Finglands Coachways Ltd v O'Hare

Under the pre-2013 Civil Procedure Rules 1998, proportionality may be assessed both globally and item by item. A costs judge may find particular items disproportionate and apply the stricter requirements of necessity and reasonableness, even where the bill as a whole appears proportionate. The usual approach under Home Office v Lownds remains applicable, but its reference to what is “normally required” does not create an inflexible rule. Costs judges have a broad discretion and appellate intervention is limited.

The defendant in a substantial personal injury claim obtained an order for its costs after the claimant discontinued shortly before trial. At detailed assessment, the District Judge reduced the defendant’s bill from £60,101.80 to £37,803.89 plus interest, scrutinising individual conferences, attendances, document work and expert fees.

The defendant argued that the District Judge had wrongly applied necessity rather than reasonableness because the bill had not been found disproportionate overall. It also challenged the assessment of particular items. The issues were whether item-by-item proportionality and necessity could be considered under the pre-2013 rules, and whether the District Judge had exceeded his discretion.

1. The application for permission to appeal and the appeal were dismissed. The applicant was ordered to pay the claimant’s costs of the appeal.
2. Under rule 44.4(2) of the old Civil Procedure Rules 1998, the court could disallow disproportionate costs of its own initiative. Proportionality was not confined to the bill viewed globally. A particular item could be disproportionate even where the total bill appeared proportionate.
3. Home Office v Lownds established a two-stage approach. The global assessment indicates whether the total costs appear disproportionate. If they do, each item must be necessary and reasonable in amount. If they do not, each item will normally need only to have been reasonably incurred and reasonable in amount. The word “normally” leaves room for item-by-item consideration of proportionality and necessity.
4. Giambrone v JMC Holidays Ltd materially supported that conclusion. Its observation that an apparently proportionate bill did not prevent particular items being subjected to the dual test was obiter, but was not disapproved in Motto & Others v Trafigura Limited & Another.
5. The District Judge’s references to necessity and need were properly understood in context as inquiries into justification and proportionality. He repeatedly applied the test of reasonableness and confirmed that this was his approach. He therefore did not misdirect himself.
6. The challenges to individual allowances did not meet the high threshold for appellate interference. Costs judges are entitled to draw on their experience and have a generous ambit of discretion. The appeal is not a rehearing. In relation to the expert’s fees, the absence of an adequate breakdown meant that doubts as to whether the fees were reasonably incurred or reasonable in amount were resolved in favour of the paying party under rule 44.4(2)(b).

• District Judge: District Judge Iyer assessed the defendant’s costs at £37,803.89 plus interest on 2 May 2013.
• High Court (Queen’s Bench Division): HH Judge Platt initially struck out the appeal as late. Turner J later granted relief from sanction.
• High Court (Queen’s Bench Division): Mr Justice Cranston dismissed the application for permission to appeal and the appeal itself, with costs payable by the applicant.