Kerry Underwood

PROPORTIONALITY: THE EMPEROR’S NEW CLOTHES  

with 3 comments


This blog has been fully updated to 23 June 2016.

 

Section 4 of the Distress Act 1267, still in force, provides:-

“Moreover, Distress shall be reasonable, and not too great”

which shows that 749 years ago no one could define proportionality. That remains the case.

LJ Jackson, speaking on 23 May 2016, recognized this and referring to the factors in CPR 44.3(5) – set out below – said:-

“The best way to satisfy the requests for clarification is to convert the five identified factors into hard figures: in other words, to create a fixed costs regime… those seeking certainty about how rule 44.3 (5) will apply are “seeking something akin to a fixed fee regime for all cases.”

He proposed that for each financial level of claim – £25,000.00 to £50,000.00, £50,000.00 to £100,000.00 etc. a figure that is deemed to be proportionate be determined and that that figure then be adjusted to take into account factors (c), (d) and (e), for example by specifying a percentage uplift.

On 13 April 2016 the Queen’s Bench Division of the High Court in the seminal Contingency Fee Agreement case of

Bolt Burdon Solicitors v Tariq & Others [2016] EWHC 811 (QB)

made the point that Contingency Fee Agreements protect clients more than Conditional Fee Agreements:-

“This is because in a conditional fee agreement costs are always tied to the work done, whereas in a contingency fee agreement costs are always proportionate to recovery.”

The existing Fixed Recoverable Costs Scheme, with its combination of a core fee and a damages-based percentage fee is in part a recoverable contingency fee scheme.

Until we have contingency fees and/or fixed fees in all cases we have a problem.

That problem is that no one has ever defined what “proportionate” means. As Master Haworth said:-

“What is a “reasonable relationship”?  A set percentage of damages?  If not, why not? Even if you can compare costs with damages, how do you compare them with complexity or importance?”

He described it as “arbitrary and subjective.”

Professor Dominic Regan has called the test “an utter mystery” and said that it is something “which no one, but no one comprehends.”

So what is this test?

Before April 2013 it was whether costs had been reasonably or necessarily incurred and this is often known as the Lownds Test after the case of

Lownds v Home Office [2002] EWCA Civ 365

That test still applies to all work done on cases issued before 1 April 2013 and in all other cases to work done before that date.

For all cases not issued by 1 April 2013, all work done since then is subject to the new test of proportionality contained in CPR 44.3, which provides that the court will only allow costs which are proportionate to the matters in issue and costs which are disproportionate may be disallowed or reduced even if reasonably or necessarily incurred. (CPR 44.3(2) (a)).

Any doubts must be resolved in favour of the paying party (CPR 44.3 (2) (b)).

Proportionality relates only to recoverable costs and not to solicitor and own client costs (CPR 44.3(6)).

Costs are proportionate if they bear a reasonable relationship to:-

  • the sums in issue in the proceedings;

 

  • the value of any non-monetary relief in issue in the proceedings;

 

  • the complexity of the litigation;

 

  • any additional work generated by the conduct of the paying party; and

 

  • any wider factors involved in the proceedings, such as reputation or public importance. (CPR 44.3(5)).

 

Although Lord Justice Jackson is now proposing that fixed costs is the answer the new rule, which everyone agrees that no one understands, is in fact his doing and follows this recommendation in his report:-

“I propose that in an assessment of costs on the standard basis, proportionality should prevail over reasonableness and the proportionality test should be applied on the global basis. The court should first make an assessment of reasonable costs, having regard to the individual items in the bill, the time reasonably spent on those items and the other factors listed in CPR 44.5(3). 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 courts often conflate and confuse proportionality and reasonableness. An example is

Kazakhstan Kagazy plc v Zhunus [2015] EWHC 404 (Comm)

where, in a short judgment, a High Court Judge ran the terms together on nine occasions.

Other cases where this happened include

Various Claimants v Sir Robert McAlpine [2015] EWHC 3543

CIP Properties (AIPT) Ltd v Galliford Try Infrastructure Ltd [2015] EWHC 481 (TCC) and

Savoye & Savoye Ltd v Spicers Ltd [2015] EWHC 33 (TCC)

One judge who got it right was Master O’Hare in

Hobbs v Guy’s & St Thomas’ NHS Foundation Trust [2015] EWHC B20 (Costs)

He reduced the bill by two thirds without any reference to proportionality. That reduction was made on the ground of reasonableness and would have been made under the old law and the Lownds Test.

The Master then looked at the remaining one third and decided that even that greatly reduced sum was disproportionate.

Thus the Master, having determined what was a reasonable amount, reasonably and necessarily incurred, had to cut further.

What he did is telling. A Grade A fee earner had actually done the work but the Master found that it should have been done by a Grade B fee earner and that that was reasonable and necessary but then allowed only the rate for a Grade C fee earner, on the ground of proportionality.

 

Thus the Master held that proportionality required the work to be done by someone not capable of doing it, or rather not of such seniority as to be likely to do the work properly.

He specifically stated that the amount required to run the case proficiently was the amount he had allowed prior to the proportionality reduction, and thus the amount that he allowed was not sufficient to run the case proficiently.

True proportionality can only be achieved by contingency fees, whether payable only by one’s own client, or by the losing party, or a mixture of both.

The New Rule

CPR 44.3 reads:

(1)       Where the court is to assess the amount of costs (whether by summary or detailed assessment) it will assess those costs –

(a)       on the standard basis; or

(b)       on the indemnity basis,

but the court will not in either case allow costs which have been unreasonably incurred or are unreasonable in amount.

(Rule 44.5 sets out how the court decides the amount of costs payable under a contract.)

(2)       Where the amount of costs is to be assessed on the standard basis, the court will –

(a)       only allow costs which are proportionate to the matters in issue. Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred; and

(b)       resolve any doubt which it may have as to whether costs were reasonably and proportionately incurred or were reasonable and proportionate in amount in favour of the paying party.

(Factors which the court may take into account are set out in rule 44.4.)

(3)       Where the amount of costs is to be assessed on the indemnity basis, the court will resolve any doubt which it may have as to whether costs were reasonably incurred or were reasonable in amount in favour of the receiving party.

(4)       Where –

(a)       the court makes an order about costs without indicating the basis on which the costs are to be assessed; or

(b)       the court makes an order for costs to be assessed on a basis other than the standard basis or the indemnity basis,

the costs will be assessed on the standard basis.

(5)       Costs incurred are proportionate if they bear a reasonable relationship to –

(a)       the sums in issue in the proceedings;

(b)       the value of any non-monetary relief in issue in the proceedings

(c)       the complexity of the litigation;

(d)       any additional work generated by the conduct of the paying party; and

(e)       any wider factors involved in the proceedings, such as reputation or public importance.

(6)       Where the amount of a solicitor’s remuneration in respect of non-contentious business is regulated by any general orders made under the Solicitors Act 19744, the amount of the costs to be allowed in respect of any such business which falls to be assessed by the court will be decided in accordance with those general orders rather than this rule and rule 44.4.

(7)       Paragraphs (2)(a) and (5) do not apply in relation to –

(a)       cases commenced before 1st April 2013; or

(b)       costs incurred in respect of work done before 1st April 2013,

and in relation to such cases or costs, rule 44.4.(2)(a) as it was in force immediately before 1st April 2013 will apply instead.

 

Thus it is assumed that Lord Justice Jackson’s approach will apply:

I propose that in an assessment of costs on the standard basis, proportionality should prevail over reasonableness and the proportionality test should be applied on a global basis. The court should first make an assessment of reasonable costs, having regard to the individual items in the bill, the time reasonably spent on those items and the other factors listed in CPR 44.5(3). 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.

However the definitions in CPR 44.3(5) are not straightforward. Take ‘the complexity of the litigation’. Fine – but what figure is to be put on this? A 50% uplift? Or a line by line examination of the work done due to ‘complexity’ which takes one back to the Lownds test?

Likewise ‘any additional work generated by the conduct of the paying party’. Is that any work, such as denying liability or obtaining their own expert’s report? Or is it only to be misconduct that triggers extra fees?

Lord Neuberger summarized the aim of the new test as:

effectively reversing the approach taken in Lownds. In this way, as Sir Rupert said, disproportionate costs, whether necessarily or reasonably incurred, should not be recoverable from the paying party. To put the point quite simply: necessity does not render costs proportionate.

Lord Neuberger went on to say:

As such it seems likely that, as the courts develop the law, the approach will be as Sir Rupert described it:

….in an assessment of costs on the standard basis, proportionality should prevail over reasonableness and the proportionality test should be applied on a global basis. The court should first make an assessment of reasonable costs, having regard to the individual items in the bill, the time reasonably spent on those items and the other factors listed in CPR rule 44.5(3). 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.

He added:

It would be positively dangerous for me to seek to give any sort of specific or detailed guidance in a lecture before the new rule has come into force and been applied. Any question relating to proportionality and any question relating to costs is each very case-sensitive, and when the two questions come together, that is all the more true. The law on proportionate costs will have to be developed on a case by case basis. This may mean a degree of satellite litigation while the courts work out the law, but we should be ready for that, and I hope it will involve relatively few cases.

Surely the whole point of proportionality is to give a broad-brush approach as to what is a proportionate level of costs to incur to recover, say, £25,000, or £50,000 or whatever.

True it is that no two cases are the same, but most litigation is routine and involves predictable factors. Most litigation is not test litigation and does not involve any wider factors, such as reputation or public importance.

If each case must be considered on its merits, then inevitably the courts will be looking at what work was it necessary and what work was it reasonable to carry out, but this is of course what is supposed to be forbidden under the new rule, as it is simply a return to Lownds. Indeed everything comes back to Lownds, maybe because it was a well-thought out judgment which addressed all of the issues and dealt with them. Why re-invent the wheel?

Unless specific, detailed advice is given, then what is the point of proportionality? Why should the country’s most senior judge not say:

I have spoken with my judicial colleagues and reviewed the evidence and unless factors (d) and/or (e) apply I would expect a party never to recover more in costs than a sum equal to 40% of damages in a personal injury claim, 20% in a commercial claim……

etc, etc.

As Simon Gibbs has said:

Indeed, it is difficult to see why the answer to the issue of what is a proportionate level of costs to recover £25,000 should normally vary from case to case. And

I have yet to meet a costs practitioner who believes that the new proportionality test is workable. More worryingly, I have yet to meet a costs judge who is able to explain by what margin, if any, a Bill of Costs in relation to routine litigation that has been assessed at £75,000 applying the reasonableness test should then be reduced down to if the amount in dispute was only £25,000.

True proportionality is achieved by fixed costs, or capped costs and of course contingency fees are the purest form of proportionality.

Absent fixed or capped costs no jurisdiction has ever succeeded in developing a consistent judicial approach to proportionality. That is unsurprising as it is an entirely meaningless word in a financial context when not applied as a strict mathematical formula.

Proportionality = The Emperor’s New Clothes, which is why no court has ever applied it.

It is the costs equivalent of having the Ogden Tables without any of the figures filled in, or a crossword where the setter has not thought out the answers.

Now, Lord Neuberger is an outstanding judge.

I believe that he knows that the piecemeal implementation of what was in any event a deeply flawed report is likely to be a disaster, and that he is laying the ground for what may turn out to be massive judicial intervention to prevent the civil justice system falling into chaos.

Predictions of ‘satellite litigation’ and ‘a period of slight uncertainty’ by the judiciary about a change in the law are hardly statements of judicial approval.

 

Specialist costs counsel Andrew Hogan, commenting on the model now adopted said:

The notion of a “long stop” discount test of proportionality, is a recipe for satellite litigation, as it will introduce chronic uncertainty into the assessment of costs, both in terms of when such a deduction will be applied and in terms of what the quantum of deduction might be. Perhaps, more significantly, it is even more disappointing that even now, some 15 years after Lord Woolf “borrowed” the concept of principle of proportionality from European Union law, it remains a nebulous and uncertain concept, hard to define and even harder to apply, which is conceptually very odd, when one considers that the stated aim of Jackson was to reduce perceived disproportionate costs to a proportionate level. If you can’t define proportionality, how can you judge whether you have succeeded or not in moving from a disproportionate model of costs to a proportionate one?

Master Haworth of the Senior Court Costs Office, speaking at the LexisNexis Costs and Litigation Funding Forum on 31 October 2012, said that the new rule on proportionality was vulnerable to court challenge:

It’s going to be left to decisions up and down the country to determine what is proportionate

which of course utterly defeats the point of proportionality.

