Pressure on Litigation Costs from Proportionality

by Mark Studdart on November 15, 2016
Mark Studdart

Mark Studdart

New rules on the losing side paying the costs of the winning side in litigation can leave “winners” significantly out of pocket.

If you sue someone, and win, it is normal practice for your lawyers to ask the court to require the losers to pay for your costs in the action. A recent high profile case has shown, however, that you may not be awarded all, or even the majority, of your costs. The musician Brian May sued his neighbours over a three year programme of noisy basement development. He won and was awarded £25,000 in compensation. He then requested, and was granted, his costs of more than £200,000. The other side objected. At this point the courts decided that Mr May’s costs were unreasonable, so they were reduced to less than half. Then the new rule of “Proportionality” was applied, which dictates that if the costs are much higher than the damages, they must be reduced to be “in proportion”. So Mr May ended up with about £67,000 (including the compensation) as compared with the £208,000 that he spent on the case.

In another example, a national newspaper settled a privacy claim with a primary school teacher for £20,000. After the proportionality rule had been applied to her application for costs, however, she was awarded £80,000 in costs, as compared to the £240,000 that her legal advice and support had actually cost.

Mark Studdart, a litigation solicitor in Kidd Rapinet’s Aylesbury office said, “It would appear that the new proportionality rule is aimed both at reducing the costs of litigation and encouraging the use of alternative dispute resolution mechanisms”.

If you would like assistance in relation to a neighbourhood or other dispute, call Mark Studdart at Kidd Rapinet on 01296 432541 for further information.