, injury recovery, the Claimant’s age, and language barriers meant that at times the receiving party solicitors were dealing with a vulnerable client.”
- Surveillance
Moving beyond 44.3(5) per West, surveillance evidence had been produced by the Defendant which appeared to suggest the Claimant had made a physical recovery which was better than that reported to examining experts, but the Master declined to be drawn into this.
“I rejected the assertion that on an assessment of costs I could retroactively conduct a trial of an issue that the Defendant had alleged but neglected to run to trial as an argument.”
This serves as a reminder that allegations of dishonesty must be dealt with in the substantive proceedings – not saved for detailed assessment.
The Master found that the costs appeared disproportionate in all circumstances.
Methodology
Applying West, the Master found that the Court should consider where the bill might be reduced further and if such further reductions would yield a proportionate figure, and one area of costs that invited further scrutiny flowed from internal communications.
This element of the bill has been reduced from £27,724.50 plus VAT down to £22,946.15 plus VAT, and the Master concluded that a further reduction ought to apply to this portion of costs such that the allowed £22,946.16 plus VAT was reduced to £10,000 plus VAT on a broad brush basis which allows for a reasonable amount of internal communication taking into account the facts and circumstances this case.
Practical Lessons
This is an excellent and practical guide to applying your mind to the proportionality test, the key takeaways being:
- Value is not the outcome. But beware your value, Courts are looking at the realistic value of claims, not speculative pleadings, when applying CPR 44.3(5).
- Complexity remains a high bar. Just because your case has issues that might mean it is not straight forward, does not necessarily mean it is complex.
- Conduct is not misconduct. Proportionality is a door that swings both ways and a paying party that decides to contest liability or not make early attempts to settle, cannot then complain when work is generated by these decisions.
- Proportionality is a shield against unreasonable costs, and it should be applied to those elements of costs that do not withstand scrutiny.
- Time recording must show purpose and necessity. Internal communications, while not inherently irrecoverable, are highly vulnerable to global cuts if poorly justified or excessive.
How PIC Can Help
XX v Young highlights a crucial reality for legal professionals, as even well-run litigation with a legitimate settlement can result in significant costs reductions if proportionality is not considered and work evidenced throughout. Recoverability isn’t just about work done – it’s about how that work is recorded, justified, and ultimately defended.
At PIC, we work alongside legal teams not just at the end of a case, but throughout, ensuring their approach to costs is both strategic and defensible.
We provide ongoing file support and risk management, helping identify where delegation, internal communications, or senior fee earner time might raise challenges on assessment; and tailored training and best practice guidance for fee earners and support staff, designed to ensure that time recording meets the standards expected by today’s Courts.
PIC brings the expertise needed to protect your position. In an environment where courts are willing to step back and ask, “is this reasonable overall?”, we help ensure the answer is yes.
Amna Aziz, Legal Costs Negotiator
28.08.25