In a recent webinar the legendary Judge Michael Cook, from whom I have learnt an enormous amount about all sorts of things, not all connected with costs, had this to say:

“What is proportionality” is a conundrum the courts are still trying to solve. There are two problems with proportionality. First, no one knows what it means and second, where does it stand in relation to necessary costs and reasonable costs? Sir Rupert once told me that proportionality had caused him more problems than any other aspect of costs and then invited me to address a judicial conference on it!

At a meeting of costs experts five different definitions were debated without reaching any conclusion. Is it proportionate for the recoverable costs to exceed the amount in dispute? If so when? And there is the more fundamental question of whether it is proportionate for a lawyer to earn more than a dustman but less than Wayne Rooney. What standard of living can a lawyer expect the costs of litigation to fund? Should he or she drive a Rolls Royce or a Lada and travel first or second class by train at other people’s expense? A practical ‘seat of the pants’ aid to considering proportionality is to look at the costs incurred by the paying party. What, for example, was their level of fee earner, charging rate, seniority of counsel and the amount of time spent? If the paying party has increased the stakes by using a senior partner, leading counsel and a fashionable expert, is it disproportionate for the receiving party to have done likewise? Is the pot calling the kettle black? And then we have what Sir Rupert described as Professor Zuckerman’s ‘pithy summary’ of proportionality: ‘The aim of the proportionality test is to maintain a sensible correlation between costs, on the one hand, and the value of the case, its complexity and importance on the other hand’. My own view is that the definition in CPR 44.3 (5) is as good as we are going to get – and it is not very good!

Sub paragraph (7) emphasizes that proportionality trumps necessity and reasonableness and gives a timetable. The rule expressly states that even costs which were necessarily and reasonably incurred may fall foul of the test of proportionality. The distinction between necessary and reasonable is now so blurred it serves only to confuse and ‘necessary’’ should once again be struck from the costs lexicon. Proportionality should prevail over reasonableness with the test of reasonableness only being applied to individual items once it has been established that the total costs are proportionate. But there is trouble ahead – satellite litigation looms. The requirement that costs should bear ‘a reasonable relationship’ to the factors specified in sub-rule (5) should keep the courts occupied for the foreseeable future.

Transitional, revised transitional, varied revised uncertain transitional and provisions announced even when there was no intention of ever bringing them in

 

When the new costs rules were first published the relevant transitional provision concerning the new proportionality test read:

Paragraphs (2)(a) and (5) do not apply in relation to cases commenced before 1 April 2013 and in relation to such cases, rule 44.4(2)(a) as it was in force immediately before 1 April 2013 will apply instead.

This caused two problems. Firstly, the phrase ‘cases commenced’ was ambiguous. Secondly, it appeared to be retrospective, meaning that the new test would apply in some cases to work already undertaken. This problem was, partly, recognised and Richard LJ said that the rule committee ‘acknowledged the force’ of the argument and was to insert a further transitional provision within rule 44.3:

to the effect that costs incurred in respect of work done before 1 April 2013 will not be disallowed if they would have been allowed under the rules in force immediately before that date.

Simon Gibbs comments:

What makes this truly shocking is that the letter confirming these changes from Lord Stephen Richards, who chairs the rules committee, records the fact that the committee was aware of this problem and agreed to make this change at the meeting on 8 February 2013 which approved the rules that were then released on 12/13 February. However, when releasing the Statutory Instrument there was no mention that they had already decided to change this in at least one crucial aspect. How are practitioners meant to prepare for the changes and train staff when, ludicrously late in the day as the rules have been published, we can’t even trust the accuracy of what has been released?

That would have meant all work done pre-April 2013 would be subject to the old test and any work done post-April 2013 subject to the new test. We now have the Civil Procedure (Amendment No 2) Rules 2013 to deal with this. However, it does something totally different again:

Paragraphs (2)(a) and (5) do not apply in relation to—

(a)       cases commenced before 1st April 2013; or

(b)       costs incurred in respect of work done before 1st April 2013,

and in relation to such cases or costs, rule 44.4.(2)(a) as it was in force immediately before 1st April 2013 will apply instead.”

Nevertheless, from the context I am treating ‘cases commenced’ as meaning ‘cases where proceedings have been issued’ (how hard would it have been to use that wording?). This old proportionality test will apply to all work done for cases where proceedings were issued before 1 April 2013.

The following variations therefore apply:

  • All work done pre-1 April 2013 – Old proportionality test applied to all work.
  • All work done post-1 April 2013 – New proportionality test applied to all work.
  • Work done pre and post-1 April 2013. Proceedings not issued – Old proportionality test applied to work done pre-1 April 2013. New proportionality test applied to work done post-1 April 2013.
  • Work done pre and post-1 April 2013. Proceedings issued pre-1 April 2013 – Old proportionality test applied to all work.
  • Work done pre and post-1 April 2013. Proceedings issued post-1 April 2013 – Old proportionality test applied to work done pre-1 April 2013. New proportionality test applied to work done post-1 April 2013.

Speaking on 5 February 2013 Master Haworth thought that the issue of proportionality may not arise much in practice as where a costs management order has been made there will be little to argue about on assessment. Costs within budget will be deemed proportionate and it is unlikely that the Costs Judge will re-visit the issue. Indeed, there is a clear tension between the cost process and proportionality. The cost management process implies that once the court has decided that certain steps in litigation are reasonable, then the full cost of undertaking that work will be recoverable, as the judge dealing with assessment will not normally depart from the approved budget. The new proportionality test means that on detailed assessment a judge may decide that even though a step within the litigation was reasonable, the full cost may not be recovered once the global basis test is applied. Mr Justice Ramsey said:

First, the court will have to apply the new proportionality test to the costs budget. As stated in the Final Report, the judge carrying out costs management will not only scrutinise the reasonableness of each party’s budget, but also stand back and consider whether the total sums on each side are “proportionate” in accordance with the new definition. If the total figures are not proportionate, then the judge will only approve budget figures for each party which are proportionate. Thereafter if the parties choose to press on and incur costs in excess of the budget, they will be litigating in part at their own expense. It will be important for the judges to apply the test consistently and for parties and their lawyers to be aware of the impact on recoverable costs.

As Simon Gibbs points out, that simply shifts the problem back to the judge making the costs management order; it does not solve the problem or answer the questions raised above, and it begs the question as to what is the point of expensive and time-consuming costs management and detailed assessment hearings to determine what costs are reasonable if, at the end of the day, the judge can then knock the figure down further on an apparently arbitrary basis. Both Mr Justice Ramsey and Master Haworth were speaking before the Commercial Court, Mercantile Court, Technology and Construction Court and the Chancery Division opted out of costs management, which leaves rather a lot of big unmanaged bills for detailed assessment with proportionality to be considered. There is also the interplay between provisional assessment and proportionality. It appears that, rather than undertake the arithmetic on a provisionally assessed bill, Judges are simply to send the annotated Points of Dispute/Replies back to the parties to work out the final figure allowed. Practice Direction 14.4(2) provides:

Once the provisional assessment has been carried out the court will return Precedent G (the points of dispute and any reply) with the court’s decisions noted upon it. Within 14 days of receipt of Precedent G the parties must agree the total sum due to the receiving party on the basis of the court’s decisions. If the parties are unable to agree the arithmetic, they must refer the dispute back to the court for a decision on the basis of written submissions.

Simon Gibbs again:

How does this tie in with the new proportionality test? If, at the end of the provisional assessment, the judge does not know the figure he has allowed (because he has not done the calculations) how does he know whether to apply a further discount to make the costs “proportionate”? The new rules do not envisage any procedure for the parties to return to the court after they have agreed the “total sum due” to ask the court to make a further “proportionality adjustment if appropriate. There has been a staggering failure to think through the practicalities of how the new provisional assessment process will work.

Well, that applies to almost all of the Jackson Reforms. Thus we wait to see if this reform will be any more successful than The Recovery of Damages and Costs Act 1278 or the Commands in Delay of Justice Act 1328 and all of the subsequent attempts at establishing proportionality.

 

Speaking at an SJLive event on 25 February 2015 Master Peter Haworth of the SCCO said that there had been no guidance on proportionality and that the new “standing back” test is “arbitrary and subjective”.

 

Since 1 April 2013 the overriding objective of the Civil Procedure Rules enables the court to deal with cases justly “and at proportionate cost” (CPR 1.1).

 

This proportionality test is contained in CPR 44.3, but does not apply to work undertaken before that date, nor to any work, pre or post 1 April 2013, where proceedings were issued before 1 April 2013. Thus the pre 1 April 2013 rule is becoming of less importance and will wither on the vine.

 

CPR 44.3(7)

 

“(7)        Paragraphs (2)(a) and (5) do not apply in relation to cases commenced before 1 April 2013 and in relation to such cases, rule 44.4(2)(a) as it was in force immediately before 1 April 2013 will apply instead.”

 

Proportionality also finds its way in to the new CPR 3.9 which deals with applications for relief from sanctions, where the application has been made since 1 April 2013, whatever the date of the breach.

CPR 3.9(1):

“On an application for relief from any sanction imposed for a failure to comply with any rule, practice directions or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need –

 

(a)    for litigation to be conducted efficiently and at proportionate cost; and

(b)   to enforce compliance with rules, practice directions and orders.”

 

Master Haworth of the Senior Courts Costs Office, speaking in July 2014, has said that the new rule will be “a difficult test” until a higher authority rules on the issue, and noted that “uncertainty is the enemy of costs saving and encourages satellite litigation”.

Master Haworth asked a number of questions:

“What is a “reasonable relationship”?  A set percentage of damages?  If not, why not?

Even if you can compare costs with damages, how do you compare them with complexity or importance?  What about the financial position of each party? Under the old test, that used to be relevant”.

“Why, as a matter of principle, if costs are necessarily incurred to achieve justice for a wronged person, shouldn’t the wrongdoer pay them?  Is the new proportionality test a charter for the tortfeasor/wrongdoer?  The new test is arbitrary: almost totally in the eye of the assessor.  It is a subjective as opposed to an objective test”.

Master Haworth added that he liked Dominic Regan’s comment that “the new proportionality test is an utter mystery, as Sir Rupert frankly admitted in his essay in the October 2013 introduction to the White Book Supplement.  We have only just started on what looks like an arduous and lengthy journey”.

PROPORTIONALITY: COURT HALVES COSTS

In BNM v MGN Ltd [2016] EWHC B13 (Costs) 3 June 2016

Master Gordon-Saker dealt with the issue of proportionality in a breach of privacy case where damages of £20,000.00 had been awarded and an undertaking given not to use or disclose confidential information illegally obtained by Mirror Group Newspapers from her mobile phone, which had been lost or stolen.

The claimant was a primary school teacher with no public or media profile who had a relationship with a successful premiership footballer.

The facts could hardly have been more damning for Mirror Group Newspapers and clearly the case was about  more than the relatively low sum of damages awarded.

The costs claimed, including a recoverable success fee for both solicitor and counsel and a recoverable After-the-Event insurance premium, were £241,817.00.

Half a day was taken up with the Mirror’s argument, which it lost, that the recoverability of additional liabilities was incompatible with its right to freedom of expression under Article 10 of the European Convention on Human Rights.

The Master conducted a line by line Detailed Assessment and produced the following figures:-

 

 

Base profit costs £46,321
Base Counsel’s fees £14,687.50
Court fees £1,310
Base costs of drawing the bill £4,530
Atkins Thomson’s success fee £16,780.83
Counsel’s success fee £4,846.88
ATE premium £61,480
VAT £17,433.24
Total base costs £62,318.50
Total costs £167,389.45

 

The defendant, the paying party, argued that these costs, held by the court to be reasonable, were disproportionate and should be reduced further.

The court did just that and  halved the costs and arrived at proportionate figures as follows:-

Base profit costs £24,000
Base Counsel’s fees £7,300
Court fees £1,310
Base costs of drawing the bill £2,250
Atkins Thomson’s success fee £7,920
Counsel’s success fee £2,409
ATE premium £30,000
VAT £8,775.80
Total costs £83,964.80

 

The Master then set out the current law and the pre-April 2013 law and the key cases.
The Master said:-

“It is clear that the new test of proportionality was intended to bring about a real change in the assessment of costs.” (Paragraph 20)

Here the court said that there were three issues in this case:-

  • Does the new test of proportionality apply to additional liabilities?
  • If it does should it be applied to additional liabilities separately, rather than by the global basis, that is looking at the whole bill?
  • Were the costs in this case allowed on a line by line Detailed Assessment disproportionate?

The court set out at length the changes to the Civil Procedure Rules which occurred in April 2013 both in relation to additional liabilities and proportionality.

