Proportionality is there, and it is staring us in the face. It is popping up left right and centre in unenthusiastically titled emails, articles and newsletters. Some optimistic decisions would be most welcome wouldn’t they? Alas it seems we have recently become more accustomed to the doom and gloom. MRN’s job is of course to maximise your profit costs and that includes advising on any proportionality concerns as early as possible. The buck doesn’t stop there I am afraid, for want of a better phrase. In a commercial claim there is a clear responsibility upon you to ensure that your client is alert to proportionality and the detrimental effect that the notion may or may not have upon them down the line.
Let us distinguish the commercial client from any other. You may be in a position whereby you invoice your commercial client periodically for work undertaken as the case progresses, and therefore you are paid regularly for work undertaken and, crucially, paid in full and in any event. Let us say that by the conclusion of a successful claim you have invoiced your client and been paid the total sum of £350,000.00 in costs. You succeed in obtaining a costs order in your favour, an inter partes Bill is drafted and served. Points of Dispute are served followed by Replies with the matter being set down for detailed assessment. Nothing unusual here. Of course if you have appointed a well-versed “costs bod” (ahem) then you will already have been advised on recoverability, the risk of an adverse proportionality finding and you will have been in a position to advise your client accordingly already.
“Explain to your clients the importance and potential consequences of proportionality and more importantly of disproportionality.”
To the commercial firm who do not have an experienced “costs bod” on board (you know better of course), the Court then makes a finding of disproportionality which neither you or your client were expecting, and your costs take a hammering (to quote Master Rowley) with both “a broad sword and a rapier” and your client achieves £150,000.00. Did you advise your client on proportionality? Were they made aware that the amount of updates they requested of you, the costs that were incurred as a result of said updates, may not be recovered at all upon successful conclusion? Were they made aware that in such circumstances they could expect merely a contribution (sigh) to the costs that they have already paid for in full? Are you opening yourself up to a potential claim in professional negligence?
Apologies for turning into one of those doom and gloom articles that I have sought to condemn. You are unlikely to find yourself in this position, as you already utilise the services of the very best of costs bods. In any event, a word of advice: advise. Explain to your clients the importance and potential consequences of proportionality and more importantly of disproportionality. Seek the input of MRN in your case in real time, as it progresses. Avoid the doom and gloom. Bring on the sunshine.