The Application of Proportionality – Hodgson v Creation Consumer Finance

This case has provided some interesting judicial comments on the application of proportionality and also hourly rates.

The Claim related to alleged misrepresentation of a supplier in selling solar panels to the Claimant and that this related to the performance of the panels specifically. Judgment was handed down in the Claimant’s favour in the sum of £3,160.50 against a claim that totaled approximately £17,000.00.

The claim proceeded under the old Capped Costs List Pilot Scheme of PD51W (which is no longer in use). As a result, the costs were dealt with by way of a summary assessment. To assist with this Pearce J was provided with a statement of costs, the Defendant’s submissions in respect of the statement of costs, and the Claimant’s replies to those submissions. The statement of costs was prepared in accordance to the relevant ‘phases’ which were subject to specific caps as mandated by the pilot scheme.

Whilst the costs were being summarily assessed under the cost capping pilot, it was noted that the costs were still be assessed on the standard basis and, therefore, the principles of reasonableness and proportionality were to be applied. Therefore, the comments contained within the judgment can be applied on a wider basis, particularly those relating to proportionality and hourly rates.

When considering the issue of proportionality Pearce J did note that there was likely to be circa 400 people with similar potential claims and that the current claim could be considered akin to a test case. Furthermore, Pearce J considered that there were novel areas dealt with throughout the judgment including providing guidance that was likely to assist other cases.

Pearce J noted that due to the low value nature of this type of claim it would be likely that costs would become quickly disproportionate in other potential claims if they were all to proceed without any such judicial comments or guidance provided by a test case. However, Pearce J considered that in light of the importance of the case to other potential cases that the costs claimed (including the use of silks on both sides) were reasonable and proportionate. It should also be noted that Pearce J considered the hourly rates claimed were also reasonable. This included a Litigation Executive with circa 6 years of litigation experience claiming £185 per hour.

This case again confirms that the value of the claim is only one aspect open for consideration when assessing the proportionality of costs. Clearly in this case the complexity of the litigation took greater precedence and therefore allowed costs to be assessed in the total sum of £53,743.50 plus VAT and other costs not subject to proportionality such as court fees.

Please see the full case here.

If you have any questions or wish to discuss this judgment further, please contact Kris Kilsby.

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