Proportionality – Court hands down warning over disproportionate costs

Proportionality – Family Court hands down warning over disproportionate costs

The issue of proportionality has been at the forefront of costs since the inception of the CPR, but never more so than since the latest major reforms which came into force on 1 April 2013, with the inclusion of a reference to it within the most fundamental aspect of the rules, the Overriding Objective. Such inclusion therefore placed the imperative to conduct litigation “…at proportionate cost…” front and centre, with the intention that it should be of the greatest importance to litigants and their legal representatives.

It is, perhaps, therefore not surprising that where the courts see litigation being pursued without regard to proportionality, with its bolstered powers to case and costs manage, very strong warnings should be issued during the course of the litigation, and not just within the ambit of assessment, after the event.

In the latest example of pro-active costs management, Mr Justice Holman has given a stern warning to two litigants that if they chose to conduct litigation at disproportionate cost, they may ultimately have to reap the whirlwind which they have sown.

Conducting a Case Management Conference in the matter of EDG v RR (Rev 1) [2015] EWHC 3097 (Fam), a matter which involved a dispute over the level of maintenance payable from a father to a mother, both French nationals, where the mother lives in Paris with their 3 year-old child and the father lives and works in London, Holman J observed the underlying maintenance order to be

“…for about £10,000 a year…[offers having been made during the course of the day, the parties having been invited by Holman J to discuss the issues between them, such that the remaining]…dispute here between these parties…is now as to £4,000.

…there may be some dispute as to whether there are still any arrears depending on whether or not interest attaches. But even if there are arrears, they are, as I understand it, only of the order of £3,000 to £4,000.

However, in the conduct of the litigation to that point, the father having been representing himself and thus incurring no costs up to this hearing, at which he had finally instructed two counsel who had agreed to act without charge, thus his position remained, Holman J contrasted this with the mother’s position in which, to date, and

“…to get to this point and to achieve enforcement of arrears, the mother has already herself spent £30,000.

Expressing his considerable dissatisfaction with the costs being expended over a modest amount in dispute, Holman J noted

“Week after week, if not day after day, judges like myself see litigants spending completely disproportionate amounts of money on purely financial litigation. The tragedy is that any given couple or family tend only to experience such waste and folly on a single occasion, and if they learn the lesson at all, they learn it too late.

This case seems to me to be yet another example of parties who have allowed their litigation to become completely out of control and to lack any proportionality to the underlying sums in issue.”

“This is the point at which any person approaching this case with the least detachment, sense of reality or costs proportionality would ask how it is that these parties are still litigating against each other with such bitter intensity… To my mind, there is a total loss of costs proportionality in this case; and the idea of this mother coming over from Paris, as she has today and will have to again, and being locked in litigation with this father about these objectively small sums, is almost mind-boggling.”

This judgement once again re-enforces the necessity to ensure that any litigation is conducted with a clear and constant eye on the proportionality of continuing, and regularly reviewing expenditure. It is entirely conceivable that, whilst the courts are already actively costs and case managing matters, they will continue to be increasingly pro-active in doing so, and will not shy away from being critical of parties who either are, or are perceived to be conducting litigation at disproportionate costs, and that such criticism is likely to be reflected upon any allowances made on assessment.