Proportionality –

Another one bites the dust!

We have reported previously that the rules regarding recovery of legal costs are undergoing massive change. For many years a winning party could expect to recover a substantial contribution towards their legal costs from a losing party. In our experience a figure around 75 – 80 % was not unusual.

However, recent changes have been introduced which are only now working their way through the system and are throwing up some worrying results.

Many of you would have heard of Brian May, the guitarist with the rock band Queen.

He recently brought a claim against a development company called The Wavell Group Limited. The claim arose after his neighbour started work to develop the basement of their house.

Mr May and his wife commenced county court proceedings alleging nuisance in consequence of the building works.

Very early on in proceedings Mr and Mrs May accepted compensation of £25,000.

They also sought payment of their legal costs which came to £208,236.54.

The parties could not reach agreement on how much the Defendant’s should contribute so the court was asked to decide.

The court ordered the Defendant to pay £42,000 towards the bill.

The consequence of the decision was that from an economic point of view, the whole exercise was pointless.

Whilst there is no doubt that the costs were out of all proportion to the sums at stake in this case it does highlight the difficulty that advisors now have in advising clients about costs issues. They are no longer straightforward and must be considered much more carefully than was previously the case.

The decision continues the latest trend coming from the courts showing that they are getting tough on costs. Recent changes now allow the court to order a party to budget their costs and to recover no more than their budget even if the claim costs more. There is also talk afoot of seeing the introduction of fixed fees across all areas of litigation. Such a regime already exists for personal injury claims.

The issue of costs is very much in a state of flux. Further change will no doubt come. Watch this space.

Ballantyne Grant is a specialist litigation practice. If you require any advice on any issue arising from this article please contact Andrew Grant on 01244 394 230.

This article is for general interest only. It is not intended as specific legal advice.

proportionality