This was a post March 2013 Conditional Fee Agreement but in breach of privacy claims recoverability remained, and indeed still remains and so the point is an important one.

Here the court held that the new test of proportionality does indeed apply to additional liabilities and said:-

“32. Ringfencing and excluding additional liabilities from the new test of proportionality would be a significant hindrance on the court’s ability to comply with its obligation under CPR 44.3(2)(a) to allow only those costs which are proportionate.”

The court also held that when applying the new test of proportionality, the court need not consider the amount of any additional liability separately from the base costs, although the court did consider the After-the-Event insurance premium separately in this case.

The Master then considered the issue of proportionality and accepted that “there is little guidance on how the new test of proportionality should be applied.”

He accepted that had it been intended that costs should never exceed the sums in issue the rule could easily have stated that. “There will be cases in which the costs bear a reasonable relationship to the sums in issue even though they exceed those sums.”

The court also found that the value of the non-monetary relief in this case was not substantial and the judge based the view on the fact that the claimants knew in March 2011 that the defendant had access to the information on her phone and the phone was returned to her in May 2011 but she did not approach solicitors until March 2013 following press reports of similar cases.

No information taken from the phone had been published in the intervening two years and no application was made for an interim injunction and the court took the view that but for the claim for damages it is unlikely that a claim would have been brought.

The Master described the defendant’s conduct as “reprehensible” but said that much of the civil litigation is based on the bad behaviour of others.

The court also halved the amount of the ATE premium to be recovered holding that it was necessary for the claimant to purchase After-the-Event insurance but the cost was disproportionate.

Comment

This decision shows how random and arbitrary the whole new concept of proportionality is.

What the Master has done here is merely to chop the costs in half but with no real explanation as to why he has done that, rather than, say, reducing the costs by a quarter or three quarters or whatever.

As Simon Gibbs says in his always excellent blog:-

“It is not obvious to me that there was any need to provide a breakdown of the further “Jackson adjustment”. It seems artificial to rule that it was reasonable to spend, say, £10,000 on experts’ fees but that this will then be adjusted down to £5,000.  The “Jackson adjustment”, as the second part of the proportionality test, is to ensure that the total the paying party is asked to pay is proportionate to the claim.  This is concerned with the total, not the constituent parts of that total.  The constituent parts are dealt with in the line by line element of the assessment.”

Simon goes on to point out that the one thing that the Senior Costs Judge did not touch was the court fee and asks why a court fee should be ring-fenced from the proportionality test.

That is a very good point indeed and obviously it would have nothing to do with the possibility of a Senior Costs Judge not wishing to implicitly criticize the Ministry of Justice for the level of its fees, would it?

The problem for lawyers and their clients is that as they go through the case they will have no idea what the court will allow as proportionate whereas any experienced lawyer has a fairly clear idea as to what will be allowed as reasonable and necessary.

It can also act as a deterrent to settle, as settling for a lower sum, even if the claimant could have carried on and got more, will almost inevitably reduce the amount of costs recovered for that work, purely because the receiving party is being reasonable and settling for less than the full value.

I agree with Lord Justice Jackson that the only way to achieve proportionality is to have fixed recoverable costs for everything.

PROPORTIONALITY AGAIN: COURT CHOPS REASONABLE COSTS BY 60%

In May v Wavell Group plc [2016] EWHC B16 (Costs)

the Senior Courts Costs Office conducted a detailed assessment of costs in an action where the claimants accepted the defendant’s first Part 36 offer of £25,000.00 and that meant that the defendants were automatically liable to the claimants for their costs under the usual provisions of Part 36.

The matter was settled before a defence was entered.

The Bill of Costs submitted came to £208,236.54 and the court conducted an item by item assessment and held that the reasonable costs came to £99,655.74.

Thus, without considering the issue of proportionality, the court reduced the bill by more than half and presumably was not impressed by the original bill being twice what it should have been.

On proportionality grounds the Master then reduced the bill on a global basis from just short of £100,000.00 to £35,000.00 plus VAT, a further reduction of around 60% from the sum that it had held to be reasonable in relation to costs reasonably incurred.

The Master took into account the fact that the case was settled at an early stage and said that the proportionate amount of costs will inevitably be smaller for a case that settles early than for one that reaches a final hearing.

The judge also took into account the following matters:-

  • the sum accepted – £25,000.00 – reflected the sums in issue;
  • there was a possibility of an injunction and that had to be weighed in the balance when considering proportionality;
  • the case was neither legally nor factually complicated;
  • there was nothing in the defendant’s conduct which caused additional work to be done;
  • there were no wider factors relevant to the issue of proportionality.

Here the Master said that the amount that can be recovered from the paying party “is not the minimum sum necessary to bring or defend the case successfully. It is a sum which it is appropriate for the paying party to pay by reference to the five factors in CPR 44.3(5). It is not the amount required to achieve justice in the eyes of the receiving party but only a contribution to that receiving party’s costs in many modest cases.” (Paragraph 35).

The Master went on to say, at paragraph 42:-

“In cases such as this, it seems to me that the new test of proportionality… will require legal representatives to inform their clients that, even if successful, they will receive no more than a contribution to the costs that will be incurred.

Here the judge took the view that he did not need to adopt the approach taken in BNM v MGN Ltd [2016] EWHC B13 (Costs) by making a proportionate reduction on each and every item, but rather he should take a global approach and noted that the effect of that “is that the resulting figure becomes entirely a matter of judgment.”

The Master, in a colourful but illustrative phrase said:-

“There is only so much finesse that can be employed when using a broadsword rather than a rapier. A concluding global assessment of proportionality as envisaged by the new approach involves the court wielding a blunt instrument rather than a precision tool.”

Comment

It cannot be right that the stage that the case has reached has any effect on proportionality.

That appears to have no basis in law and certainly does not appear in the Civil Procedure Rule dealing with proportionality. Indeed it seems to be plainly wrong – the amount of work done and the stage that the case has reached is reflected in the figure reached after an ordinary assessment. In other words very obviously if a case settles very early on then the work reasonably and necessarily done will be far less than a case that goes to a trial.

Another interesting factor of this case is that solicitors were not involved as Mr and Mrs May had instructed a QC direct under the Direct Access Scheme.

One wonders if a more worldly person, such as a trainee solicitor which is probably the appropriate level of fee earner for a minor civil claim, would have given some practical and sensible advice which might have saved the Mays around £160,000.00.

Who knows?

Here, at paragraph 41, the Master said:-

“In the present case therefore there was no estimate given to the client in the manner expected (but by no means always achieved) by the SRA Code of Conduct.”

The Master appeared to recognize this and I set out in full paragraph 4 of his judgment:-

“The extent of the reduction in the bill as originally claimed was undoubtedly due in part to the method of representation adopted by the claimants. They instructed Simon Farrell QC on their behalf. Mr Farrell is authorized by the Bar Standards Board to conduct litigation. Consequently no firm of solicitors were instructed and Mr Farrell utilized the services of other barristers and a solicitor as required. The Bar Standards Board had only begun to authorize barristers to conduct litigation shortly before Mr Farrell was instructed by the claimants. Inevitably therefore, there was some novelty in conducting litigation for Mr Farrell and his team. Nevertheless, I am satisfied that the sum that I have ultimately allowed as being a reasonable sum is so whether or not it had been incurred by a firm of solicitors or by direct access counsel. As Mr Carpenter, counsel for the defendants said, and I accept, the reasonableness and proportionality of the recoverable costs cannot depend upon the method of representation. I have raised the point merely to provide some reasoning for the significant level of reduction on assessment from the original sum claimed.”

As noted above the Master here pointedly chose not to revisit each item and reduce it on proportionality grounds but rather simply, in his words, to take a broadsword rather than a rapier and to use “a blunt instrument rather than a precision tool.”

This is precisely the opposite to what the Master did in BNM v MGN Ltd and shows the hopeless confusion and uncertainty that is the nonsensical law in relation to proportionality.

Roll on Fixed Recoverable Costs for everything.

It is now over three years since the new test came in and it is safe to say that none of us is any wiser.

CASE LAW

PROPORTIONALITY: HAS ONE JUDGE HAD ENOUGH?

On Margate Sands

I can connect

Nothing with nothing

TS Eliot: The Waste Land

Section 4 of the Distress Act 1267, still in force, provides:

“Moreover Distress shall be reasonable, and not too great”

which just goes to show that 750 years ago no-one could define proportionality. That remains the case.

In Hobbs v Guy’s and St Thomas’ NHS Foundation Trust [2015] EWHC B20 (Costs)

Master O’Hare considered proportionality in relation to a low value clinical negligence case.

The claim settled for £3,500 before issue and the claimant’s bill was £32,329.12.

The bill being under £75,000.00 it went to provisional assessment, that is consideration by a Costs Master or Judge without the parties being present and, usually, on very limited papers. However this matter was in the Senior Courts Costs Office where it is the practice to consider the whole file.

Although Master O’Hare certainly did not confuse reasonableness and proportionality, which so many judges do, some of those commenting on this case have confused those matters.

Here Master O’Hare, on provisional assessment, reduced the bill by two thirds without any reference to proportionality. He made that reduction purely on the grounds of reasonableness. That reduction would have been made under the old law and the old test in Lownds v Home Office [2002] EWCA Civ 365.

Having slashed the bill the Master then looked at the remaining one third of the original bill and decided that even that greatly reduced sum was disproportionate.

The claimant applied for an oral hearing and the Master upheld his own decision.

In many ways the case contains more of interest in relation to reasonableness and necessity than it does proportionality. Overall the bill was reduced to £9,879.34 including VAT, a reduction of 69.44%.

The Master disallowed all Grade A fee earner work and allowed a mid-range Grade B fee earner at £200.00 per hour saying that there was nothing complex about the case and that a Grade B fee earner could have dealt with it and deferred to advice from a more senior practitioner, whether solicitor or counsel, had any points of sufficient complexity arisen in the matter. This is an unusually detailed analysis of the correct level of fee-earner which I return to later.

The Master disallowed the costs of the conference with counsel on the basis that “it achieved no advantage in the conduct of the claim”.

The Master then dealt separately with pre April 2013 work and post April 2013 work and said that no issues of proportionality arose in relation to the earlier work which was subject to the Lownds test.

He set out the new rule contained in CPR 44.3(5) and referred to rule 44.3(2) which, crucially, states:-

“Where the amount of costs is to be assessed on the standard basis … Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred …” (My Italics)

The Master said that there is little by way of authoritative guidance as to how this new test is to be applied.

Interestingly the Master said that although it will be wrong to disallow any pre April 2013 costs on the basis of the new Jackson test of proportionality:

“In my view it is right to take into account Parts 1 and 2 [the pre-Jackson work] in this calculation even though, if the total is disproportionate, it would be wrong to disallow any costs in Parts 1 and 2 on the basis of the Jackson test of proportionality.”

Thus what he is doing is not disallowing anything pre-Jackson but allowing the pre-Jackson costs to justify disallowance of post-Jackson costs, which to me seems a distinction without a difference. I suspect that that is the Master’s view too. That is a correct analysis of the law and that  amounts to retrospective rule making.

On the reasonable or necessary grounds – the old test – the judge had allowed costs of around £11,000.00 plus VAT.

So it was that sum that he considered in relation to proportionality.

The judge then considered the judgment of Mr Justice Leggatt in

Kazakhstan Kagazy plc v Zhunus [2015] EWHC 404 (Comm) where the judge gave guidance in relation to the new proportionality test and said:-

“13. In a case such as this where very large amounts of money are at stake, it may be entirely reasonable from the point of view of a party incurring costs to spare no expense that might possibly help to influence the result of the proceedings. It does not follow, however, that such expense should be regarded as reasonably or proportionately incurred or reasonable and proportionate in amount when it comes to determining what costs are recoverable from the other party. What is reasonable and proportionate in that context must be judged objectively. The touchstone is not the amount of costs which it was in a party’s best interests to incur but the lowest amount which it could reasonably have been expected to spend in order to have its case conducted and presented proficiently, having regard to all the relevant circumstances. Expenditure over and above this level should be for a party’s own account and not recoverable from the other party. This approach is first of all fair. It is fair to distinguish between, on the one hand, costs which are reasonably attributable to the other party’s conduct in bringing or contesting the proceeding or otherwise causing costs to be incurred and, on the other hand, costs which are attributable to a party’s own choice about how best to advance its interests. There are also good policy reasons for drawing this distinction, which include discouraging waste and seeking to deter the escalation of costs for the overall benefit for litigants.”

Applying that test would have meant no further reduction from that sum of £11,000.00 plus VAT etc.

