Litigators may face a tough new rule on the ‘proportionality’ of their costs that could fuel satellite litigation and uncertainty, experts warned last week.

Nicholas Bacon QC, a member of both the Civil Procedure Rules committee and Civil Justice Council group dealing with implementation of the Jackson reforms, said that a number of options were available to deal with Jackson’s proposals on proportionality, which are intended to ensure that costs do not outweigh the sums at stake.

Bacon, speaking in a personal capacity, said he believed that a rule would be introduced departing from the current case law which allows judges to take an initial ‘global approach’ to the proportionality of costs, before conducting an item-by-item examination. If the initial global test points to disproportionality, each individual item must be considered  'necessary', not just 'reasonable', under current rules.

Bacon said: ‘The likelihood is that there will be a change in the test that runs along the principle that you look at reasonableness and necessity on an item-by-item basis, and after that you have a longstop, whereby the judge can disallow further costs.

‘If that’s the case, there will be a much tougher test on proportionality. There is a discussion that the longstop should only apply in rare and exceptional cases.’

Bacon, speaking at a LexisNexis costs conference, added: ‘If a longstop rule comes in, it is inevitable that you will have arguments about costs. There are going to be lots of test cases, and great uncertainty.’

Senior costs judge Master Haworth said that Jackson’s proposals on proportionality were ‘another recipe for satellite litigation’.

He noted that while the so-called ‘costs war’ had currently proceeded toward an ‘amicable truce’, the Jackson reforms were likely to lead to ‘new skirmishes’.