Costs incurred are proportionate if they bear a reasonable relationship to: (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; and (e) any wider factors involved in the proceedings, such as reputation or public importance.
One could be forgiven for concluding that this ‘new’ Rule is little more than a Frankenstein’s monster of CPR 1.1(2)(c) and CPR 44.5(3). The common criticism of the test of proportionality is that (to quote Michael Cook in Cook on Costs) “nobody knows what it means”. CPR 44.4(5) goes no way to addressing this criticism.
In his speech, the Master of the Rolls implies it is not possible to give an all-encompassing definition of ‘proportionality’ and acknowledges that the new Rule is likely to give rise to some uncertainty and satellite litigation.
Is the introduction of this Rule likely to be a case of the Emperor’s new clothes?