We need to talk about proportionality

As a person with no great interest in football, but just enough to sit in front of the TV for a few weeks every couple of years to watch our national side go through the process of auditioning for a new manager, I’m well used to the idea that there are things hoped for and believed in but which ultimately prove illusory and unattainable. No harm though in telling myself that we might do it this time, and anyway it feels like a valid reason to insist that we’re turning SpongeBob off.

I was therefore at least psychically prepared for the decisions in BNM – v – MGN Limited [2016] EWHC B13 (Costs) and (1) Dr Brian May (2) Mrs Anita May – v - (1) Wavell Group Plc (2) Dr Bizarri (SCCO) 2016, for while in his implementation lectures Jackson LJ had explained that proportionate costs could be delivered through robust case management, where the costs wouldn’t be incurred because you wouldn’t have to do the work, that was, of course, just the pre-match build-up. Yes, I believed it at the time, lots of us did, he talked a good game. He’d been out on grand tours and seen it all in action, he knew what the problems were and had ideas about how to fix them.

Proportionality would be enshrined in the overriding objective, the equivalent of targeting funding at grassroots football; the rules were there to enable justice at proportionate cost, ‘at’ being the operative word. Proportionate expenditure was supposed to be something that was actually achievable.

If the decisions in BNM and May are indicative, however, that idea has been firmly kicked into touch.

Both decisions have garnered considerable interest in the legal press, and social media is a-twitter with outrage, so we need not dwell on the specifics here (and you have files to be working on; working on very, very efficiently).

The bottom line is that having spent, one assumes, considerable time making an assessment of ‘reasonable’ costs, the respective Masters then further reduced costs by something of the order of 50% or more to reflect their views on proportionality. Let me say that again; they assessed them, decided what was reasonable, and then halved it.

It would seem a leap too far to believe that the costs assessed as reasonable were so far removed from any semblance of what was actually necessary in the litigation, what needed to be done, that they could be halved and still reflect something that was actually attainable in practice.

Master Rowley is entirely straightforward in that regard, accepting that when you enter the extra-time of proportionality ‘the amount that can be recovered from the paying party is not the minimum sum necessary to bring or defend the case successfully’, that in many modest cases, what is recovered in inter partes costs may only be a ‘contribution’ to the costs incurred.

With the extra-time proportionality re-assessment, we’re in wildly unpredictable golden goal territory all over again.

What is apparent, is that the sums assessed as reasonable in these cases do not have any relevance to the sums ultimately allowed as proportionate, i.e. the sum allowed as proportionate is entirely divorced from the sum assessed as reasonable and has no relation to it. In BNM and May the ‘proportionate sums’ happen to be percentages in or around 50% of the reasonable costs, but that is coincidental; in these cases a proportionate amount is just a figure, which does not have as its starting point the costs actually incurred or assessed as reasonable.

If these decisions reflect an approach that is widely followed there are potentially far-reaching implications, not least for the types of tactics we may see brought to bear in defence or pursuit of litigation, but for now I’ll just ask one question; why bother assessing the bill?

Whilst I can see potential advantages and disadvantages from the perspective of the parties, as a matter of procedure it makes no sense.

The overriding objective includes saving expense, and it can’t be said to be in furtherance of that objective to have a procedure requiring the court to undertake a time consuming and expensive examination of the minutiae if that assessment will tell little, if at all, in the balance. It’s exactly the sort of thing the Jackson Review would have been critical of. Far better to have the penalty shoot-out at the start of the match and get it all over and done with…

Dominic Woodhouse