In hearing BERNARD MURRELLS (EXECUTOR OF THE ESTATE OF JILL MURRELLS (DECEASED)) v CAMBRIDGE UNIVERSITY NHS FOUNDATION TRUST (2017) Master Brown In the Senior Courts Costs Office,  concluded additional liabilities are not subject to the test of proportionality.

The Claimant’s claim for compensation settled in the sum of £9,650 and as a result of accepting the offer obtained the authority to recover costs on the standard basis from the Defendant.

The Claimant was funded by way of a CFA entered into in September 2012 and an ATE insurance premium. The Bill of Costs was prepared in two parts; Part 1 in the sum of £59,520.50 for work carried out prior to 1 April 2013, namely when the Legal Aid, Sentencing and Punishment of Offenders Act 2012 came into force, and part 2 for the work carried out post 1 April 2013 in the sum of £81,048.55. The Claimant claimed a success fee of 100% on all profit costs.

The court determined that the part 1 base costs (excluding additional liabilities) amounting to around £32,000 were disproportionate pursuant to CPR r.44.4(2). Applying the test of necessity to the line-by-line assessment, the court determined that a total of £16,053.25 for base costs should be allowed in respect of part 1 of the bill. As to the part 2 base costs, the court applied the test of reasonableness set out in the new CPR r.44.3(2) and reduced the sums claimed in respect of profit costs and disbursements to arrive at a total figure of £20,436.75. The court found that the success fee of 100% was too high and that the appropriate fee was 82%. In the instant hearing, the court was required to determine whether the remaining part 2 base costs after the earlier deductions were disproportionate.

The Court was required to determine whether the remaining part 2 base costs after the earlier deductions were disproportionate.

The Court were requested by the Defendant to consider the following;
(1) The cost of the ATE premium and success fee are subject to the new test of proportionality under CPR r.44.3
(2) if part 2 of the base costs were disproportionate under the CPR.44.3 test of proportionality;
(3) whether the additional liabilities were disproportionate.

The Defendant claimed the court should re-consider base costs with additional liabilities, as the resulting total sum for part 2 of the bill was disproportionate.

Held: 

(1)Additional liabilities were not subject to the new test of proportionality under CPR.44.3 and in particular reference to  findings in King v Basildon and Thurrock University Hospitals NHS Foundation Trust unreported was applied and BNM v Mirror Group Newspapers Ltd unreported considered.

CPR r.48.1 and CPR PD 44 para.11.9 preserved the rules that existed before the 2012 Act which related to the recovery of additional liabilities, if the additional liabilities were to be considered and assessed then CPR.44.3 would have made specific reference to the same; as it is the new CPR.44.3 does not refer to additional liabilities, therefore it is difficult to apply the Defendant’s argument.

(2) Considering the factors under CPR r.44.3(5), and in particular the complexity of the matter, the remaining part 2 base costs were not disproportionate. The base costs allowed were in relationship to the issues throughout

(3) Neither the costs of the ATE premium nor the success fee were disproportionate