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THE PROPORTIONALITY TEST
Home Office –v- Lownds - Court of Appeal 22nd March 2002
The definitive test. If the overall costs are considered to be disproportionate the
costs will be assessed on the basis each item is necessary.
Lloyds TSB Bank Plc –v- Lampert  EWHC 249
– the Deputy DJ had incorrectly failed to properly apply the 2-stage proportionality
Giambrone –v- JMC Holidays  EWHC 2932
- the proportionality test is not supposed to be a long drawn out process. It should
be assessed and decided in under an hour. Leave to appeal proportionality test decisions
should be resisted.
Bill of costs was 107 pages long (narrative 8 pages) excluding 120 pages of schedules!
The total costs claimed were £350k, 7 times damages. Costs of DA over £10k. The Seven
Pillars of Wisdom NOT to be used as a ‘checklist’. An experienced judge could decide
proportionality by reading the papers and the bill
14 Claimants travelling on a coach when a collision occurred with a Turkish taxi
driver. The fact that 14 Claimants were involved did not necessarily make it a complex
case Individually none of the claims were very large. Total damages were only around
£63,000 for all Claimants put together. The bill of costs that was presented fell
just short of £170, 000.
When applying the Lownds test one should look at the total costs pre and post CPR
and apply the Seven Pillars of Wisdom. If the costs are then found to be proportionate
(as in this case) the items in the post-CPR costs will have the necessity / reasonableness
A Claimant who can show that, at the time of making a claim, the amount they claimed
was what they reasonably believed they would recover then they should not be criticised.
This must be contrasted to claims made at a level much higher than that which the
Claimant reasonably believes they will recover. Take a look at paragraph 38 of Home
Office v Lownds .
This is an important distinction. For example, a Claimant who genuinely claims £100,000
based on the facts as they appear at the time, but whose claim as the case develops
reduces the value to £20,000, has done nothing wrong. This is very different to a
Claimant has purposely exaggerated their claim and there are several authorities
which deal with exaggerating Claimants.
Sirius International Insurance Corporation and ERC Frankona Ruckversicherungs Aklein-Gesellshaft
SCCO July 9, 2002, Costs Judge Wright
-when deciding what is necessary conduct is an important factor
-parties should co-operate in order to keep costs proportionate
Good case to use where the amount of damages actually awarded is much less than the
total claimed. In deciding whether the costs are proportionate the court should have
“regard to the sum that it was reasonable for him to recover at the time he made
If assessing the costs of the Defendant, having regard to what he believed the Claimant
might have recovered if the claim succeeded.
However, the additional costs incurred in relation to exaggerated claims will not
be allowed, only the costs of pursuing a reasonable claim.
Ford –v- GKR Construction  1 WLR
In contract to the Booth case the Claimant was not aware that their claim was exaggerated.
Booth –v- Britannia Hotels Ltd  EWCA Civ 579
Claimant massively exaggerated her personal injury claim. The claim was pleaded at
over £600,000 and settled for only £2500 when the Claimant chose to accept an offer
made by the Defendants over two years previously. The reason why? A few weeks before
trial the Defendants disclosed their video evidence which clearly showed that the
Claimant wasn’t really suffering from the injuries she said she was. This was unmistakably
an example of an exaggerated claim – the Claimant was aware they were making a false
claim. The final bill of costs submitted by the Claimants was over £96,000! It was
only when the case reached the Court of Appeal that it was agreed that a reasonable
amount of costs should be allowed “in order to establish a quantum against the background
that, at the end of the day, the sum accepted was £2500…”
Morgan v UPS  EWCA
This case shows how a Claimant who had told lies was still entitled to his costs
after beating a Defendant’s Part 36 offer. The claim appeared to have been initially
exaggerated but the Claimant had revised his claim. This case specifically distinguishes
the facts from Painting.