In edition 143 of BC Disease News, we reported on the decision of BNM V MGN Limited [2016] EWHC B13 (Costs) in which the harsh impact of the post-Jackson proportionality rule was demonstrated after Master Gordon-Saker halved the costs of a privacy action that he had deemed reasonable after a line-by-line assessment.
Further details about this judgment can be found in edition 143 here. However, in short, the Master halved the claimant’s costs from the sought after £241,817 to £167,389. In addition to this he ruled that the proportionality test applied to additional liabilities (which are still recoverable in privacy actions) and these should be considered together with the base costs. However, he went on to look at the ATE premium of £58,000 separately and also halved that as a result of it being disproportionate, notwithstanding the fact he found the premium was set at a reasonable level.
This decision was heavily criticised by the ATE insurer, Temple Legal Protection (reported in edition 144 here), which said that the proportionality rule should not apply to those areas of litigation where additional liabilities are still recoverable. A representative of the firm stated:
‘My deepest concern is that this judgment will be used by well-resourced defendants, who
can afford not to recover all of their costs, to run up their legal spend knowing full well that
a claimant would not be able to match this and, therefore, could only recover a level of costs
in line with their damages. This flies in the face of the recent judgment in Miller v Associated
Newspapers Limited where the Judge found that ‘ATE provides a legitimate social purpose’
and that the ‘burden imposed by the ATE premium scheme is not so large and not so lacking
in appropriate controls as to amount to a disproportionate inference in their right to freedom
of expression’.
The proportionality test was introduced in 2013 without guidance, however, it has been announced that the decision in BNM, has been leapfrogged to the Court of Appeal to consider the application of the rule.[i] The appeal has been expedited and will be heard by two Lord Justices probablye before Christmas.
We will continue to report on the progress of this appeal and this will be accompanied by a feature article on proportionality.
[i] Neil Rose, ‘Proportionality Test Decision Leapfrogged To The Court Of Appeal’ (Litigation Futures 7 October 2016)< http://www.litigationfutures.com/news/proportionality-test-decision-leapfrogged-court-appeal> accessed 11 October 2016.