PROPORTIONALITY: WE WILL, WE WILL ROCK YOU
I am grateful to Jon Lord for sending me a copy of the decision of Master Rowley in Dr Brian May -v- Wavell Group Plc given today (16/06/2016). It is another case that centres on proportionality. There was a considerable reduction of the costs assessed on the “item by item” basis because the overall figure was disproportional.
“In cases such as this, it seems to me that the new test of proportionality … will require legal representatives to inform their clients that, even if successful, they will receive no more that a contribution to the costs that will be incurred. It may be that such advice proves to be a driver for the costs to be reduced or for alternative dispute resolution mechanisms to be explored. It is to be hoped that cases such as this one, which are in a transitional phase of understanding the new proportionality test, will be relatively rare.”
The claimants brought an action in private nuisance. Proceedings were issued and the claimants accepted the first offer of £25,000. The claimants were automatically entitled to their costs.
The bill of costs came to £208,236.54. All the work was done post 1 April 2013 and subject to the test of proportionality.
After an assessment of the costs on an item by item basis on assessment the reasonable costs came to £99,655.74.
The claimants instructed leading counsel directly. The Master accepted that this was a relatively new way of conducting litigation. The reasonableness of costs did not depend on the means of representation. However this was mentioned to provide the reasoning for the significant level of reduction on assessment.
The judgment contains a detailed examination of the principles relating to proportionality. The Master found:
- The sum accepted (£25,000) reflected the sums in issue.
- There was a possibility of an injunction and that issue had to be weighed in the balance.
- The case was neither legally nor factually complicated.
- There was nothing in the defendant’s conduct which caused additional works to be generated.
- There were no wider factors which were relevant to the issue of proportionality. (The fact that the claimants were public figures was not a relevant factor in this case).
THE RESULT THE COSTS REDUCED TO £35,000
The Master reduced the recoverable costs to £35,000 plus VAT. The case was at an early stage when it settled. The proportionate amount of costs is inevitably smaller for a case that settles early than one that reaches a final hearing.
RELATED POSTS: PROPORTIONALITY
- Budgets, proportionality & disclosure
- Proportionality, assessment and the costs of budgeting
- Proportionality, bundles & £3 million spent on costs.
- More on summary assessment of costs and proportionality.
- A working example of proportionality in practice.
- Rigorous costs budgeting to ensure proportionality.
- Enterprise, Proportionality, witness statements & unnecessary costs.
- Proportionality and survival for litigators Part 1
- Proportionality and survival for litigators Part 2.
- Proportionality and survival for litigators 3
- Costs, proportionality and getting the budgets right.
- Costs, parties & Proportionality
- An assessment of costs bites the dust.
- Proportionality and costs: it applies to big cases as well.
- What is meant by proportionality?
- Costs budgeting & proportionality when there is £16 million at stake.