Reasonable but not Proportionate: Life under the New Costs Regime

BNM v MGN Ltd [2016] Lexis Citation 62 is a stark example of the application of the new costs regime, particularly the new CPR 44.3. Recognising that the new test of proportionality was intended to bring about a sea-change in costs assessments, Master Gordon-Saker proceeded to halve a costs bill which was found to be reasonable on a line by line assessment. As to the underlying facts, the Claimant had previously had a relationship with a premiership footballer which became known to the Sunday People (a newspaper published by the Defendant) following the Claimant losing her mobile phone. The claim itself was for an injunction restraining publication or use of confidential information taken from the Claimant’s phone, damages and delivery up. It settled before trial on the basis of certain undertakings and payment to the Claimant of £20,000.00 in damages together with costs. Costs originally claimed were £241,817.00 inclusive of success fees, an ATE insurance premium and insurance premium tax. On a line by line assessment £167,389.45 was considered reasonable of which the Master allowed £83,964.80 as proportionate. This case does provide confirmation that the new test of proportionality applies to additional liabilities and that when applying that new test, the court need not consider the amount of any additional liability separately from the base costs. That said, the Master did consider the ATE insurance premium separately.

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