The designated civil judge for Liverpool has handed down guidance on how judges should deal with costs claimed in flight delay claims brought under the European Small Claims Procedure (ESCP).
In Senior v Blue Air Management Solution, District Judge Baldwin found for the claimant, Peter Senior, over a delay in his flight from Rome to Liverpool, brought pursuant to European law on flight delays and under the ESCP. He awarded damages of £352.68 and assessed the claimant’s necessarily incurred and proportionate costs at £205, including an issue fee of £105. However, he gave no reasons for the costs decision, Mr Senior’s solicitors having claimed costs of £1,401.
On appeal, His Honour Judge Graham Wood QC, sitting in Liverpool with District Judge Jenkinson, a regional costs judge, as assessor, said he granted permission so that he could issue guidance on dealing with costs in ESCP cases, as this route has “the potential for more advantageous costs consequences” than pursuing flight delay claims under the CPR small claims process.
The ESCP regulation provides: “The unsuccessful party shall bear the costs of the proceedings. However, the court or tribunal shall not award costs to the successful party to the extent that they were unnecessarily incurred or are disproportionate to the claim.”
HHJ Wood expressed sympathy with judges undertaking airline delay cases “and the vast number of ESCP claims which must be approached in a timeous manner”, and acknowledged the difficulty in providing “anything but the most peremptory of reasons, especially, as here, where the claim is virtually undefended”.
But when proportionality was engaged as an issue, “the judge carrying out the assessment must be able to show that he has followed the approach advocated by Sir Terence Etherton MR in [West & Demouilpied]”, he said. In circumstances such as this, where there was a substantial reduction in the costs sought, “the proportionality exercise ought to be scrutable by a reviewing court”.
As a result, “it must now be considered that this short form of decision is unacceptable”. The appeal succeeded for lack of reasons, HHJ Wood said.
He remitted the case back to DJ Baldwin, but issued guidance on the approach to costs in ESCP claims. He said: “If a schedule of costs is provided, although I understand this is not always the practice, those costs should be considered first of all on a line by line basis. This is to deal with the necessity of every item which is said be incurred, although it will also enable the judge to address the proportionality of the particular item at the time.”
The total figure should then go through the proportionality test, having regard to the factors set out in CPR 44.3(5) and 44.4(1). “If considered disproportionate, following the West guidance, the judge would revisit the various categories to consider whether in those categories a proportionality reduction can be made. The categories will usually relate to the stages of the litigation, and in a flight delay claim that may be easily discernible, as here, being pre-issue, post-issue, and hearing preparation.
“It may be open to a judge to regard a significant amount claimed at the hearing preparation stage as disproportionate, where such as in the present case, there is no meaningful engagement by the airline defendant and liability is a ‘slamdunk’.”
If there are further reductions to be made on a proportionality basis, HHJ Wood continued, elements which are unavoidable such as court fees should be ignored. “In this respect, it is not considered, as was contended for in the present case, that the costs incurred in pursuing the unavoidable stages of litigation, i.e. preparing the form A, or submitting witness statements, should be regarded as unavoidable, or an irreducible minimum.
“The resulting figure is then the final amount of costs to be allowed. By applying this process, the way in which the figure has been arrived at will be clear and transparent. There should be no further stepping back, or the making of any further deduction for proportionality, because that, as the court in the West case indicated, would amount to double counting.”
HHJ Wood said he was conscious that this process could impose an “additional and onerous burden” on district judges handling ESCP flight delay claims. “However, precisely how the exercise should be taken by reference to an individual case will depend on a number of factors. I understand, as I have indicated above, that schedules are not routinely provided. There is scope for insertion on the form A of the amount of costs which are claimed. If the basis on which the costs are claimed is not broken down, or is lacking in detail, and yet provides a total which is considered to be disproportionate, the court could take a significantly broader approach.
“Where there is detail provided, or where there is a schedule, it is unnecessary for the judge carrying out the assessment to provide a separate written decision relating to how any final order for costs has been calculated. It would be sufficient, it seems to me, that any deductions are annotated on the schedule in respect of costs on the line by line assessment, with a further annotation made to individual categories which have been reduced for proportionality reasons.
“The schedule can either be annexed to the final order or simply referred to, e.g. the court has determined that the necessary and proportionate costs are £x as referred to in the annotated schedule /form A retained on the court file. How any judge deals with his/her decision on the recoverable costs in a successful ESCP claim is down to individual preference, provided that it can be clearly established that an exercise has been undertaken, and that the reasoning is scrutable.”
Where insufficient detail has been provided, or only a global sum claimed, he continued, the judge could record this as the basis of a significant proportionality reduction, “perhaps in the preamble without more”. Equally, if there was only a relatively modest reduction for proportionality, “it may be sufficient to record this in the decision/template order as a simple and single basis for deduction without reference to any annotated schedule”.