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Proportionality – broad-brush approach?

When looking at ‘proportionality’ of costs, should the judge adopt a rigid mathematical approach to each item, or is a broad-brush approach to be preferred?

The starting point is May [2017], when a circuit judge disagreed with the view of a costs judge in the Senior Courts Costs Office that the proportionality test could be used as a ‘blunt instrument’ (so enabling a substantial reduction in ‘reasonable costs’ to bring them down to a rough and ready proportionate amount). Moreover, the costs judge was wrong not to base his figure on any ‘specific mathematical calculation’. In short, this decision found firmly in favour of a formalised approach.

We now have another county court decision which takes the contrary view. In this case, base costs were reduced by about 35% for proportionality (from £115,000 to £75,000), with the judge deciding that:

 

  • The court should look at ‘reasonableness’ first, and then ‘proportionality’. When looking at ‘proportionality’, the court can look at several elements of the overall bill, or alternatively look at the provisional total as an overall figure.
  • The court is not required to assign each factor a precise numerical weighting, score it, or perform any other kind of mathematical calculation. CPR 44.3 gives the costs judge a discretion, the only requirement for which is that it be exercised judicially, by reference to clear reasoning. Thus, there should not be a rigid approach to factors like the amounts in issue or the complexity.

 

This is a much more flexible approach than that in May [2017]. It is also a very carefully considered and well-structured judgment. The message that emerges seems to be that you cannot get certainty in advance on what will be ‘proportionate’. Given the nature of the court’s discretion, there is bound to be an element of uncertainty. Accordingly, clients should be warned that ‘proportionality’ is considered at every stage of the proceedings, but at the end of the day the judge will have a wide discretion. Reynolds v One Stop (unreported, 21 September 2018, Norwich and Cambridge County Court). Source: Hardwicke Chambers.

 

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