The respondent had been ordered to pay costs of over pounds 16,000 in an action for clinical negligence where the final award was only pounds 4,000. The Secretary of State appealed claiming that the costs were disproportionate.
Held: In such cases the court must undertake a two stage examination. First it should look at the proportionality of the claim, making allowance for the amount which might reasonably be thought could be awarded. If the overall amount was then seen as disproportionate, the court should look at each item claimed, and ask whether the work undertaken was necessary. If so, then the principle of proportionality need not override proper claims for payment. ‘what is required is a two-stage approach. There has to be a global approach and an item by item approach. The global approach will indicate whether the total sum claimed is or appears to be disproportionate having particular regard to the considerations which Part 44.5(3) states are relevant. If the costs as a whole are not disproportionate according to that test then all that is normally required is that each item should have been reasonably incurred and the cost for that item should be reasonable. If on the other hand the costs as a whole appear disproportionate then the court will want to be satisfied that the work in relation to each item was necessary and, if necessary, that the cost of the item is reasonable. If, because of lack of planning or due to other causes, the global costs are disproportionately high, then the requirement that the costs should be proportionate means that no more should be payable than would have been payable if the litigation had been conducted in a proportionate manner. This is turn means that reasonable costs will only be recovered for the items which were necessary if the litigation had been conducted in a proportionate manner’
The court adopted the following: ‘In modern litigation, with the emphasis on proportionality, there is a requirement for parties to make an assessment at the outset of the likely value of the claim and its importance and complexity, and then to plan in advance the necessary work, the appropriate level of person to carry out the work, the overall time which would be necessary and appropriate spend on the various stages in bringing the action to trial and the likely overall cost. While it was not unusual for costs to exceed the amount in issue, it was, in the context of modest litigation such as the present case, one reason for seeking to curb the amount of work done, and the cost by reference to the need for proportionality.’
Lord Woolf, Lord Chief Justice, Lord Justice Laws and Lord Justice Dyson
Times 05-Apr-2002, Gazette 10-May-2002,  EWCA Civ 365,  1 WLR 2450,  CPLR 328,  CP Rep 43,  2 Costs LR 279,  4 All ER 775
Civil Procedure Rules 44.5(3)
England and Wales
Cited – Sinclair Roche and Temperley (A Firm) v Somatra Ltd (Damages) CA 23-Oct-2003
The ‘Somatra’ was lost at sea. The insurance claim had been refused on the basis that the ship was unseaworthy. The owners came to instruct the appellant solicitors to represent them in the insurance claim. Having lost confidence in the solicitors, . .
Cited – Hosking v Michaelides and Another ChD 28-Nov-2003
Permission to appeal is required against a summary assessment of costs. The correct approach was set out in Lownds. Here, and although the registrar had not followed the recommended two stage approach, the result was reasonable. . .
Cited – A B and others v Leeds Teaching Hospitals NHS Trust QBD 9-May-2003
The claimants were involved in a group litigation with regard to the removal of organs without consent from deceased children. The defendant sought an order capping the costs which might be claimed.
Held: In GLO cases the desirability of . .
Cited – Reed Executive Plc, Reed Solutions Plc v Reed Business Information Ltd, Reed Elsevier (Uk) Ltd, Totaljobs Com Ltd CA 3-Mar-2004
The claimant alleged trade mark infringement by the respondents by the use of a mark in a pop-up advert.
Held: The own-name defence to trade mark infringement is limited. Some confusion may be allowed if overall the competition was not unfair . .
Cited – Ross v Stonewood Securities Ltd ChD 7-Oct-2004
The claimant appealed an order reducing his award of costs. . .
Cited – Simms and others v The Law Society CA 12-Jul-2005
The appellant challenged intervention proceedings brought against his solicitors practice by the respondent. Following disciplinary proceedings, the Society had obtained summary judgment rejecting the application, and awarding costs. The solicitor . .
Cited – Campbell v MGN Ltd (No 2) HL 20-Oct-2005
The appellant sought to challenge the level of costs sought by the claimant after she had succeeded in her appeal to the House. Though a relatively small sum had been awarded, the costs and success fee were very substantial. The newspaper claimed . .
Cited – Sheffield Wednesday Football Club Ltd and others v Hargreaves QBD 18-Oct-2007
The defendant operated a web forum in which posters posted defamatory messages about the claimants. The claimants sought an order disclosing the contact details of the members of the forum. The owner of the forum said he had undertaken not to . .
Cited – Drew v Whitbread CA 9-Feb-2010
The personal injury claimant sought to raise on taxation, matters not put to the trial judge when making the costs order. The personal injuries case had been allocated to the multi-track. The judge at trial had awarded costs on the standard basis, . .
Cited – Coward v Harraden QBD 2-Dec-2011
Parties had fought each other in wide ranging litigation. The claimant found covert surveillance devices in his home, and discovered evidence that the defendant may have information as to who had placed them. Earlier orders had been made for the . .
Cited – Brook v Reed CA 25-Mar-2011
The court was asked ‘What relation should the costs and remuneration bear to the circumstances, and in particular the size, of the bankruptcy?’ The bankrupt had considered that the costs first awarded to the trustee in bankruptcy and the trustee’s . .
Cited – Coventry and Others v Lawrence and Another SC 22-Jul-2015
The appellants challenged the compatibility with the European Convention on Human Rights of the system for recovery of costs in civil litigation in England and Wales following the passing of the Access to Justice Act 1999. The parties had been . .
Lists of cited by and citing cases may be incomplete.
Updated: 18 December 2021; Ref: scu.170081