Here the Master said:-

“I next considered whether the sum allowed as reasonable was also proportionate. The answer would be yes if I were to apply the test propounded by Leggatt J: I had already assessed what was the lowest amount which the Claimant could reasonably have been expected to spend in order to have this case conducted and presented proficiently, having regard to all the relevant circumstances. However, I do not think that test applies in cases such as this where the amount of reasonable costs will inevitably exceed the value of the claim. Kazakhstan Kagazy PLC was a case where the sums in issue bore no relation to the costs however high they were. However the amount of the sums in issue is one of the factors I have to take into account here and, indeed, it is the first factor listed in CPR 44.3. I provisionally ruled that the sum I had allowed as reasonable was not proportionate. In doing so I had regard to the factors listed in CPR 44.3(5) (especially (a) and (c)).”

The Kazakhstan case needed distinguishing. In my write up of it I said:

“…the Commercial Court provided another example of a court conflating proportionality and reasonableness. The terms are run together on at least nine occasions in a short judgment”.

The Master then decided against  “chopping off a slice of all the costs” (his words) that he had just found to be reasonable and thought it better to target particular items of work which were disproportionate  in the particular circumstances of the case and as a result of that exercise disallowed the cost of three items on the basis that they were inconsistent with the true value of the claim.

One item was the cost of the consultant anaesthetist.

Another was in relation to making a Part 36 offer.

The third was to reduce the Grade B fee earner rate to Grade C. Thus the Grade A fee earner had actually done the work and the Master had found that it should have been done by a Grade B fee earner and that that was reasonable and necessary but then allowed only the rate for a Grade C fee earner on the ground of proportionality.

Thus the Master held that proportionality required the work to be done by someone who was not capable of doing it, or rather was not of such seniority as to be likely to do the work properly. This is in the context, as set out above, of the Master going in to unusual detail about exactly what level of fee-earner was necessary – a mid-level Grade B with support from a grade A and/or counsel.

The  judgment suggests that the Master is not keen on proportionality and it may be that he is using deliberately absurd examples to make that point.

He also points out that the general rule is that a judge may not use hindsight in cost assessment – see Francis and Francis v Dickerson [1955] 3 All ER 836.

However the judge says that  today that must trumped by proportionality so effectively a judge does use hindsight – see CPR 44.3 (2).

The judge is right in that statement of the law. However that makes it impossible for a lawyer to work out what s/he can and should spend on a case as obviously we do not have the benefit of hindsight when running a case. That is why there has always been a rule against hindsight in such matters and that was carried through to assessing risk in conditional fee cases. The judge was not to apply hindsight, not to second guess the solicitor’s assessment on the information s/he had at the time of making that decision.

That has been thrown out of the window with proportionality.

The judge also rejected an argument that proportionality did not apply to matters that were absolutely necessary. That must be right. Something is either necessary or it is not – there can be no degrees of necessity.

The Master also said that VAT should not be taken into account in considering proportionality.

Comment

In very round terms the judge reduced the bill around £20,000.00 on the traditional basis and £1,100.00 due to proportionality; in other words around 95% of the reduction would have occurred pre-Jackson.

The Master was clearly very disturbed about the level of the bill absent any issue of proportionality. Was this Master making a point about the futility and unfairness of proportionality?

The logic of this decision is that I should have the following conversation in my office and indeed in counsel’s chambers:-

“This case needs to be dealt with by a recently qualified solicitor with the assistance of counsel of up to five years call. However that would be disproportionate so it will be dealt with by a new trainee and by a pupil.

That will be proportionate but also negligent. I will be obeying the Civil Procedure Rules but failing in my duty to our client.

I also consider that I am failing in my duty as an Officer of the Court by having the matter dealt with by lawyers who I know are not sufficiently senior and experienced to deal with this matter.”

I do not wish to put words into Master O’Hare’s mouth but I think that is a fair paraphrasing of what he says in this judgment, and I believe that he is very well aware of that.

The Master specifically states that the amount required to run the case proficiently was the amount he allowed prior to the proportionality reduction. He then distinguished a post Jackson High Court decision on the point.

It  follows that the Master is saying that the amount he allowed was not sufficient to run the case proficiently. That is reinforced by his decision to make a proportionality cut in relation to the proper level of fee-earner. Having explained at some length that this was suitable for a mid-level Grade B fee-earner with support from more senior lawyers, the Master then imposes Grade C, recognizing that a Grade C is not sufficiently senior to do this work.

There was no need for the Master to go there. No paying party was going to appeal against a two-thirds only reduction. He could have made a global cut – “applied on a global basis” – as per the Jackson Report, quoted by the Master at paragraph 27 of his judgment. He could have chopped a bit more off on the reasonable and necessary basis – who would have noticed? He could have reduced the number of hours rather than saying very clearly that the case required Grade B but proportionality demanded Grade C.

It is hard from the judgment to see exactly what sums were cut under Lownds, and which for proportionality because the Master refers to no specific figure, but refers to costs “exceeding £11,000 plus VAT” etc, but roughly £20,000 was reduced under the Lownds  test and roughly £2,000 due to proportionality. Because the figures include disbursements – not set out in the Judgment – and VAT, which will vary on which disbursements attracted VAT, the actual “profit costs” reduction looks to be even lower. I am not criticising the Master – we simply do not have the details of the figures on provisional assessment.

In the context of the overall reduction the proportionality reduction verges on de minimis, that is so small as to be disregarded by the law.

Was the Master making a point, namely that all that really needs to be done to control costs can be done under the old test and that lawyers are now forced to work in a way that is not proficient, that is by a person who is not “possessed of or advanced in acquiring a skill; expert, skilled, adept” – Shorter Oxford English Dictionary.

Simon Gibbs:

“ I predict a repeat of the relief from sanctions fiasco. The matter will reach the Court of Appeal and they will deliver a robust decision following the guidance already given by Jackson. This will be followed by howls of anguish from the usual suspects, with some justification ,that the decision will deny access to justice for large number of potential claimants.

Shortly afterwards the Court of Appeal will “clarify” their decision and reformulate guidance giving such a watered-down test that it would have made the judges in Lownds blush. The logic of Jackson’s recent calls for a massive extension of fixed fees will then become difficult to resist, but only because a dog’s dinner was made of implementation of the original proposals”.

Proportionality is meaningless, incapable of sensible definition and therefore its imposition is arbitrary and unfair.

For details of Kerry’s 60th Birthday Tour 2016 please click on the following link – KERRY’S 60th BIRTHDAY TOUR 2016!

My book on Fixed Costs will be available shortly and is free to anyone booking a place on the Portals and Fixed Recoverable Costs course.

In Various Claimants v Sir Robert McAlpine and others [2015] EWHC 3543

the High Court has yet again got proportionality and reasonableness hopelessly mixed up and specifically applied Home Office v Lownds, which judgement was overturned by the Civil Procedure Rule change in 2013.

Here the court found the overall budget to the disproportionate and then went through each item to see if it was reasonable, that is the Lownds approach.

That is now exactly the wrong way around. What the court must now do is to assess the reasonableness of each item and then, even if every piece of work is both reasonable and necessary, chop it again if it is disproportionate, whatever that means.

That was the approach correctly taken by Master O’Hare, clearly with some reluctance, in

Hobbs v Guy’s and St Thomas’ NHS Foundation Trust [2015] EWHC B2 (Costs).

PROPORTIONALITY: GUIDANCE?

 

In CIP Properties (AIPT) Ltd v Galliford Try Infrastructure Ltd [2015] EWHC 481 (TCC)

 

the judge found that the claimant’s costs budget contained figures which were “wholly unreasonable and unjustified” and that the upper limit of what is reasonable and proportionate was £4.3 million in both previously incurred costs and estimated costs.

The claimant’s already incurred costs were stated to be over £4.2 million with future estimated costs being over £5 million creating a total of over £9.2 million.

The matter had already been adjourned because of the claimant’s “entirely unreliable” budget presented on a previous occasion and that itself followed the claimant’s objection to there being any budgeting at all as the claim was for over £10 million. The court said that “both the costs already incurred by the claimant, and its estimated costs for the future, were disproportionate and unreasonable.”

  1. In Redfern v Corby Borough Council [2014] EWHC 4526 (QB) HHJ Seymour QC upheld the decision of Deputy Master Eyre in a case where the Deputy Master considered that a proper figure for the costs of the case as a whole was £220,000. That was broadly equivalent to what had already been spent. On the appeal it was argued that the consequence was that the amounts which had been allowed for costs yet to be incurred were inadequate. Judge Seymour rejected that submission, saying:

“That, I think, must be a consequence, potentially, of taking into account in fixing the budgets the amount of the costs already incurred in deciding what would be reasonable and proportionate in respect of all subsequent costs. The only way in which one can take into account excessive costs already incurred in determining the reasonableness and proportionality of subsequent costs is to limit the approved subsequent costs at figures below what they might otherwise have been approved at but for the excessive sums which have already been expended.”

  1. In Yeo v Times Newspapers Ltd [2015] EWHC 209 (QB) Warby J also had to consider the problem of incurred costs. He said:

“61. However, if by the time the costs management process takes place substantial costs have been incurred, one thing the court may do is to “record its comments on those costs”: see PD3E 7.4. What the court will do is to “take those costs into account when considering the reasonableness and proportionality of all subsequent costs”: ibid. The court may reduce a budget for reasons which apply equally to incurred costs, or for reasons which have a bearing on what should be recoverable in that respect, for instance, that so much had been spent before the action began that the budgeted cost of preparing witness statements is excessive. If so, it is likely to help the parties reach agreement without detailed assessment later on if these reasons are briefly recorded at the time the budget is approved. I make some comments of this kind below.”

The judge identified four options:-

1A.         To order the claimant to prepare a new budget.

1B.          To decline to approve the claimant’s costs budget.

  1. To try and set a costs budget on a phase by phase basis, looking primarily at the estimated costs rather than the actual costs.
  1. Simply to refuse to allow anything more in the costs budget beyond that which had already been spent, so that the claimant could recover nothing more and costs already incurred.

The judge chose option 2 but his arguments in considering the various options are useful guidance on the way that courts may deal with such matters.

8. OPTION 1A: ORDERING A NEW BUDGET

  1. I ruled this out of the hearing on 13 February 2015. There are two reasons for that. First, the court’s decision on costs budgets has been adjourned already in this case.  To make the claimant go away and produce a fresh budget would simply add to the already high costs, and with no realistic prospect of any improvement in the information.
  1. Secondly, the real difficulty in the present case is the huge volume of costs which the claimant says it has already incurred. That is not going to change in any new budget. That problem therefore needs to be tackled head on, and now.

 

  1. OPTION 1B: DECLINE TO APPROVE CLAIMANT’S COSTS BUDGET
  1. In one sense, this is the easiest solution. It ensures that the court does not approve a costs budget which it considers to be unreliable, disproportionate and unreasonable.
  1. But the downside of this option is also clear. If I decline to approve the claimant’s costs budget, then all of the arguments that have already been canvassed will have been unresolved, and they will all fall to be considered and decided much later on in the litigation. In addition, the claimant’s legal team may take the view that, without an approved costs budget, they can spend what they like and take their chances on the assessment of the costs incurred.
  1. For theses reasons, I have concluded that declining to order a costs budget, even in the extreme circumstances of this case, would be of no assistance to the parties, particularly the defendant and the additional parties. It is therefore not an option which I propose to adopt.
  1. OPTION 2: SETTING BUDGET FIGURES
  1. Option 2 is to set budget figures, notwithstanding the difficulties created by all of the factors that I have already outlined. The claimant favoured this course. It is easy to see why: Mr Post QC repeatedly argued that costs budgeting was essentially a prospective exercise, so he wanted a costs budget fixed for the various phases of estimated costs, allowing the claimant to take its chances on my comments on the level of costs incurred to date.
  1. The difficulty with this course is obvious. If I simply commented on the costs incurred, and then did a budgeting exercise for the prospective costs, I would arrive at an overall figure that was far in excess of that which I consider to be a reasonable and proportionate figure for the costs as a whole. That was the defendant’s concern, a concern shared by the additional parties.   In addition, this would have the effect of allowing the claimant to ride roughshod over the costs management process; to be rewarded for the wholly unreasonable stance that they have taken throughout.
  2. OPTION 3: REFUSE TO ALLOW ANY FURTHER COSTS
  1. This would involve putting the figure for all phases of future costs at ‘nil’. The defendant and the additional parties were in favour of this option, which seems similar to the approach in Redfern (paragraph 9 above). They say that, if I refused to allow any further costs beyond those which have been incurred, because that figure is broadly in line with what I consider to be a reasonable figure for the claimant’s costs in this case overall, then that would be an appropriate and just solution. It would also mean that the future risks as to costs would be borne by the claimant, which is the party who are, in that sense, in default.
  1. The potential difficulty with this course is the one that I myself identified during the hearing. If I did not allow any further costs beyond those which have already been incurred, then there is nothing to stop the defendant, at the assessment of the costs already incurred, seeking to reduce those figures considerably. The claimant may then be doubly penalised because its costs incurred would be the subject of significant reduction on assessment, and it would not have got anything further in relation to the costs to be incurred because I would have set its prospective costs at nil.
  1. I am not persuaded that this difficulty is alleviated by CPR 3.18, despite Mr Constable QC’s submissions to the contrary. If I set the prospective costs budget at nil because of the size of the costs incurred to date, then it might be difficult for the claimant to modify that result by making an application under CPR 3.18. After all, all the relevant information is available now. That might be unfair in the result, for the reasons given.
  1. Regrettably, I conclude that this makes Option 3 (which would otherwise have been the best alternative because it put the risks where they belong, with the claimant) unworkable.
  1. CONCLUSIONS ON THE AVAILABLE OPTIONS
  1. For the reasons that I have indicated, only Option 2 is workable. But, in the unusual circumstances of this case, I have decided that Option 2 needs to be modified in order to arrive at a better approximation to justice.”

