The Court was tasked with determining costs following a hard fought piece of commercial litigation in which the claimant was awarded US$5,388,312.08 of a US$63.5 million claim. Mrs Justice O’Farrell considered the various authorities and relevant principles to be applied when determining whether to make an issues based or proportional costs order before determining that the defendant should pay 85% of the claimant’s costs.
The long awaited and much anticipated judgment in these appeals has been handed down.
The appeals raised a number of specific issues arising out of the respondent’s successful challenge on an assessment of the claimant’s costs to the amount of the ATE insurance premium recoverable by the appellants.
They also raised a number of wider points relating to reasonableness and proportionality and the proper approach to the assessment of costs.
In April 2013 the “old” proportionality test in the then CPR 44.4(2) was replaced by the “new” proportionality test in CPR 44.3(5). The essential difference being that necessity no longer trumps proportionality. There remain a few cases still being dealt with under the “old” rule. This was one of them. It was an appeal against decisions made by the Senior Costs Judge, Master Gordon-Saker in the course of a detailed assessment, including that the base fees, viewed globally, were not disproportionate.
It’s been six years since the introduction of the “new” proportionality rule in CPR 44.3(5). In that time there have been a handful of decisions at circuit judge level but none from the higher courts, until now. On appeal from Master Whalan in the Senior Courts Costs Office, The Hon. Mr Justice Marcus Smith was tasked with determining a number of issues arising from the detailed assessment of costs including the correct approach to proportionality. Unfortunately, but not surprisingly, the decision does not offer much in the way of general guidance.
Following his more widely reported decision on CPR 3.18(b) HHJ Dight declined to interfere with the Master’s ruling on proportionality where he reduced the claimant’s assessed costs from £52,000 to £40,000. The paying party appealed on grounds that the Master did not go far enough. She was unsuccessful.