"THAT PROPORTIONALITY JUDGMENT": 10 KEY POINTS

The post yesterday on the decision of Master Gordon-Saker in BNM -v-MGN Limited [2016] EWHC B13 (Costs) set out the case in some detail.  Here are the key points of that decision.

KEY POINTS

• On an assessment of costs on the standard basis proportionality should prevail over reasonableness.
• The court should first make an assessment of reasonable costs.
• The court should then stand back and consider whether the total figure is proportionate.
• If the total figure is not proportionate the court should make an appropriate reduction.
• The test of proportionality applies to additional liabilities which remain recoverable after 1st April 2013.
• A consequence of the reduction of the base costs to a proportionate figure will be that the success fee, a percentage of the base costs, also reduced.
• When applying the new test of proportionality the court need not consider the amount of any additional liability separately from the base costs.
• It was not intended that the costs should never exceed the sums in issue. The rules do not state that.
• There will be cases in which the costs bear a reasonable relationship to the sums in issue even though they exceed those costs.
• If an insurance premium is reduced on the grounds that it is disproportionate the court should identify the figure allowed.

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