The appeal was allowed on the second ground because the deputy costs judge failed to apply the procedural requirements for dealing with the question of proportionality set out in the Court of Appeal decision Lownds vs Home Office (2002).
This decision set out: (1) a global approach to the assessment of costs that indicates whether the total sum claimed is or appears to be disproportionate, having particular regard to the considerations that CPR 44.5(3) states are relevant; followed by (2) an item-by-item approach to ascertain whether each item should have been reasonably incurred and that the cost for that item was reasonable. The decision would therefore be referred back to the same deputy costs judge to reconsider whether or not as a preliminary judgment proportionality was relevant. However, because the deputy costs judge had considered proportionality at the end of the detailed assessment at the suggestion of the appellant’s costs draftsman, the appellant was ordered to pay the costs of the appeal, on the grounds that she should not be able to create a procedural irregularity and then take advantage of it on appeal without a costs consequence visiting her.
On the second issue, the appeal was dismissed on the grounds that the appellant deliberately introduced the matters and therefore brought them into the forum of the assessment.
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The deputy costs judge had declined to make any adjustment for proportionality on the grounds of the appellant’s unreasonable and intransigent conduct in the litigation. The appeal against his decision was successful on the grounds that he should have taken account of the conduct of the parties, and the other six factors identified in CPR 44.5(3), at the start of the assessment on the figures claimed. However, while the court emphasised the seriousness of departing from this procedure in the assessment of costs, it expressed little sympathy for the appellant whose own conduct – albeit partly through her representatives – had caused the costs to be so high and so created the grounds for the appeal. The respondents’ award of their costs of the appeal, despite the appellant’s success on one of the points raised, reflected this, as did the court’s refusal to remit the assessment to a different deputy costs judge. The Woolf Reforms, in the words of the deputy costs judge, do not anticipate people who seek to take on those they perceive have wronged them, irrespective of the consequences. Although the exact amount of the claimant’s recovery of its costs was not settled in this hearing, the court gave every indication that costs that were caused to be incurred by an unsuccessful litigant could be allowed on detailed assessment, even if they greatly exceeded the amounts in issue, if the proper procedure for assessing them was followed.