PROPORTIONATE COSTS IN A FAMILY CASE: £33,813 REDUCED TO £3,737.50

In K -v- K [2016] EWHC 2002 (Fam) Mr Justice Macdonald reduced the costs of a successful party to an appeal in a family case.

The stringent test of proportionality in relation to costs incurred applies with equal force in family proceedings. It is remarkable that such a significant sum of money has been spent by these two parents arguing over a single question the answer to which was indisputable from the outset. The costs incurred in this case were disproportionate to the single issue at hand”
“That does not mean, however, that it is right for the mother to bear the frankly excessive costs enumerated in the Statement of Costs filed by the solicitors instructed by the father.  In circumstances where the rules make provision for the payment of costs proportionately and reasonably incurred, where a costs order is merited the court will meet robustly any claim for costs that it considers to be, as in this case, excessive.”

THE CASE

The mother in a case lost an appeal. Her application for recognition of an order made in a Russian court failed because the Hague Convention was not in force at the relevant time.

THE DECISION TO ORDER COSTS

The judge decided that the mother’s conduct was such that a costs order should be made. The mother’s application was doomed from the outset and she had had legal advice to that effect.

PROPORTIONAL COSTS

The judge considered the nature of the costs that should be awarded.
vii) Where the court is to assess the amount of costs (whether by summary or detailed assessment), pursuant to CPR r 44.3(1) the court will not allow costs which have been unreasonably incurred or are unreasonable in amount. Pursuant to CPR r 44.3(2), when assessing costs on the standard basis the court will only allow costs which are proportionate to the matters in issue and costs which are disproportionate in amount may be disallowed or reduced even if they were reasonably or necessarily incurred. CPR r 44.3(5) provides, in so far as is relevant to this case, that costs incurred will be proportionate if they bear a reasonable relationship to the complexity of the litigation, any additional work generated by the conduct of the paying party and any wider factors involved in the proceedings, such as reputation or public importance (see also FPR 2010 PD28A para 4.4).
viii) In deciding the amount of costs, CPR r 44.4 also requires the court to take into account whether the costs were proportionately and reasonably incurred. The court will also have regard to, inter alia, the parties conduct before, as well as during, the proceedings, the efforts made before and during the proceedings to try and resolve the dispute, the importance of the matter to all the parties, the particular complexity of the matter or the difficulty or novelty of the questions raised, the skill, effort, specialised knowledge and responsibility involved, the time spent on the case and the place where and the circumstances in which the work was done.
ix) On the question of proportionality, the touchstone of reasonable and proportionate costs is not the amount of costs which it was in the party’s best interests to incur but the lowest amount which he or she could reasonably have been expected to spend in order to have his or her case conducted and presented proficiently having regard to all the relevant circumstances. Expenditure above and beyond that level is for a party’s own account and not recoverable from the other party (Khazakstan Kagazy PLC v Zhunus [2015] EWHC 404 (Comm)).

THE COSTS CLAIMED COMPARED TO THE COSTS AWARDED

  1. In summarily assessing costs the judge’s task is to focus on the heads of costs he or she is being asked to assess and to form his or her best judgment of the proportion it is reasonable to require the paying party to pay (Machinery Developments Ltd v St Merryn Meat Ltd [2005] EWCA Civ 29). Having regard to the contents of the Schedule of Costs filed and served on behalf of the father, I am satisfied as follows in respect of costs in favour of the father:
i) I am not satisfied that the hourly rate for the Grade C fee earner of £270 per hour is reasonable. I am prepared to allow an hourly rate of £200 per hour. I am not satisfied that the hourly rate for the Grade A fee earner of £550 is proportionate and reasonable. I am prepared to allow an hourly rate of £325. Finally, I am not satisfied that the hourly rate for the Grade D fee earner of £150 is proportionate and reasonable. I am prepared to allow an hourly rate of £125.

ii) I am not satisfied, given the simple and singular nature of the point in issue, that it was proportionate and reasonable to expend 3 hours in attendance on the client. I am prepared to allow 1 hour for the Grade A fee earner, amounting to £325 as against a claimed figure of £1,118.

