CPR 44.3 – Proportionality in Detailed Assessment
What is CPR 44.3?
The Civil Procedure Rules (CPR)44 sets out the court’s powers in relation to costs in civil proceedings. This rule deals with the court’s discretion as to the costs of litigation, which includes the amount, timing, and manner of payment of costs.
CPR 44.2 sets out the Court’s discretion on costs:
(1) The Court has discretion as to –
(a) whether costs are payable by one party to another;
(b) the amount of those costs; and
(c) when they are to be paid.
(2) If the Court decides to make an order about costs –
(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but
(b) the Court may make a different order.
More specifically, CPR 44.3 outlines the factors that the court may consider when deciding who should pay the costs of a case and in what proportion. It also refers to the basis of assessment of costs which can either be assessed on a standard of indemnity basis. These factors include:
- The conduct of the parties, both before and during the proceedings.
- Whether a party has succeeded on part of its case, even if it has not been wholly successful.
- Any admissible offer to settle made by a party which is not accepted by the other party.
- The extent to which the parties have complied with the CPR and any relevant pre-action protocol.
- The amount of costs incurred by each party.
- Any other relevant factor, including the financial position of the parties.
Ultimately, the aim of CPR 44.3 is to ensure that the costs of litigation are reasonable and proportionate, and that they are allocated fairly between the parties involved in the proceedings.
(1) Where the Court is to assess the amount of costs (whether by summary or detailed assessment) it will assess those costs –
(a) on the standard basis; or
(b) on the indemnity basis,
In either case, the Court will not allow costs that have been unreasonably incurred or are unreasonable in amount.
(Rule 44.5 sets out how the Court decides the amount of costs payable under a contract.)
CPR 44.3(2) also states that the court should only allow costs that are reasonable and proportionate when being assessed on the standard basis and if there is any doubt regarding costs being reasonable and proportionate then the costs should be resolved in favour of the paying party. However, costs on an indemnity basis do not cover the issue of proportionality and reasonableness meaning costs automatically fall in favour of the receiving party.
CPR 44.3 (5) outlines the criteria that must be taken into account when determining if costs are proportionate. This section of the CPR is commonly cited in the Points of Dispute submitted by paying parties and the Replies to the Points of Dispute submitted by receiving parties, as it serves as a measure of proportionality for the costs that were incurred. Additionally, these factors are considered during the process of Costs Budgeting. The factors taken into consideration are as follows:
(a) the sums in issue in the proceedings;
(b) the value of any non-monetary relief in issue in the proceedings;
(c) the complexity of the litigation;
(d) any additional work generated by the conduct of the paying party,
(e) any wider factors involved in the proceedings, such as reputation or public importance; and
(f) any additional work undertaken or expense incurred due to the vulnerability of a party or any witness.
April 2021 update to CPR 44.3 (5)
In April 2021 an additional factor was added into CPR 44.3(5), ‘ any additional work undertaken or expense incurred due to the vulnerability of a party or any witness.’ The main term in this update is ‘vulnerability’, and deciding what can be counted as such:
(a) Age, immaturity or lack of understanding;
(b) Communication or language difficulties (including literacy);
(c) Physical disability or impairment, or health condition;
(d) Mental health condition or significant impairment of any aspect of their intelligence or social functioning (including learning difficulties);
(e) The impact on them of the subject matter of, or facts relevant to, the case (an example being having witnessed a traumatic event relating to the case);
(f) Their relationship with a party or witness (examples being sexual assault, domestic abuse or intimidation (actual or perceived));
(g) Social, domestic or cultural circumstances.
The aforementioned modifications can be particularly advantageous for the receiving party, especially if they have represented a vulnerable Claimant, resulting in additional work and costs that are beyond what is typical for a claim of similar circumstances and nature.
The update to CPR 44.3(5) essentially highlights the fact that vulnerability is an important factor to consider in a test of proportionality.
How can Greener Costs assist?
Here at Greener Costs, our team of costs lawyers and draftsmen possess many years of experience specialising in the laws surrounding legal costing and negotiations and are able to assist clients from a range of background on a variety of cases in recovering costs, whether you are the paying party or receiving party.
We can assist with the recovery of costs, including the preparation and negotiation of a Bill of Costs on your behalf if you are the receiving party. Conversely, if you are the paying party and have been served with a Bill of Costs that you consider to be excessive and disproportionate, we can assist you in creating Points of Dispute that adhere to the Civil Procedure Rules. Our assistance ensures that you are not required to pay costs that fall outside of the test of proportionality, as per CPR 44.3(5).
Greener Costs assists law firms throughout England and Wales through the use of our remote law costing services. Our clients find increased efficiency through the use of our remote service as it provides a pragmatic approach to costing, reducing the time it would take to scan and send an abundance of files. Due to this, we can ensure quick turnaround agreements, which under most circumstances can be much more efficient than clients completing the work themselves in-house.
At Greener Costs, we are actively doing everything we can to ensure our business benefits the environment. We are doing this through carbon offsetting of our staff, becoming completely paperless and carbon offsetting through each instruction.
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