The judge then set out all of the figures for all of the phases and said:-

“In that way, going forward, the assessed costs/costs budget for the claimant will be a total of £4.28 million, made up of the figures which I consider to be recoverable on assessment in respect of the costs said to have been incurred, and the approved budget figures in respect of the estimated costs. As noted above, the estimated costs fall to be reduced, £ for £, to the extent that the amounts actually recovered on assessment in respect of costs incurred are higher than the figures which I have indicated.”

 

What the judge in fact there was doing is saying that if costs recovered in respect of already incurred work were higher than he estimated then the future estimates should drop £ for £ to reflect the fact that matters were further advanced than he thought.

 

A flavour of this can be given in this paragraph from the judgment:-

 

“In relation to the Pre-Action Costs, I conclude that, on assessment, those should not exceed £680,000. I take that figure into account when assessing each element of the prospective/estimated costs dealt with below. To the extent that the claimant recovers more than £680,000 on assessment under this head, it would mean that more work had been legitimately done in the earlier stages of the case than I thought, which would in turn mean that less remained to be done in the future. Thus the prospective costs figures approved below would fall to be reduced by an equivalent sum.”

 

For all intents and purposes this is a summary assessment of already incurred costs.

 

3EPD.2 Practice Direction states at that:-

 

“2.4        As part of the costs management process the court may not approve costs incurred before the date of any budget. The court may, however, record its comments on those costs and should take those costs into account when considering the reasonableness and proportionality of all subsequent costs.”

 

This has subsequently been amended to provide that the court “will” take previous costs into account when considering the reasonableness of proportionality of those costs to be incurred.

 

As in most cases on proportionality the court here seems to be confusing and conflating reasonableness and proportionality.

 

Unreasonable costs, or costs unreasonably incurred will always be disallowed, whether costs are on the standard or contingency basis.

 

What the judge has done here is to refer to the costs as being “disproportionate” and then gone on to refer to the hourly rate as being “unreasonable” and the hours claimed as being “much more extensive than is reasonable or appropriate” and the use of a Grade A partner instead of more junior lawyers being “a specific cause of the unreasonable level of the claimant’s costs.”

 

That is entirely the wrong way round and does not throw any light on the issue of proportionality. Turning it round the other way costs may be proportionate but unreasonably incurred, or reasonably incurred but disproportionate.

 

The idea is that the court must look at what is reasonable and necessary as part of its ordinary supervisory function and then, if inappropriate, reduce what would otherwise have been the figure allowed on the grounds of proportionality.

 

It is very clear that in this case the judge thought that a very considerable amount of costs were being unreasonably incurred; it may in fact be that there is no true reduction for proportionality as compared with unreasonableness.

 

This confirms what many are saying, namely that proportionality as a concept is incomprehensible.

 

PROPORTIONALITY: A MESS AT THE SAVOYE

 

In Savoye and Savoye Ltd v Spicers Ltd [2015] EWHC 33 (TCC)

 

Mr Justice Akenhead, sitting in the Technology and Construction Court, reduced the successful party’s recoverable costs to £96,465.00 from the sum claimed of £201,790.66, on the grounds that the bill was not reasonable or proportionate.

 

The claim was worth £889,300.00.

 

However as the concepts of reasonableness and proportionality were conflated the case does not assist in informing lawyers as to how the courts will deal with proportionality.

 

It would be helpful if judges arrived at what they judge to be a reasonable figure for the work necessarily done and then reduce that figure, if appropriate, on proportionality grounds and explaining the thinking behind that proportionality based reduction.

 

Furthermore it appears that the sum of £201,790.66 was the claim on an indemnity basis, where proportionality does not apply.

 

The Judge refused to award costs on an indemnity basis, but it is not clear what the full costs claimed on the standard basis were.

 

Consequently it is impossible to tell what the reduction was from, and whether that unknown deduction was made on the grounds of reasonableness or proportionality or both.

 

If both it is unclear as to what element was on the basis of reasonableness and what was on the basis of proportionality.

 

This judgment is all over the place and shows the problem which judges have always had, and will continue to have, in relation to proportionality.

 

Most of us would be surprised if proportionality, as compared with reasonable and necessary costs, reduced the bill to just 10.85%, including VAT, disbursements and counsel’s fees, of the sum claimed.

 

In Savoye the court said:

 

“In the light of the above, and for the purposes of costs assessment, the Court should have regard when assessing proportionality and the reasonableness of costs, in the context of the current case or type of case, to the following:

 

  • The relationship between the amount of costs claimed for and said to have been incurred and the amount in issue. Thus, for example, if the amount in issue in the claim was £100,000 but the costs claimed for are £1 million, absent other explanations the costs may be said to be disproportionate.

 

  • The amount of time said to have been spent by solicitors and barristers in relation to the total length of the hearing(s). For example, if 3,000 hours of lawyers time is incurred on a case which involves only a one day hearing, that might well point to a disproportionate incurrence of time spent.

 

  • In the context of time spent, the Court can have regard to the extent to which the lawyers for the party claiming costs and the party itself has incurred cost and spent time before the Court proceedings in connection with any other contractual dispute resolution machinery agreed upon between the parties. Here, for instance, there was provision for adjudication, in which the parties were required to pay their own costs of that process. If and to the extent that the work in connection with the adjudication duplicates the work done in the Court proceedings, or, put another way, if the same issue arises and was addressed in the Court proceedings as in the adjudication, it may be disproportionate to expend anew what is repetitious effort and time in the later proceedings.

 

  • The extent to which the case is a test case or in the nature of a test case.

 

  • The importance of the case to either party. If for instance an individual or a company is being sued for everything which he, she or it is worth, it may not be disproportionate for that individual to engage a QC even if the amount in issue is objectively not very large.”

 

That will send a few shivers down a few spines.

In Kazakhstan Kagazy plc v Baglan Abdullayevich Zhunus [2015] EWHC 404 (Comm)

 

the Commercial Court provided another example of a court conflating proportionality and reasonableness. The terms are run together on at least nine occasions in a short judgment.

 

If costs are unreasonably incurred then proportionality does not come into play. No court allows unreasonably incurred costs, either on the standard basis or on the indemnity basis.

 

We will only get guidance on proportionality when a court says, for example:-

 

“Reasonable and necessary incurred costs in this case total £20,000.00. However I regard £15,000.00 as a proportionate sum. My reasons for this are:-

 

 

…”

 

What the court here did say is that the fact that costs claimed by a party are disproportionate should not affect, either upwards or downwards, the sum which it is reasonable to order the other party to pay on account.

 

Attempt to limit costs renders offer ineffective

In Burrell v Clifford [2016] EWHC 578 (Ch)

the defendant made an offer which matched exactly the damages awarded and so the claimant had failed to beat the offer. Had it been a Part 36 offer it would have been effective.

However when making the offer the defendant made it conditional on costs being only £5,000.00 and when the offer was made the costs were already much higher than that.

The defendant could and should have made a Part 36 offer which involved paying costs to the date of the offer. The defendant had the protection of the costs budgeting regime and of proportionality.
Consequently the offer was ineffective. The claimant had won. The defendant had to pay the claimant’s costs for the whole action.
The claimant sued and won and was awarded £5,000.00 damages, exactly the same as already offered and when making that offer the defendant had offered costs limited to £5,000.00 and argued now that that offer should be taken into account on the assessment of costs.

The Chancery Division of the High Court rejected that argument.
The facts show the dilemma facing a defendant – make a Part 36 offer and pay all costs or limit costs and risk getting no protection.
This can be particularly difficult when a defendant is making a low offer compared with a high claim as potentially the costs reflect the high, essentially lost – claim.

The case is also a powerful argument for fixed recoverable costs in all civil work. Here costs budgeting applied to the claim and the claimant’s costs were fixed at £128,695.41 plus VAT and the defendant’s at £90,295.00 plus VAT.

It seems to me that this became a small claim and there is plenty of authority stating that when the balance is under the small claims limit it should be treated as a small claim.
Although the court here referred to the judgment in Walker Construction (UK) Ltd v Quayside Homes Ltd & Brett [2014] EWCA Civ 93 it appeared to find that that case was wrongly decided, although it is not clear from paragraph 9 of the judgment as to why it did not feel bound by a decision of the Court of Appeal.

However what the court said at paragraph 9 does describe the problem facing a defendant where a high value claim is settled for a low amount:-

“9. Now, it is submitted by Mr. Barrett [counsel for the paying party], by reference to the notes in The White Book and a case called Walker Construction (UK) Ltd v Quayside Homes Ltd & Brett [2014] EWCA Civ 93 that the Court of Appeal were critical of the first instance judge in that case because he did not give appropriate consideration to the fact that the losing party could not realistically have made a part 36 offer because it would have had the automatic consequence that if it was accepted the successful party would have been entitled to all its costs in the proceedings to date. I obviously pay careful regard to that, but I do not find it a persuasive proposition, at least in the context of this case. To my mind, somebody making an offer of this sort who includes an offer for the costs to date has all the protection they could reasonably expect by reason of the assessment regime which will have regard to reasonableness of costs and proportionality.”

That proposition is made laughable by the actual costs budgeted in this case – set out above – and that in this very judgment the court rejected further arguments on proportionality stating:-

“The difficulty that I see – while I am very sympathetic to a number of the points that Mr. Barrett has made about proportionality – is that where somebody has a proper claim with a good foundation and they bring it in the proper court, it is not in my judgment reasonable that one should end up by saying, “Well, the value is very low compared to the costs, and therefore either you shouldn’t have your costs, or you should have to pay the defendant’s costs, or you should have a radical reduction in the proportion of your costs recoverable because of the disparity between the value of the claim and the costs”. As I say, the question of reasonableness and proportionality of costs, in my judgment, is dealt with by the costs budgeting and costs assessment exercises, and in my judgment that is the answer to the thrust of Mr. Barrett’s submissions.”

 

What the court appears to be saying is that here costs of around £150,000.00 including VAT are proportionate to a claim of £5,000.00.

Somehow I suspect that that will not be followed in personal injury work.

In Group Seven Ltd v Nasir [2016] EWHC 629 (Ch)

Mr Justice Morgan sitting in the Chancery Division of the High Court was dealing with costs budgets and had to consider the issue of proportionality.

He said “the decided cases do not give much direct help” when considering the relationship between the costs and the sums in issue in the case.
The judge commented that budgeted costs of just over £5 million seemed to him to be disproportionate in relation to a claim for just over £7 million. The £5 million included a sum of £700,000.00 for contingencies but the judge held that even by removing all of that the result was still disproportionate.

The fact that the matter could well be leapfrogged on appeal to the Supreme Court was irrelevant – “I am not expected at this stage to manage the costs of any future appeal.”

The judge also held that the potential obstructiveness of the defendant could be dealt with by way of a contingency in the budget.

The judge also held that allegations of dishonesty and fraud are not freestanding considerations and that “In some cases of fraud or alleged fraud, at the end of the case, a court may be influenced by its finding of fraud, or of the absence of the alleged fraud, to award costs on an indemnity basis. If that were ordered, then the recoverable costs would not be restricted to proportionate costs. However, at the costs budgeting stage, the court is required to consider the question of the proportionality of the costs, even in a case involving an allegation of fraud.”

