7 November, 2017
Judgement for the long awaited appeal of BNM v MGN has been handed down in the last hour with a success for the Claimant, BNM.
The Claimant has been successfully able to persuade the Court of Appeal that the Senior Costs Judge was incorrect to rule that the new test of proportionality applied to Pre-April 2013 additional liabilities.
What does this mean?
Whilst we know that there are fewer cases remaining involving Pre-April 2013 additional liabilities there are still a number of them, with this decision being vital in the recovery of those additional liabilities.
The Court of Appeal has decided that the Senior Costs Judge had been wrong to say 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 used a definition of costs that no longer makes reference to additional liabilities. The Court of Appeal also said it had 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 within paragraph 1.4 of CPD 48.
Subsequently, any cases involving Pre-April 2013 additional liabilities will have two proportionality tests applied to it. So those costs incurred Pre-April 2013 will have the “old” proportionality test applied to it, including the additional liabilities and those costs incurred Post-April 2013 will have the “new” proportionality test applied to it.
However, if anyone was expecting the Court of Appeal to provide greater guidance on how the new test of proportionality is to be applied then they are going to be greatly disappointed as there was no such guidance. However, the Senior Costs Judge will now reconsider the issue of proportionality and may (we live in hope!) provide further guidance when a conclusion is reached. To add further complications to this case the Defendant, MGN, have also succeeded in a cross-appeal relating to a decision to regard the Claimant’s decision to issue Proceedings without any warning to the Defendant as reasonable. Subsequently the Senior Costs Judge will consider this further in light of the guidance given. The reality is that whilst this is a hugely important decision for Pre-April 2013 additional liabilities, there are more twists and turns in this case still to go relating to the aforementioned points