As another summer draws to a close we can all recall the newsworthy computer glitches and strikes which caused a great many flights to be delayed or cancelled, causing disruption and inconvenience to thousands of travellers.
Naturally, with the ever-expanding remit of fixed costs across the more traditional claims, a growing niche of the legal profession is basing itself on recovering damages arising out of flight delays.
These losses tend to be relatively minor in nature, often amounting to little more than a few hundred pounds. In usual circumstances the costs of such claims would restricted by the conventional small claims procedure in CPR 27. However, these cross-border claims allow litigants to recover necessarily incurred and proportionate costs under the European Small Claims Procedure (ESCP). It is thus clear to see the potential for far more advantageous costs consequences when compared to pursuing these claims under CPR 27.
However, there has been scant guidance as to how the courts have been arriving at their ‘necessarily incurred and proportionate’ figures when assessing bills. It is often the case that little explanation is given to their reasoning and the often recognised inconsistency between courts becomes apparent once more. Thankfully the ruling in Senior –v- Blue Air should give practitioners some food for thought on how flight delay costs assessments should be conducted.
In the first instance, a costs claim of £1,401 (inclusive of court fees) was reduced to a ‘necessary and proportionate’ total of £205, for a substantive claim which settled for £352.68. As was often the case, no further explanation for the reductions was given.
On appeal, Judge Graham Wood QC outlined why these short form decisions were unacceptable. Such significant reductions for proportionality with little transparency or explanation were deemed inscrutable by any reviewing court. He helpfully (for costs practitioners at least) followed the approach set out by the Master of the Rolls in West –v- Stockport NHS Foundation Trust  EWCA 1220, when proportionality is engaged as an issue, as it most likely will be on substantive claims of a modest nature.
Judge Wood ruled that costs in these claims should, as in West, be assessed on a line by line basis, having regard to CPR r44.3(5) and CPR r44.4(1) when doing so. Only once this is done should the proportionality of the total figure be considered. Should this be disproportionate then the assessing judge should revisit various stages of the litigation to see if a proportionality reduction would be appropriate. All the while excluding the unavoidable costs such as court fees.
After any reductions for specific stages of the litigation the figure presented would be the final amount to be allowed. This ‘clear and transparent’ figure would be scrutable by a reviewing court and should not be subject to a ‘stepping back’ reduction for proportionality.
This approach will almost certainly add a burden to the assessing judge, but the ability of a reviewing court to scrutinise a costs decision must be maintained. On a practical note, one thing receiving parties must take away from this ruling is to always provide a breakdown of their costs, as it appears that these are not routinely provided.
From a practitioner’s perspective the provision of any guidance from the courts on proportionality is welcome. It is particularly welcome as guidance of how an assessing judge should apply the principles laid out by the Court of Appeal in West.
Of course, whilst the principles of West take time to bed in, how long the European Small Claims Procedure, (which is the basis for claims of this nature) will survive is yet to be seen as we rapidly approach the new deadline of 31st October. Deal? No deal? We will, as ever, have to continue to watch this space.
This article was written by Adam Grant who is a Costs Lawyer at Pure Legal Costs Consultants and is a Council Member of the Association of Costs Lawyers.
This article first appeared on the Practical Law Dispute Resolution Blog on 18 October 2019