Senior Costs Judge was wrong to hold that the new test of proportionality applies to still recoverable additional liabilities

• United Kingdom

• Costs Unit

07-11-2017

The anticipated judgment in the appeal of BNM v MGN has been handed down today. The Court of Appeal unanimously found in the claimant’s favour, confirming that the Senior Costs Judge had erred in his ruling that the new test of proportionality applied to Pre-April 2013 additional liabilities.

Whilst there are now fewer cases remaining involving Pre-April 2013 additional liabilities. For those remaining this decision is paramount to the recovery of additional liabilities.

The Court of Appeal has confirmed in this judgment that cases which involve Pre-April 2013 additional liabilities require the application two proportionality tests. Costs incurred Pre-April 2013 will be assessed under ‘old’ proportionality test, this will include the assessment of the additional liabilities. Costs incurred post-April 2013, will be assessed under the ‘new’ proportionality test.

Unfortunately, the Court of Appeal did not provide the expected guidance as to how the new test of proportionality should be applied in future matters. The Senior Costs Judge is to reconsider the issue of proportionality and issuing proceedings without any warning to the Defendant.