In relation to the solicitor’s hourly rates the judge used the 2010 guideline hourly rates and rejected submissions that they were guidelines for summary assessment and not for a major High Court action resulting in a long trial and that they were from 2010 and six years out of date and that they were for the guidance of the court and not binding on the court. Here the trial was estimated to last 40 days.

The judge then reduced the budgeted fees for Queen’s Counsel from £1,135 million to £398,000.00 and Junior Counsel’s fee from £468,650.00 to £199,000.00. In relation to another party’s Queen’s Counsel the judge reduced the budget from £487,000.00 to £250,000.00 and Junior Counsel’s fee from £319,000.00 to £155,000.00.

The judge rejected the idea that he should allow the market rate for counsel. “it seems to me that the sums being claimed are a major reason why these parties’ budgeted costs give rise to sums which are disproportionate… As already explained, even if I were persuaded that the fees claimed for counsel were reasonable, they should not be included in the budget at that level when they contribute to the overall result that the budgeted sums for Group Seven, ETS and the Swiss Bank are disproportionately high.”

Insofar as Counsel utilised hourly rates the judge approved a maximum of £500.00 per hour for Leading Counsel and £275.00 per hour for Junior Counsel.

Proportionality, Costs Budgeting and Indemnity Costs

 

Alternative Dispute Resolution

 

How does proportionality fit in with ADR?  What happens if the courts push the parties into ADR and that ADR fails, which adds significantly to the costs, and that causes the bill to be disproportionate?  Will the court disallow costs on the basis of proportionality, even though it was the court that caused disproportionate costs to be expended on the matter?

 

The answer appears to be yes and this may lead to courts being reluctant to push the parties to ADR if they know that the costs will not be recoverable.  In other words the whole concept of ADR is challenged by the concept of proportionality.

 

Fixed Recoverable Costs

 

Fixed recoverable costs are just that and no additional costs are recoverable if ADR is undertaken in a fixed recoverable cost case.

 

Will this affect the court’s attitude in relation to ADR in such cases?

 

Qualified One-Way Cost Shifting

 

In a Qualified One-Way Cost Shifting case, subject to certain exceptions, the Defendant cannot get costs but the Claimant can.  Thus ADR will be an extra cost upon a Defendant which that Defendant can never recover.

 

At present fixed recoverable costs only cover personal injury work and therefore new cases without an additional liability that are fixed recoverable costs cases will, by definition, be Qualified One-Way Cost Shifting cases as well.  In such cases neither party can ever get the extra costs of ADR.

 

As with so many of the Jackson Reforms the interplay between the various proposals has just not been thought through.

 

We already have two conflicting High Court decisions as to whether the costs budget has any relevance in a case where indemnity costs have been awarded.

In Elvanite Full Circle v AMEC Earth and Environmental (UK) Ltd [2012] EWHC 1643 (TCC)

the High Court held that even on an indemnity basis the starting point is the approved budget.

In a powerfully argued judgment in Kellie and Kellie v Wheatley and Lloyd Architects Ltd  [2014] EWHC 2866 (TCC)

the High Court disagreed.

The court pointed out that whatever was previously thought it is now clear that an indemnity costs order is significantly more valuable than a standard order.

The court quoted Lord Woolf in

Lownds v Home Office [2002] EWCA Civ 365

“The fact that when costs are to be assessed on an indemnity basis there is no requirement of proportionality and, in addition, that where there is any doubt, the court will resolve that doubt (as to whether costs were unreasonably incurred or were unreasonable in amount) in favour of the receiving party, means that the indemnity basis of costs is considerably more favourable to the receiving party than the standard basis of costs”.

Here the court said that this distinction is highlighted by the CPR and Practice Direction concerning costs management.  Practice Direction 3E paragraph 7.3 provides:

“When reviewing budgets, the court will not undertake a detailed assessment in advance, but rather will consider whether the budgeted costs fall within the range of reasonable and proportionate costs”.

CPR 3.18:

“In any case where a costs management order has been made, when assessing costs on the standard basis, the court will –

  • have regard to the receiving party’s last approved or agreed budget for each of the proceedings; and
  • not depart from such approval or agreed budget unless satisfied that there is good reason to do so”.

In Henry v Group Newspapers Ltd [2013] EWCA Civ 19 the Court of Appeal said:

“The primary function of the budget is to ensure that costs incurred are not only reasonable, but proportionate to what is at stake in the proceedings.”

Here the defendant’s budget had been approved at £91,700 with the judge having refused, on proportionality grounds, to approve a budget of over £140,000.

The amount now sought on the indemnity basis was £166,469.

The court here in Kellie held that

“costs management orders are designed to set out the probable limits of the costs that will be proportionately incurred.  It is for that reason, and not because of any quirk of drafting, that CPR 3.18 refers specifically to standard assessment and not to indemnity assessment.  Proportionality is central to assessment on the standard basis and it trumps reasonableness.  However, proportionality is not in issue if costs are to be assessed on the indemnity basis.”

“I therefore find it difficult to see why logical analysis requires importing the approach in CPR 3.18 into assessment on the indemnity basis. The first reason given by Coulson J, at [29], has force if at all only if an approved or agreed budget does indeed reflect the costs that the receiving party says it expects to incur. However, the present case is an example precisely of the proper use of costs management in approving a budget at a lower figure than that proposed by the receiving party, on the very ground of proportionality. To suppose that the imposition of a budget under Part 3 would create some sort of presumption as to the limits of reasonable costs would be to ignore the fact that the approval of costs budgets is done on the basis of proportionality, not mere reasonableness. The matters referred to in connection with the first reason may, accordingly, justify having regard to the amount of costs the receiving party expected to incur, but they do not justify applying the CPR 3.18 analogously to assessment of costs on the indemnity basis. Similarly, the second reason, stated at [30], seems to me, with respect, to go further than is justified by the costs management regime. When a costs management order is made, the parties know that costs within the approved budget are likely to be considered proportionate, and costs in excess of the approved budget are likely to be considered disproportionate; in either case, the burden of justification lies on the party seeking a departure from the approved budget. But the costs management regime is not intended to give litigants an expectation that they will not incur a liability for disproportionate costs pursuant to an order for costs on the indemnity basis; any such expectation must rest on a party’s own reasonable and proper conduct of litigation. It is no objection to an order for costs on the indemnity basis that it is likely to permit the recovery of significantly larger costs than would be recoverable on an assessment on the standard basis having regard to the approved costs budget; that possibility is inherent in the different bases of assessment, and costs on the indemnity basis are intended to provide more nearly complete compensation for the costs of litigation. I accept, of course, that a party seeking to recover disproportionate costs on an assessment on the indemnity basis is required to show that those costs were reasonably incurred; though that requirement is subject to the provisions of CPR 44.3(3). That does not, however, justify the analogous use of CPR3.18, which has three disadvantages. First, it is both unnecessary and contrary to the rationale of that rule. Second, it tends to obscure the fact that the nature of the justification required of a receiving party is quite different under the two bases of assessment. Third, and consequently, it risks the assimilation of the indemnity basis of assessment to the standard basis, which is not justified by the costs management regime in the CPR. In my judgment, the proper way of addressing the concern identified by Coulson J in Elvanite at [30] is, first, by ensuring that applications for indemnity costs are carefully scrutinised and, second, by the proper application of the well understood criteria of assessment in CPR 44.3(3) to the facts of the particular case. It might also be remembered that, even if there exist grounds on which an award of indemnity costs could properly be made, such an award always remains in the discretion of the court.”

In neither Elvanite or Kellie was an indemnity cost order in fact made, so both judgments are obiter, that is not relevant to the decision, and therefore not binding on other courts.

 

Timetable

 

The rules until 31 March 2013, and which continue to apply to all stage of cases issued before 1 April 2013, are that on a standard basis assessment the court will “only allow costs which are proportionate to the matters in issue” (CPR 44.4(2)(a)).

 

When the Court of Appeal was asked to interpret in Lownds v Home Office [2002] EWCA Civ 365 what proportionality meant it held: “what is required is a two-stage approach. There has to be a global approach and an item by item approach. The global approach will indicate whether the total sum claimed is or appears to be disproportionate having particular regard to the considerations that Part 44.5(3) states are relevant. If the costs as a whole are not disproportionate according to that test then all that is normally required is that each item should have been reasonably incurred and the costs for that item should be reasonable. If on the other hand the costs as a whole appear disproportionate then the court will want to be satisfied that the work in relation to each item was necessary and, if necessary, that the cost of the item is reasonable.”

 

This rule will remain in place in relation to all aspects of all cases where proceedings were issued before 1 April 2013.

 

In Ted Baker plc v Axa Insurance UK plc [2014] EWHC 4178 (Comm)

 

the court disallowed 75% of the defendant’s costs because they conducted the litigation in a wholly disproportionate manner.

 

“…the defendants pursued an approach which…seemed to ignore all sense of proportionality.”

 

Here the parties’ combined bills totalled £7 million in a case worth £90,000.00.

 

 

 

 

In Davies and Others v Greenway, Senior Courts Costs Office, 30 October 2013, Case No JMS 1205590

the SCCO held that an order for assessment on the standard basis prevented the court from simply restricting the claimants’ costs to road traffic accident protocol amounts.

However the court was entitled to decide that those protocol amounts were the proportionate and reasonable sums without conducting a line by line assessment.

Here the claims were settled for less than £10,000 and would have been subject to RTA protocol fixed costs, but the claimants’ solicitors sent them to the wrong insurer and failed to re-submit them to the correct insurer, who had admitted liability.

Correspondence with the correct insurer produced a limited response and proceedings were issued and judgment entered with quantum to be assessed and the claims were then settled by consent, and the Consent Order provided:

“The Defendant to pay the Claimants’ costs of this action on the standard basis to be assessed if not agreed”.

The claimants’ solicitors served a bill totalling £17,430.11.  The defendant served Points of Dispute arguing that the claimant had unreasonably failed to comply and/or elected not to continue with the RTA process and its fixed costs scheme and that costs should be limited to “an amount commensurate with the costs under CPR 45 of Section VI pursuant to the express power in CPR 45.36”.

In O’Beirne v Hudson [2011] 1 WLR 17171 the Court of Appeal held that where there was a consent order for assessment on a standard basis the court could not limit the costs to those that are fixed costs for the small claims track.

The defendant argued that the same difficulty does not arise in the RTA protocol as CPR 45.36 expressly provides that the court can limit costs to RTA protocol amounts.

The claimants argued that the consent order was binding and that the defendants were seeking to re-write it, and that pursuant to

Solomon v Cromwell [2011] EWCA Civ 1584

an award of fixed costs cannot constitute a standard basis of assessment.

The court held that CPR 45.36 did not apply; the defendant had consented to an order for detailed assessment on the standard basis and that is a contract that the court had no power to vary.  The Master said that even if he was wrong about that he bore in mind that the power set out in CPR 45.36 is discretionary and not mandatory.

At the detailed assessment the Costs Judge is obliged to have regard to all the circumstances in deciding whether the costs were proportionately and reasonable incurred or were proportionate and reasonable in amount.  The Costs Judge must also have regard to the conduct of the parties including in particular the efforts made, if any, before and during the proceedings in order to try and resolve the dispute.

The Costs Master then quoted at length from the Cambridge County Court decision of 13 January 2011 in Smith v Wyatt.

 

In that case the claimants sought permission to appeal to the Court of Appeal and at a permission hearing [2011] EWCA Civ 941, Lord Justice Moore-Bick stated:

“10.        It is the function of the Costs Judge to determine whether costs have been reasonably and necessarily incurred and if he can see that a particular course of conduct has led to a group of costs being incurred unnecessarily , he is entitled to say that and need not to consider each item individually.  In my view the argument to the contrary is not really sustainable”.

The original Cambridge County Court judgment, approved by the Court of Appeal, contained the following passage, quoted by the Costs Master here:

“13.        The essential test that emerges from O’BeIrne and Drew appears to me to have two elements, one of substance and one of process.

  • In substantive terms, the test to be applied on a detailed assessment when this problem arises is:

 

whether it is reasonable for the paying party to pay more than would have been recoverable had the relevant alternative regime applied.

 

  • In process terms, what is important is that the Costs Judge always bears in mind that he is both conducting a detailed assessment and applying the test at (a) above. If he does so, and having done so concludes that it was not reasonable to take the case out of the alternative regime and hence not unreasonable to incur the extra costs that flow from that unreasonable decision, he will have remained within his proper discretion.  If he does not do so, but simply concludes that the case ought really to have been (say) a small claim and therefore that the regime automatically and comprehensively applies, regardless of reasonableness one way or the other, he will have stepped outside of his discretion and in effect re-written the costs order he is supposed to be applying”.

