New rules on proportionality will remove much-needed visibility
This article was first published by Solicitors Journal on 10 July 2012, and is reproduced by kind permission from solicitorsjournal.com
Bob Hope once said “you know you are getting old when the candles cost more than the cake”. Lord Neuberger did not - disappointingly - paraphrase Bob Hope in his recent lecture on Jackson implementation but he had in mind something similar: when the costs of litigation outweigh the value, monetary or otherwise, of the litigation something has gone awry.
Necessity as an interpretation
Anyone who has been through a Lownds based preliminary issue on proportionality in costs proceedings will tell you that the current system does not work. Attempting to assess overall proportionality in a brief hearing without getting into the merits and what work was necessary is very difficult. It adds an extra hearing, and ironically therefore more cost, to the process. If a finding of disproportionality is made then the necessity test is not straightforward and can be difficult to balance with the still relevant concepts of reasonableness and proportionality. As Nietzsche said (and would presumably repeat if lucky enough to attend a detailed assessment hearing) “necessity is not an established fact, but an interpretation”.
Lord Neuberger expects the following:
- The Lownds test will be reversed so that the bill will be assessed on an item by item basis and only then, at the very end, will the final figure be weighed by the costs judge against the proportionality criteria;
- Necessity is likely to be jettisoned as a test, or at least firmly put in its place behind proportionality;
- The courts will, on a case-by-case basis, sort out the detail.
The abolition of the Lownds test is welcome as is the possible abolition of the necessity test. There was no sense in assessing proportionality before looking in detail at what work had actually been done and the necessity test was difficult to apply. However, my heart sinks at the prospect of going through every item line by line and then potentially seeing the bill slashed at the very end for seemingly arbitrary reasons. Currently at least one can see how an assessment is going at the halfway stage and project forward, as can your opponent, with that visibility making settlement possible. Under Lord Neuberger’s suggestions that will no longer be possible. It is to be hoped that the courts will see quickly that in litigation unpredictability is unhelpful.