Practico Blog: Proportionality and the Sword

Proportionality and the sword

As most litigators will appreciate, the status of the new proportionality test has been a bit of a conundrum over the past number of years given the paucity of judgments on the subject. During the ‘inter proportionality period’ Points of Dispute and Replies were filled with references to judgments from every court, save from the court at the coal face, the SCCO. Then along came Master Rowley’s decision in May v Wavell - cue the sharp intakes of breath.

Phrases such as “There is only so much finesse that can be employed when using a broadsword rather than a rapier” were highlighted from the judgment to justify the slashing of costs. In Dr May’s case, from £208,000 in round figures to £35,000 (plus VAT). The prophesised new dawn had arrived, and no offenders of proportionality were to be spared the broadsword. Or so we thought …

The Judgment

Master Rowley’s decision was successfully appealed to the County Court and we now have a seemingly more neutral decision by HHJ Dight CDE. In his judgment HHJ Dight CDE disagreed with Master Rowley that the new proportionality test was a blunt instrument which could be wielded to justify substantial reductions to the reasonable costs to make them proportionate. He also criticised Master Rowley because his “final figure in this case does not appear to be based on any specific mathematical calculation”.

HHJ Dight CDE’s sharper alternative approach homed in on the factors under CPR 44.3 (5), which he said would help determine a proportionate amount for the costs claimed. He went on to consider those factors and the different weights that had to be applied. HHJ Dight CDE concluded that a proportionate figure was £75,000 (plus VAT).

In the light of HHJ Dight CDE’s criticism of Master Rowley, there must have been a precise, rapier like, calculation to illustrate how the proportionate figure for costs was reached. You would have thought so … but no. Although the reduction was not as severe as Master Rowley’s reduction, the method for calculating the final figure was just as opaque as Master Rowley’s had been.

What Lessons can be Learned?

Firstly, the County Court judgment confirms that the factors under CPR 44.3 (5) are still key and that different weights must be afforded to the different factors when looking for the proportionate figure. Besides that, there is nothing significant of note other than that a Costs Judge’s discretion remains a significant factor in every decision about costs.

We are now waiting for the Court of Appeal to add its two pennies’ worth. Will it favour the broadsword or the rapier? To my mind, a working level of certainty is more important than the approach – in the end it’s all about the money, and clients and lawyers on both sides want more precise advice about recovery levels. They will only get that with some crystal-clear guidance from the Court of Appeal.

Watch this space.