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Latest Proportionality Ruling – May & May v Bizarri & Wavell Group Plc – a ‘Breakthru’ in the ongoing saga of proportionality decisions?
Some 18 months ago, we reported the decision of Master Rowley in respect of proportionality which had very considerably disappointed Queen guitarist, Dr Brian May, and his wife, Anita Dobson, following a claim made by them against a neighbour who had decided to excavate and develop a two-storey basement. The works, carried out by the Defendants, Wavell Group Plc and its owner, Farid Bizarri, had continued for three years, causing the Claimants considerable disruption, disturbance and distress. They were ultimately successful in the substantive claim, receiving £25,000.00 in respect of damages, and consequently presented a Bill of some £208,000.00, however this is where their successes ended.
Upon the assessment, Master Rowley reduced the costs on an item by item basis to £99,655.74, and thereafter, applying the second stage of the current proportionality test and remarking that
“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.”
and thereafter reduced the costs further to just £35,000 plus VAT in recoverable costs.
The Mays were, naturally, extremely disappointed that such a great proportion of their incurred costs had bitten the dust, with Dr May remarking in The Times that the ruling made a “…mockery of justice…” and argued that “…it’s likely to make it almost impossible for the man in the street to fight back for justice against the bullies who trample all over him”.
Keen to break free of the ruling, the Claimants appealed (it should be stressed not the item-by-item element, but only the second-stage proportionality decision; they didn’t want it all) contending that the Master has misdirected himself and misapplied the appropriate test and, this week, the decision (yet to be published) was handed down by His Honour Judge Dight.
Sitting with Master Whalan as assessor, HHJ Dight found that the new proportionality test had been misapplied and was not a “blunt instrument” as the Master had considered, noting
“The rules, difficult as they may be to apply in practice, require the specific factors in CPR 44.3(5) to be focused on and a determination to be made as to whether there is a reasonable relationship between them.
“I doubt that the rules committee intended that a costs judge could or should bypass an item-by-item assessment and simply impose what he or she believed to be a proportionate global figure.
“In my judgment, the tests of reasonableness and proportionality are intended to work together, each with their specified role, but with the intention of achieving what is fair having regard to the policy objectives.”
Whilst acknowledging that there was “…very limited authoritative guidance,,,” on the way in which the test should be applied “…such that there is does not all appear to lead in the same direction…”, he continued
“In my view, the new rules intended a fresh start. It seems to me that one has to go back to the wording of sub-rule 44.3(5) and reach a judgment as to the amount of costs whose relationship with all the factors identified in that sub-rule is a reasonable one.
“Whether the relationship is reasonable is, in my view, a matter of judgment, rather than discretion, and, as I have said above, requires a costs judge to attribute weight, and sometimes no weight, to each of the factors (a) to (e).
“Further, it seems to me that the word proportionate is intended to have a consistent interpretation across rule 44.3(2), rule 44.3(5) and 44.4, which means that in considering proportionality, the court is to have regard to all the circumstances (see CPR 44.4) which includes, but is not limited to, the further factors specified in CPR 44.4(3) even though they are not specifically referred to in CPR 44.3.
“There is a considerable degree of overlap but the plain intention is that there should be a holistic approach; the costs judge is intended to stand back and look at the overall picture.”
Taking a critical view of the Master’s ruling, concurring with the Claimants, HHJ Dight noted that
“In particular, [Master Rowley] undervalued the sums in dispute, by a considerable margin in county court litigation, and he gave too little weight to the complexity of the litigation. Further, he reduced the costs disproportionately because of early settlement.”
adding that
“…an objective assessment and an objective balance to be undertaken in respect of them with a view to achieving the policy objectives of compensating the receiving party for his expenditure but not requiring the paying party to pay more than the litigation warranted.
“I reiterate that what the rules require the judgment to achieve is a balance, a reasonable relation, a correlation which may necessitate a certain amount of fine tuning.
“There may be a limited range of acceptable difference in the total figure once the rules have been applied, in that different judges could legitimately come to slightly different conclusions as to the proportionate sum, and so long as they have applied the rules correctly they should not be open to challenge on appeal.
“However, the final figure in this case does not appear to be based on any specific mathematical calculation nor is there a specific explanation of how the weighting of the various factors resulted in the final figure.”
Accordingly, as a consequence of his findings in respect of the Master’s ruling, HHJ Dight more than doubled the amount allowed to £75,000.00.
This ruling will, hopefully, mark at least the beginning of the end of the uncertainty which has existed over the last more than 18 months in respect of proportionality. Whilst uncertainty will, of course, still exist as any decision on proportionality will remain a subjective approach for any Costs judge, doubtless Dr May was quietly humming “You’re my best friend” after receiving the news from his legal team!