7th November 2017
Simon Browne QC and James Laughland, instructed by Atkins Thomson, have succeeded in persuading the Court of Appeal (the Master of the Rolls, with Longmore LJ and Irwin LJ) that the Senior Costs Judge was wrong to hold that the new test of proportionality applies to still recoverable additional liabilities.
The Court of Appeal has unanimously held that the saving and transitional provisions in CPR 48, combined with the more limited definition of “costs” applicable since 1 April 2013 (that now omits any reference to “additional liabilities”), together operated to preserve the former Costs Rules, with their attendant Practice Directions, to the assessment of costs that include additional liabilities.
MGN’s argument that the new proportionality test applied as success fees and ATE premiums could be regarded as “fees” and “expenses” (terms that do appear within both the former and current definition of “costs”) were rejected. Likewise, comparison with the provisions within CPD 48 applicable to the new form of ATE premiums recoverable in clinical negligence proceedings was regarded as unhelpful.
The Court held that the Senior Costs Judge had been wrong to hold that if any exception from the new proportionality test was to be maintained for additional liabilities then that could have been provided for by further exception with CPR 44.3(7). That section uses a definition of costs that no longer makes reference to additional liabilities. He had also been wrong to hold that the former test of proportionality (old CPR 44.4(2)) was not a provision relating to funding arrangements, the term used with paragraph 1.4 of CPD 48.
The Court’s judgment does not, however, provide guidance of wider application on how the new test of proportionality is to be applied in practice. Not only does the issue of proportionality now have to be reconsidered by the Senior Costs Judge but MGN succeeded in their cross-appeal that had challenged his decision to regard as reasonable the Claimant’s decision to issue proceedings without any prior warning or contact with the Defendant; something she had done as part of her pre-issue application for anonymity.
The Court of Appeal held that the Senior Costs Judge had not sufficiently made clear what, if any, weight he had attached to certain criteria relevant to this point and thus directed him to reconsider the issue in the light of their further guidance. Accordingly, much of the base costs remain again at large and must be determined before proportionality is applied to base costs and additional liabilities separately.
A copy of the judgment can be accessed here.