A judgment has today (16 June 2016) been handed down on the costs claim in the case May and May -v- Wavell. Boodle Hatfield’s Colin Young acted for Wavell Group Limited.
Dr and Mrs Brian May brought proceedings in the County Court for nuisance arising out of a basement development. They accepted a sum of money of £25,000 prior to a defence being entered. They then began a costs claim seeking £208,236.54 including VAT. The costs claim was disputed on primary grounds of being both unreasonable and disproportionate to the issues.
Master Rowley has reduced the costs allowed to £35,000 plus VAT. The Master noted that this was a significant reduction as against the costs claimed, in the order of 20% of the costs they sought.
Colin Young, a partner at Boodle Hatfield who acted for Wavell said: “This case is a lesson for parties and their legal advisers to consider very carefully the steps that they intend to take when dealing with a case, whether prosecuting a claim or defending.
“Costs incurred should be tightly focused on the issues at large in the proceedings. If any party wishes to pursue matters outside of that focus, they cannot reasonably expect to recover the costs of such matters if they are successful in their case. The courts are likely to scrutinise ever more carefully the costs incurred.”
Colin adds: “This case has similarities to the high profile media case against Mirror Group Newspapers reported earlier this month, and shows the approach which the Courts are taking to the new test of proportionality.”
Master Rowley first assessed which elements of the costs claimed were reasonable by analysing them on an item by item basis. The Master reduced the costs claims to just over £99,000 which he referred to as a significant level of reduction. The Master said that the extent of this reduction was undoubtedly due in part to the method of representation adopted by the claimants. They instructed Simon Farrell QC through the direct access method without utilising the services of a firm of solicitors. The Master commented that inevitably, therefore, there was some novelty in conducting litigation for Mr Farrell and his team. This level of reduction, of more than 50%, would by itself have made the decision notable.
The Master then went on to apply the proportionality test brought in by the Jackson reforms. The claimants sought to argue that the case was both legally and factually complicated and that there were conduct issues which had increased the costs incurred. The Master rejected these arguments, making it clear that there was nothing in the defendant's conduct which had caused additional work to be generated.
Instead it was submitted that a meeting prior to the involvement of legal representatives had taken place which had resulted in a regime of noise reducing methods being implemented. The Master stated that in cases such as this the new test of proportionality will require legal representatives to inform their clients that, even if successful, they will receive no more than a contribution to the costs that will be incurred. He went on to suggest that this may prove a driver for costs to be reduced or for alternative dispute resolution mechanisms to be explored. He expressed a hope that cases such as this one will be relatively rare.
Colin adds: “A key feature in this case was the fact that the claimants accepted the settlement offer at a very early stage in the proceedings. The claimants had spent considerable costs exploring a number of avenues which did not, in the end, develop further in the claim. The Master however found that despite the claimants' celebrity status, and the first claimant's campaign to disrupt the creation of mega basements, there was nothing within the costs claimed for these proceedings which could be considered proportionate as a result of any wider issues.”
The Master concluded that this new approach of proportionality involves the court wielding a blunt instrument rather than a precision tool.