The Costs Master here said “…..it is important that I form a view on the issue of proportionality”.  That view was that the costs were disproportionate.

Furthermore the claimants’ failure to comply with the RTA protocol led to disproportionate costs being unreasonably and unnecessarily incurred.

Having found disproportionality the Costs Master said that it was open to him to go through the bill on an item by item basis but that, following Smith v Wyatt, he was not obliged to do so.

Had the claimants acted reasonably by re-serving the CNF on the correct insurer they would only have been able to recover RTA protocol costs.  It would be unjust to allow them to recover more and thus benefit from their unreasonable conduct.

Thus although the consent order required the court to carry out a detailed assessment the court was entitled, in that detailed assessment, to limit costs to RTA protocol costs and that was the order of the Costs Master.

 

In Vitol Bahrain EC v Nasdec General Trading LLC and Others [2013] All ER (D) 38 (Nov)

 

the Commercial Court, part of the Queen’s Bench Division of the High Court, considered the issue of proportionality post-Jackson.

 

The facts of the case are not relevant for the purposes of considering its effect on proportionality, save that it related to interim injunction proceedings only in a claim worth US$119 million.

The defendant succeeded and Mr Justice Males ordered costs to be summarily assessed on the standard basis.  His opening remarks in his costs judgment set the tone:

 

“1.          I decided to take time to consider this summary assessment of the second and third defendants’ costs because the amounts claimed in the statement of costs filed on each side are eye watering”.

 

“Eye-watering” is precisely the term used by Mr Justice Moor in his criticism of Mrs Young’s costs of £6.4 million as “totally unacceptable” in Young v Young [2013] EWHC 3637, a family matter involving ancillary relief.

 

In the Bahrain case the claimant’s statement of costs was £242,760.48 and the defendants’ was £165,421.80.

 

The Judge referred to both sides “charging on an epic scale,” (paragraph 8).  Accepting that “the parties and their lawyers are free to agree whatever they wish”, (paragraph 11).  Mr Justice Males continued “……the rules make clear that the costs recoverable by the successful party from the unsuccessful party are limited to those which are reasonable and proportionate”.

 

He assessed the defendants’ costs at £75,000, that is less than half of the sum claimed and less than one-third of the claimant’s estimate, albeit accepting that the claimant had to carry out considerably more work.

 

In a key passage the Judge said:

 

“12.        It is important that the message should go out loud and clear that the Commercial   Court will not assess costs summarily in such disproportionate amounts merely because the figures on both sides are broadly comparable.  Control will be exercised to ensure that the costs claimed from the unsuccessful party are reasonable and proportionate”.

 

This case was not subject to costs budgeting but the principle must apply to costs budgeted cases, so the fact that a party comes within budget will not save it, even if that budget was agreed by the other side.

 

One wonders now whether there is any point in trying to agree a budget.

 

There is also little point in preparing one’s own budget conservatively so as to give weight to an objection to the other side’s costs in the event of defeat.

 

Now one can say “Well, I know my budget was for £242,760.48, but that does not make the other side’s budget of £165,421.80 proportionate”, or whatever.

 

A different approach was taken by the court in Slick Seatings Systems v Adams    [2013] EWHC B8 (Mercantile). There the damages were £4.4 million and the costs claimed were £351,000, within the budget of £359,000. Costs of £351,000 as claimed were ordered there and then. Master Haworth has pointed out that “the paying party has no chance to challenge the costs if the budget is simply approved without going to detailed assessment. It’s just a case of “pay it in 14 days”. (Litigation Funding/Law Society conference 15 October 2013).

 

It is still not clear how Judges are meant to approach proportionality.  Here the sum at stake was US$119 million, although as the Judge was at pains to point out this was an application, not a trial, – “It was, therefore a typical one day Commercial Court application such as might be encountered on any Friday”. (Paragraph 3).

 

Fair enough, but in such circumstances what makes £75,000.00 as compared with £50,000.00 or £150,000.00 proportionate?

 

This problem arose in the context of the pre 1 April 2013 rule in

 

1-800 Flowers Inc v Phonenames Ltd  [2001] EWCA Civ 721

 

where the Court of Appeal held that the trial Judge had been wrong in principle in summarily assessing costs in a trademark case at £10,000 compared with the sum claimed of £38,000.00.  The Judge’s error was in applying his own tariff as to what costs were appropriate rather than going in to any detailed analysis of the statement of costs and the objections to it.

 

That is exactly what occurred in the current case, although that is probably permissible under the new proportionality rule which specifically states:

 

“Costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred”.

 

The problem is that another judge may have allowed £150,000.00 or £50,000.00 and none of us would ever know why, beyond that that is the proportionate sum, which takes us back to the question of what is proportionate?

 

I appreciate that all courts have a wide discretion in costs matters, but simply to say, without further ado, that a figure is disproportionate is not satisfactory.

 

Now, if the case was worth £100,000.00 one can understand that anyone might consider £165,000.00 disproportionate.  Res ipsa loquitur as we used to say.

 

But here the claim was worth US$119 million, so £165,000.00 is between one quarter and one fifth of one per cent of the value of the claim, or to put it another way the claim was worth between 400 and 500 times the amount of costs claimed.

 

Now that may be unreasonable and unnecessary and lots of other un-things but it does not immediately come across as disproportionate.

 

Lack of obvious disproportionality should not of course justify what may be outrageously high fees for an application, but surely the answer was to have a detailed assessment and go through the work line by line.

 

Item by item detailed assessment seems pointless if the end figure will then be knocked down further to produce a proportionate sum.  Why not just start and end with the proportionate sum?

 

If that is the case what is the point of a detailed budget?  If, to quote Simon Gibbs’ blog, the Judge can simply say on assessment:

 

“The damages were £x and I’m not going to allow costs of more than £y at the conclusion of the assessment.  Do I need to hear from either of your further?”

 

then why not do that at the Case Management and Costs Budget hearing and save everyone the bother?

 

Actually why not do it on receipt of the pleadings and cut out budgets and assessments?

 

“I have read the pleadings.  Whatever happens neither of you is getting more than £100,000.00 costs”.

 

Why not just have fixed costs?

 

Why not scrap recoverable costs and move to contingency fees?

 

Why not indeed.

 

As an aside, and entirely unconvincingly, the Judge here said that the opt-out would make no difference to a case such as this.

 

So there we have it.  The first decision on proportionality is made in a case where whatever else the costs were, they were not disproportionate, and made by a court which has chosen to opt out of costs budgeting.

 

Like all else Jackson-related – you could not make it up!

 

Proportionate Costs Orders

 

There is great scope for confusion between proportionality and proportionate costs orders.

 

“The power to make an order for only a proportion of the successful party’s costs (“a proportionate costs order”) is recognised in CPR44.2(6)(a).  In deciding what order to make about costs, the court is required to have regard to all the circumstances, including those mentioned expressly in CPR44.2(4) and (5); the following provisions of those paragraphs are particularly relevant:-

 

“(4) In deciding what order (if any) to make about costs, the court will have regard to all circumstances, including –

 

  • the conduct of all the parties;

 

  • whether a party has succeeded on part of its case, even if that party has not been wholly successful…

 

 

(5) The conduct of the parties includes –

 

(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

 

(c) the manner in which a party has pursued … a particular allegation or issue;…”

 

The above is a direct quote from paragraph 5 of the High Court’s decision in the case of Kellie v Wheatley & Lloyd Architects Limited [2014] EWHC 2886 (TCC). Paragraphs 6 and 7 are set out below.

 

“6. In Multiplex Construction (UK) Ltd v Cleveland Bridge UK Ltd [2008] EWHC 2280 (TCC), at [72], Jackson J derived a number of principles from the authorities; Mr Troup relied on the following principles in particular:

“(v) In many cases the judge can and should reflect the relative success of the parties on different issues by making a proportionate costs order.

(vi) In considering the circumstances of the case the judge will have regard not only to any part 36 offers made but also to each party’s approach to negotiations (insofar as admissible) and general conduct of the litigation.

(viii) In assessing a proportionate costs order the judge should consider what costs are referable to each issue and what costs are common to several issues. It will often be reasonable for the overall winner to recover not only the costs specific to the issues which he has won but also the common costs.”

  1. In Enterprise Managed Services Ltd v Tony McFadden Utilities Ltd [2010] EWHC 1506 (TCC), Akenhead J said at [10]:

“A number of general observations can properly be made in the context of this case in relation to the fixing of the relevant percentage in the proportionate costs approach:

  • The first step is obviously to determine which of the parties has been successful in overall terms; if one can not determine that, it may be that one needs to consider the issues-based approach.
  • One needs to consider the overall context of the litigation, including the reasons which led to its genesis; that involves considering the conduct of the parties which led to the need for the litigation in the first place.
  • The reasonableness, or unreasonableness, of each party taking the various points or issues upon which it lost, should be considered by the Court. The more unreasonable the position of the losing party, the more likely that, even if the court orders only standard, as opposed to indemnity, based costs, it will attach weight to this factor.

 

  • Whilst one needs to have regard to the issues upon which each party has succeeded, a simple mathematical approach on the basis of the number of issues ‘won’ by each party will often not be an appropriate basis for fixing the percentage; thus, simply because the overall successful party has won 3 out of 5 issues, should not mean automatically that it should recover 60% of its costs. One needs to have regard to the likely amount of resources applied as well as to the impact overall of the success or failure on the various issues.

 

  • Similarly, the Court should be cautious about fixing a proportion by reference to the amount of time or space applied by the judge in his or her judgement to the issues upon which each party has been successful or unsuccessful. The judge may simply have had to take up more time and space in the written judgement to address what may be more complex issues. The fact that 80% of the judgement addresses a legal issue upon which the overall successful party lost should not, at least generally, mean that it can only recover 20% of its costs.
  • The Court needs also to have regard to the fact that the overall unsuccessful party will have incurred cost in dealing with the issues upon which it has ‘won’.

 

  • Where the parties have put before the court summary costs bills for assessment, the Court can have regard to the likely cost and resource which each party will have applied in relation to the issues upon which they have won or lost.

 

  • Where the parties cannot put such information before the Court, and in any event, the Court must do the best that it can in fixing a proportion.””

 

PROVISIONAL ASSESSMENT

 

There is a problem in the interplay between provisional assessment and proportionality. The parties undertake the arithmetic on the Bill after it has been provisionally assessed. How then does the judge carry out the global proportionality check on the final figure if she does not know what that figure is?

 

Some courts are issuing their own directions for the parties to inform the court of the initial calculations so that the court can then consider, and where appropriate, apply, proportionality and give a final, proportionate, figure.

 

However no provision whatsoever is made in the Civil Procedure Rules; they are simply silent on this point.

 

Master Gordon-Saker, Senior Costs Judge, commenting on Simon Gibbs blog, suggests:-

 

“There is no reason why, on provisional assessment under the new proportionality rule, the court cannot endorse the bill: “Provisionally assessed. If the costs allowed exceed £x (the proportionate amount of costs) they are limited to that sum.””

 

He added:-

 

“I usually provisionally assess the receiving party’s costs of the assessment as part of the provisional assessment. If there is no argument that the receiving party is entitled to costs, the job is done. If there is an argument, because the receiving party has failed to beat a Pt 36 offer, the pp can write in and ask for a different order.”

 

I hope all courts will adopt this sensible and clear advice. The common sense that emanates from the SCCO is such that maybe they should try all cases on all matters, rather than just dealing with costs.

 

In Mehmi v Pincher 20 July 2015 Liverpool County Court Unreported

 

HHJ Wood held that a decision on the papers in a Provisional Assessment was not a sanction but a judicial determination.

 

Consequently an oral review was possible and thus here the receiving party was entitled to such an oral review where the Regional Costs Judge could decide whether the assessment remained valid.

 

The judge also held that an oral review of a Provisional Assessment was not akin to an appeal, where there were restrictions on the admission of fresh evidence, but rather was a new hearing where new evidence could be produced.

 

Here the Costs Judge had assessed costs at nil due to the receiving party’s failure to produce the necessary documents under Practice Direction 47.13.2, here a Conditional Fee Agreement.

 

On appeal the judge said that there is a typographical error in the wording of Form N258 – Request for Provisional/Detailed Assessment – which might have misled lawyers into thinking that it was not necessary to file the Conditional Fee Agreement or other retainer.

