In the recent case of Reynolds v One Stop Stores Limited (unreported), an appeal in the County Court at Norwich and Cambridge, the Court gave further guidance of the approach to take to the issue of proportionality.
The claim for costs arose from an employer liability claim following an injury to the Claimant’s wrist in January 2012. A Notice of claim was submitted in November 2012, liability was admitted at an early stage and in November 2013 the Defendant made an offer of £35,000 which was rejected. In July 2014, proceedings were issued limited to £50,000. The matter was budgeted and as part of the Costs Management Order it was recorded that the totality of the Claimant’s budget “appears disproportionate”.
In April 2017, following numerous reports being obtained, the value of the claim was increased to £300,000. In due course, the matter was listed for a three-day trial in October 2017. At the door of the Court, the claim was settled for £50,000.
The assessment of costs was heard before District Judge Reeves in May 2018 when he offered the parties the option of considering proportionality on a line by line basis or following the line by line assessment. The parties agreed for proportionality to be considered following the line by line assessment. Upon completing the line by line assessment of incurred costs, and his review of budgeted costs (from which he did not depart), the District Judge reached a provisional figure of £115,906.09. He then heard submissions as to proportionality following which he considered the factors in CPR44.3 (5) and the costs were reduced to £75,000.
The Claimant duly appealed on four grounds:
1) When considering the sums in issue the Judge erred in only considering the level of the final settlement and not the sums in the Schedule of Loss of October 2017 (£174,975.60) and general damages.
2) The Judge had erred in finding the litigation not to be complex which it was asserted he should have due to the involvement of multiple experts.
3) The Judge had erred in not recognising that the claim had been prolonged by the conduct of the Defendant and had conversely considered the conduct of the Claimant’s conduct in relation to settlement as unreasonable.
4) The Judge had erred in not attributing appropriate weight to each of the five factors in CPR44.3 (5)
The Court found that:
Ground 1) Failed on the basis that the District Judge had considered the valuation placed on the claim by the Claimant and found it without merit. It was found that the district judge had “highlighted the settlement amount, because he regarded it, in all the circumstances, as reflective of an underlying reasonable valuation of the claim. He was also entitled to express his view that the claim had been overvalued, drawing as it did, on his reasoned appreciation of all the material before him, not just the amount of the settlement” (para 96).
Ground 2) At paragraph 97 of the appeal the Court gave guidance on the meaning of complexity: ““Complexity” is also an ordinary-language word, and not defined further in the rule. Once again, the Court should construe it objectively in the context of the purpose of the rule concerned. The Court should therefore consider it by reference to whether the litigation was complex, in ways that could reasonably be expected to have an impact on costs levels”. It was found that the District Judge had considered the underlying litigation and was fully aware that the medical evidence was disputed between the parties. As such, the issue of complexity had been fully considered and ground 2 therefore failed.
Ground 3) Failed on the basis that “In judging whether the criticism of the Defendant’s approach to settlement was well-founded, he was fully entitled to set that within the context of the wider conduct and evolution of the litigation”.
Ground 4) Failed on the basis that “DJ Reeves did not err in taking proportionality at the end, and in the round, nor in applying it to the whole of the provisional total, that is, to both incurred and budgeted costs. He did not fail to consider each of the 44.3(5) factors in turn, and he properly then turned to draw the threads together, coming to a decision on proportionality in the round”.
It was found that
“whilst the Court needs to consider the significance that it attaches to those factors that it finds are salient in the given case, and how they interact, it must do so in a qualitative or value-judgment sense. It is not required to do so by assigning each factor a precise numerical weighting, scoring it in some way, or performing any other kind of mathematical calculation. Further, where the Court is applying proportionality to a global provisional total, rather than to an individual element, it is bound, inevitably, to paint with a somewhat broader brush” (para 75).
This was a well-reasoned judgment on both the assessment and the appeal and illustrates clearly the Courts approach to dealing with proportionality at the conclusion of the assessment which is by its very nature a more broadbrush approach than would possibly be faced on a line by line assessment.