Proportionality test confusion grows

Confusion over the application of the new proportionality test to recoverable additional liabilities has stepped up another notch after a second master expressly disagreed with the Senior Costs Judge’s ruling in BNM.

While in BNM – which is going to the Court of Appeal, but not until October – Master Gordon-Saker was clear that the test should apply to additional liabilities, Master Brown instead backed Master Rowley’s (pictured) ruling last month that only base costs should be subject to the test.

Even if this was wrong, Master Brown said, additional liabilities should not be aggregated with the claimant’s base costs for the purposes of the test.

Sitting as a county court judge in Murrells, Estate of v Cambridge University NHS Foundation Trust [2017] EWHC B2 (Costs), a clinical negligence case, Master Brown explained at length why he came to his conclusion, echoing many of Master Rowley’s findings.

He noted that, if the test did apply to additional liabilities, it would have “a considerable prejudicial effect upon those litigants and lawyers who have entered into pre-commencement funding arrangements”.

He said: “It seems likely that they will have entered into such arrangements in the reasonable expectation that the additional liabilities would continue to be recoverable as they were pre-LASPO.

“To apply the new test to additional liabilities in the way contended for would, however, require many litigants to submit to a substantial, if not complete, disallowance of their additional liabilities as against the other party or parties to the litigation, while at the same time the liability to pay an insurer or the lawyers the additional liability would be preserved.

“If that were right, it would inevitably lead to many litigants, including – it might be observed – victims of mesothelioma, having to give up deserving claims or defences. I agree with Master Rowley: in these circumstances, the defendant’s contention cannot be reconciled with transitional provisions and the clear will of Parliament. The intention must have been to provide, at the very least, an orderly retreat from the old funding scheme…

“In the circumstances, I respectfully disagree with the decision of Master Gordon-Saker in BNM as to the application of the new proportionality test to additional liabilities and therefore also as to the need to aggregate base costs with additional liabilities.”

Master Brown added that, even if he had decided the test did cover additional liabilities, he would still have ruled that it was not appropriate to aggregate additional liabilities with base costs in applying it.

 

This post was posted in ACL e-Bulletin

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Costs News
Published date
27 Jan 2017

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