 

PART 36

Proportionality does not apply where a claimant beats its own Part 36 offer as costs are then awarded against the defendant on the indemnity basis for the period after the expiry of the offer and proportionality does not apply to indemnity costs.

WITHIN BUDGET

 

Proportionality can still be a major issue even if the successful claimant comes within budget. If the budgeting judge has allowed a budget as proportionate because the claim is put at say £1 million, but subsequently turns out to be worth say only £200,000.00, then that which was proportionate may properly be judged to be disproportionate.

INTERIM COSTS ORDERS

In Rallison v North West London Hospitals NHS [2015] EWHC 3255 (QB)

the High Court ordered the defendant to pay £306,763.00 on account of costs, which was less than 30% of the claimant’s costs claim of £1.1 million but the judge did not consider that claim to be proportionate.

The decision is a reminder that determination of the sum to be paid on account of costs under CPR 44.2(8) involves consideration of proportionality.

In Capital for Enterprise Fund AP v Bibby Financial Services Limited, Chancery Division, Manchester 18 November 2015

the defendant had greatly exceeded its costs budget.

The Judge ordered an interim payment of 70% of its costs budget, not the amount claimed and rejected the defendant’s submission that he should take in to account additional costs incurred by the defendant in relation to which they had not sought an increase in the budget.

 

 

READER COMMENTS:-

 

Proportionality:- Has One Judge Had Enough?

 

Hxyay’s comment on 6 November 2015:-

 

He recognised that some work or fees incurred were reasonably incurred but they should not be paid by the defendant. So who pays them?

 

If there is ATE the case has “won” so there is no pay out. If the claimant has to pay it that will reduce damages (possibly leaving them with nothing) and may also lead to a negligence claim against their solicitor.

 

Do we now need standard phraseology?

 

‘The opinion is necessary but even though it be necessary and/or reasonably obtained you may be liable to pay the expert’s fee in the event that you win but a judge rules that your opponent does not have to pay it.’

 

And by the way the expert’s fee is around £2k and our costs will be £1,500 dealing with it so you might get nothing at all…

 

Or do the claimant’s solicitors take the hit?

 

Kerry’s reply:-

 

Quite. Proportionality is utterly meaningless. Fixed Costs and/or contingency fees achieve certainty, albeit not without problems. Proportionality, by contrast, is fluid and subjective – a moveable feast , or perhaps a moveable famine.

 

Kerry

 

 

Ed Lyons’ comment on 5 November 2015:-

 

The more the successful party is unable to recover his costs from the other side the greater is the argument to do away with costs orders and leave each party to pay their own costs via a contingency fee arrangement . It must therefore follow that there should be reform of the Law of quantification of damages.

 

Kerry’s reply:-

 

I agree. Let us adopt the US system of out and out contingency fees and jury trials in civil cases to ensure that all citizens receive a fair trial and fair compensation.

 

Kerry

 

Julian Evitts’ comment on 6 November 2015:-

 

I am restoring a defendant company. The Central London County Court, who now deal with restorations, do not answer the phone, nor do they reply to emails. They are also rejecting applications arbitrarily for nonsensical reasons and not approving applications by consent until very close to the date for the restoration hearing.

 

In my case the restoration hearing was today. As of yesterday we hadn’t heard from the Court so we arranged for (very cheap junior) counsel to attend.

 

This morning we received the sealed order from the Court in the DX. The Court had made the order on the papers on Tuesday. I now have counsel wanting paying at least part of their fee for pulling the instructions on the morning of the hearing.

 

All of this work, including counsel’s fee was necessary. The claim couldn’t continue without it. The claim is probably worth £5000 – £10,000 so the costs will exceed the damages. Presumably there is a chance that a judge will now not allow my counsel’s fee from today, despite this being necessary (and incurred as a result of the uselessness of the Court). How can this possibly be fair?

 

Similarly, I am a Grade A fee earner. Presumably now every defendant is going to be wanting to cut my rate to Grade C in every case.

 

 

Kerry Underwood’s reply:-

 

Quite. Cutting bills would be much more palatable if we had a Rolls Royce court system where parties could do the job with the minimum work necessary. Yet the court system is falling apart- it is not the fault of the staff- it is the low pay, cuts and low morale caused by widespread court closures with more to come.

 

As a society we are entering dangerous territory. No court access = no rule of law= civil disorder as the President of the Supreme Court has pointed out.

 

Kerry

 

Hastanton’s comment on 6 November 2015:-

 

In the words of Charkes Dickens , the law is an ass

 

Kerry Underwood’s reply:-

 

But without law there is anarchy. More those who prepare reports who are the asses.

 

Kerry

 

Mac McCaskill’s comment on 6 November 2015:-

 

Thanks for an excellent post. As ever, full of helpful detail and comment.

There are often complaints that this or that measure “restricts access to justice”, and it usually means “access to justice for claimants”. However, defendants (and even their insurers!) are also entitled to access to justice.

I thought proportionality was intended to avoid a situation where the prospect of disproportionate costs could “bully” a party out of pursuing/defending a legitimate case.

 

Kerry Underwood’s reply:-

 

I do not disagree. The problem with proportionality is that no-one knows how any particular judge will apply it. Does it mean no more than 300% of damages as here? Or 100% or what? Fixed Recoverable Costs introduce certainty for both sides.

 

Kerry

 

David Simpson’s comment 6 November 2015:-

 

If we cannot recover reasonable and necessarily incurred costs from a wrongdoer in order to achieve justice for a wronged person then the law is an ass.

 

Kerry Underwood’s reply:-

 

I agree and I believe the assessment procedure gives judges all the control that they need and that proportionality brings nothing to the party except confusion, uncertainty and unfairness.

 

Kerry

 

 

But with fixed costs you know in advance what you will get and the matrix punishes non-settlement. It works very well, provided the figures are reasonable, which current ones are.

 

Kerry

 

Sue King’s comment on 6 November 2015:-

 

Kerry

I would like to thank you for, yet again, another informative and interesting blog. I am very grateful to you for bringing these cases to our attention. In particular the information in this article has helped me enormously in being able to bring home to my principal that gone are the days when we can recover £20, £30, £40k worth of costs for extremely low value, non fixed costs pi cases some of which we still have in the system and to stop being so ready to rush off to provisional assessment. I haven’t done too badly so far in my judgment of settlement offers and have only been beaten once on a provisional assessment. However it is becoming more and more of an uncertain art isn’t it!

Sue

 

Kerry Underwood’s reply:-

 

Many thanks for your kind remarks. You are right in your analysis of the current situation. One of the problems with clinical negligence is the NHSLA. Few insurers are as difficult or obstructive as the NHSLA. This makes it difficult to know whether the costs were hugely inflated or problems were caused by the NHSLA. A combination of both I suspect. I would certainly not be happy about one of my firm’s files going to assessment if I was claiming 10 x the settlement amount.

 

Worth bearing in mind that absent proportionality the Master allowed £11,000 plus VAT for a £3,500 claim.

 

Also worth bearing in mind this settled pre-issue. Quite how you do that much work without issuing is a mystery to me, and presumably to Master O’Hare.

 

Kerry

 

Rob Carter’s comment on 6 November 2015:-

 

A test that trumps reason works only to reduce costs and will only (if ever) be comprehensible after a smorgasbord of Appeals on different topics allows its reasoned application, must fall foul of some basic consumer legislation provisions for Court fee payers?

 

Kerry Underwood’s reply:-

 

All the powers are there in primary legislation. Enforced by secondary legislation so judges could declare them non Article 6 compliant, but it is those same judges applying proportionality.

 

Think that is a non-starter.

 

Kerry

 

Root’s comment on 11 November 2015:-

 

It so saddens me that it has taken nigh on 15 years for the full implications of the innocuous words which crept into the over riding objective during the Woolf reforms to begin to sink in.

 

Kerry Underwood’s reply:-

 

They just don’t think things through anymore.

 

Robert Pettitt’s comment on 19 November 2015:-

 

And car insurance has gone up, on average, in the last year by +9% and the IPT incrase is far lower.

 

So the publically popular reason for reforming CFA funding (that your premiums will go down) has died quickly.

 

Insurer lobbying a glorious success?

 

Kerry Underwood’s reply:-

 

Worth remembering too that whole point of Jackson Reforms was to reduce costs, yet courts now swamped with litigants in person who cannot afford legal costs, court fees have gone up 600% in some cases, employment tribunal fees have led to 80% reduction in claims.

 

All the reforms, except fixed costs – a previously unimplemented Woolf Reform – have been a disastrous failure.

 

Kerry

 

Proportionality: The Emperor’s New Clothes:-

 

Dominic Cooper’s comment on 26 February 2015:-

 

One thing I have never understood, is if CPR 44.4(3) (b) to (g) set out the circumstances to which the court will have regard when assessing costs, why they are invariably all ignored and the sole consideration appears to be that set out in 44.4(3)(f) – the time spent. The practice forms, the standard form of bill of costs, costs budgets and summary assessments are all calculations based on time spent.

 

I recall attending one of your seminars many moons ago Kerry, where you pointed out the fallacy of “time spent”. A client calls you for an important contract. You drop everything and spend two days drafting it. You produce it and charge £1,500 plus VAT based on the time spent. The next day, by bizarre co-incidence, a different client calls and want the self-same contract to be drafted. Would you charge £20, on the basis that you are just printing out the same document?

 

I think that if a court considered proportionality in accordance with all the other factors (i.e. importance to the parties, skill and responsibility accepted by the lawyers, *duration of the case* rather than time spent) and combined that with costs budgeting – along the lines of “I think this matter would justify a client spending £x on it for the following reasons” then I would think it may work.

 

But every costs budget I have been involved with has been nothing other than a summary assessment in advance. Nothing more, nothing less. I once made the mistake of agreeing an opponent’s costs budget, and thinking that I ought to be reasonable. Never again!

 

I load it with everything imaginable. Plus the kitchen sink. Refuse to agree opponent’s. They refuse to agree mine. Then the DJ reduces the hourly rates to the 2010 guideline rates, and knocks 20% of the time spent. And occasionally says that a lower grade of fee earner should do certain things (like trial bundles, even though the practice direction states that it is the conducting fee earner’s personal responsibility to the court to ensure they are done). And that’s it. Total waste of time.

 

I do a fair number of “small” claims (i.e. under £10,000 which is not small by anybody’s standards). We charge the client a fixed fee for each stage (e.g. per witness statement, for managing the case, for filing questionnaires, for representation, etc.). We agree what we consider reasonable. The client knows what it is and knows whether it is “proportionate” or not. It’s none of the court’s business what we charge. No assessment. No time wasting. No need to justify whether it was reasonable for a Grade B fee earner to call the court listing office or not. I think in reality this is the way forward. No inter partes costs recovery (other than disbs, and if one party has been wholly unreasonable).

 

This post has ended up longer than I anticipated! Rant over.

 

Kerry Underwood’s reply:-

 

I agree entirely with you concerning the obsession with the time spent on a case.

 

You are right in saying that generally proportionality is being considered only in relation to time spent and costs rather than the other factors that you mentioned and which should be taken into account.

 

You are also correct in saying that for all intents and purposes the costs budgeting exercise is summary assessment in advance; indeed if you look at the detail of the decision in CIP Properties v Galliford Try Infrastructure Ltd [2015] EWHC 481 (TCC) that amounts to summary assessment of costs incurred to date.

 

That case is interesting; the judge recognised that by effectively capping the costs at a figure he thought reasonable he was not guaranteeing that the claimant would get that sum as the paying party could attack that figure in relation to the individual items and thus reduce it to a sum below what the judge thought was reasonable and proportionate.

 

The compromise that he arrived at is creative, but in my view of doubtful legality, although arguably it is sanctioned by the Practice Direction, also of doubtful legality in my view.

 

3EPD.2 reads:-

 

“2.4. As part of the costs management process the court may not approve costs incurred before the date of any budget. The court may, however, record its comments on those costs and should take those costs into account when considering the reasonableness and proportionality of all subsequent costs.”

 

Quite clearly the message is, as you correctly say, that you should never agree an opponent’s costs budget.

 

I also agree with you that the way forward is contingency fees with no recoverable costs and we are clearly moving that way.

 

Many thanks for commenting. We will get there in the end!

 

Kerry

 

 

Advertisements

Written by kerryunderwood

November 27, 2015 at 8:02 am

Posted in Uncategorized

3 Responses

Subscribe to comments with RSS.

  1. […] Proportionality: The Emperor’s New Clothes […]

  2. […] This write up is now included in my detailed blog on this subject: Proportionality: The Emperor’s New Clothes. […]

  3. […] Proportionality: The Emperor’s New Clothes […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: