It’s a hard life for under pressure costs judges after proportionality ruling bites the dust

Rowley: Test misapplied

A circuit judge has more than doubled the amount that Queen guitarist Brian May can recover after he settled a private nuisance dispute, ruling that the costs judge at first instance had misapplied the new proportionality test.

His Honour Judge Dight, sitting with Master Whalan, found that Dr May and his wife, the actress Anita Dobson, should be awarded £75,000 in costs after they accepted £25,000 in settlement.

He stressed that the new proportionality test was not “a blunt instrument” a judge could use to make a substantial reduction in the reasonable costs and bring them down to a “rough and ready but proportionate amount”.

“The rules, difficult as they may be to apply in practice, require the specific factors in CPR 44.3(5) to be focused on and a determination to be made as to whether there is a reasonable relationship between them.

“I doubt that the rules committee intended that a costs judge could or should bypass an item-by-item assessment and simply impose what he or she believed to be a proportionate global figure.

“In my judgment, the tests of reasonableness and proportionality are intended to work together, each with their specified role, but with the intention of achieving what is fair having regard to the policy objectives.”

Master Rowley initially reduced the £208,000 costs bill to a shade under £100,000 on an item-by-item assessment, and then cut it to £35,000 on the basis of proportionality.

Dr May subsequently described the decision as a “mockery of justice”, arguing that “it’s likely to make it almost impossible for the man in the street to fight back for justice against the bullies who trample all over him”.

On appeal, the Mays did not challenge the item-by-item rulings but argued that Master Rowley misdirected himself and misapplied the post-2013 proportionality test.

HHJ Dight agreed. “In particular, [Master Rowley] undervalued the sums in dispute, by a considerable margin in county court litigation, and he gave too little weight to the complexity of the litigation. Further, he reduced the costs disproportionately because of early settlement.”

The judge noted that there was “very limited authoritative guidance” on interpreting or applying the test, and “such that there is does not all appear to lead in the same direction”.

“In my view, the new rules intended a fresh start. It seems to me that one has to go back to the wording of sub-rule 44.3(5) and reach a judgment as to the amount of costs whose relationship with all the factors identified in that sub-rule is a reasonable one.

“Whether the relationship is reasonable is, in my view, a matter of judgment, rather than discretion, and, as I have said above, requires a costs judge to attribute weight, and sometimes no weight, to each of the factors (a) to (e).

“Further, it seems to me that the word proportionate is intended to have a consistent interpretation across rule 44.3(2), rule 44.3(5) and 44.4, which means that in considering proportionality, the court is to have regard to all the circumstances (see CPR 44.4) which includes, but is not limited to, the further factors specified in CPR 44.4(3) even though they are not specifically referred to in CPR 44.3.

“There is a considerable degree of overlap but the plain intention is that there should be a holistic approach; the costs judge is intended to stand back and look at the overall picture.”

HHJ Dight added that whether the relationship between the costs and the relevant factors was reasonable required “an objective assessment and an objective balance to be undertaken in respect of them with a view to achieving the policy objectives of compensating the receiving party for his expenditure but not requiring the paying party to pay more than the litigation warranted”.

But he doubted that the proper interpretation of the rules entitled a costs judge at the end of an item-by-item assessment to impose a very substantial reduction on the overall figure without regard to the component parts.

“I reiterate that what the rules require the judgment to achieve is a balance, a reasonable relation, a correlation which may necessitate a certain amount of fine tuning.

“There may be a limited range of acceptable difference in the total figure once the rules have been applied, in that different judges could legitimately come to slightly different conclusions as to the proportionate sum, and so long as they have applied the rules correctly they should not be open to challenge on appeal.

“However, the final figure in this case does not appear to be based on any specific mathematical calculation nor is there a specific explanation of how the weighting of the various factors resulted in the final figure.”

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