Judges are quick to slash down bills, but we still don’t know what proportionality really means.
Last week we had yet another warning from the courts that judges will not tolerate what they consider to be excessive legal costs.
In Savoye and Savoye Ltd v Spicers Ltd, Mr Justice Akenhead took an axe to a legal bill of more than £200,000, chopping it down to £96,465 on the basis that the time spent and amount claimed were ‘disproportionate’.
Back in December, Mr Justice Holman was ‘flabbergasted’ at the way costs were mounting in a case in the family courts, stating that he found the amount of money the parties had spent on litigation since the end of their relationship ‘truly absurd’.
Also at the end of last year, in another family case, Mr Justice Mostyn let rip over the ‘grotesque leeching’ of costs by a divorcing couple.
Granted, some legal bills are so wildly over the top compared to the sum at stake that it is easy enough to agree that they are disproportionate. But take, for example, the Savoye case mentioned above. Where the amount claimed is £900,000, is a legal bill of £200,000 actually disproportionate? It is less than 25% of the sum claimed.
To my mind, the reason why the costs in this case were reduced was more about whether or not the hours billed were reasonable and necessary (especially given that the court case was a re-run, in greater detail, of a previous arbitration) than it was about whether they were proportionate to what was at stake.
These High Court judgments are all well and good, and no doubt highly effective at putting the frighteners on lawyers. But what we still don’t have yet is a definitive ruling from the Court of Appeal, with proper, binding, guidance on how the new proportionality rule should operate. Clients, lawyers and even the judiciary are still in the dark as to how the rule should be applied to different cases.
That means it essentially comes down to a ‘gut feel’ judgement call, to be made by each individual judge in each individual case, according to the facts in front of them, the issues raised, and what side of the bed they got out of that morning.
Rachel Rothwell is editor of Litigation Funding magazine