iii) With respect to attendance on opponents I am likewise not satisfied, given the simple and singular nature of the point in issue, that it was proportionate to expend 13.3 hours on letters and emails out and telephone calls. It was plainly necessary for certain letters to be sent setting out the father’s case before an appeal was issued, chasing the mother for a response and notifying the mother that the appeal had been issued and corresponding in respect of the impending appeal hearing. Whilst the first of these would have taken some time, the remainder would have taken very little. I am prepared to allow 1 hour for the Grade A fee earner and 0.5 hours for the Grade C fee earner, amounting to £425 as against a claimed sum of £3,997.

iv) The attendance on others is not further particularised in any way in the Schedule of Costs and I am not prepared to allow those costs, claimed in the sum of £2,341.

v) I am not prepared to allow the sum claimed for work done on documents. There is no schedule attached to the Statement of Costs enumerating in any way the work claimed in this regard. Further, and in any event, given the simple and singular nature of the point in issue, where the letters required to be written to the other side are dealt with elsewhere and where counsel drafted Notice of Appeal and documents for the hearing, there was in my judgment no requirement to spend significant periods of time working on documentation. I am prepared to allow 1 hour for the Grade A fee earner, amounting to £325 as against a claimed figure of £9,352.

vi) In terms of the attendance at the hearing, in circumstances where the father’s case was entirely straightforward in nature, comprising one unassailable legal submission, and in circumstances where the father was not attending the hearings, I am satisfied that it was not appropriate for counsel to be attended by a Grade A fee earner. In the circumstances, I take the view that it was reasonable and proportionate for counsel to be attended by a Grade D fee earner. I am prepared to allow 4.4 hours attendance amounting to £550 as against the claimed sum of £2,680 (Mr Devereux having already made certain concessions in respect of the figure for attendance).

vii) In circumstances where the father’s solicitors occupy premises in the immediate vicinity of the court, the figure for travel and waiting is disproportionate. I am prepared to allow 0.5 hours travel and waiting time for the Grade D fee earner, amounting to £62.50 as against a claimed figure of £4,850.

viii) With respect to the evident expertise, skill and industry of junior counsel instructed on behalf of the father, the cost of advice/conference/ documents of £4,550 is disproportionate in circumstances where, again, the father’s case was entirely straightforward in nature, comprising one unassailable legal submission. Within this context I am prepared to allow £800.

ix) Counsel’s fee of £8,500 for the two hearings is disproportionate in circumstances where the issue in dispute is, for the reasons set out above, so narrow. Again with respect to the evident expertise, skill and industry of junior counsel, I am prepared to allow a total of £1250 for attendance at the hearings.

  1. In the circumstances I summarily assess the costs award in this case in the sum of £3,737.50 as against the initial claimed figure of £38,813.
  2. With regard to the last two heads of costs dealt with in Paragraph 44 above, the court makes clear that no criticism is levelled at the competence with which junior counsel for the father has presented the father’s successful appeal to the court, his oral and written submissions having been, as always, of a very high calibre.

CONCLUSION

  1. The stringent test of proportionality in relation to costs incurred applies with equal force in family proceedings. It is remarkable that such a significant sum of money has been spent by these two parents arguing over a single question the answer to which was indisputable from the outset. The costs incurred in this case were disproportionate to the single issue at hand. I again observe that the single question in the case was entirely straightforward in nature and answered by one unassailable legal submission.
  2. In this case it is right, for the reasons I have given, that the mother should be the subject of an order for costs.  That does not mean, however, that it is right for the mother to bear the frankly excessive costs enumerated in the Statement of Costs filed by the solicitors instructed by the father.  In circumstances where the rules make provision for the payment of costs proportionately and reasonably incurred, where a costs order is merited the court will meet robustly any claim for costs that it considers to be, as in this case, excessive.

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One comment

  1. This is worth reading case, that family only need to pay £3,737.50. I need to appreciate the Judge and Lawyer they have taken great decisions in favor of family to reduce cost.

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