A Circuit Judge sitting in the County Court at Liverpool has handed down a ruling on 11 September 2019 which provides guidance in relation to the handling of costs in flight delay claims.
His Honour Judge Graham Wood QC upheld the Claimant’s appeal from District Judge Baldwin’s first instance decision, which reduced costs from the sum claimed of £1401 down to £205. The brief explanation given by the trial Judge was that this was the totality of ‘necessarily incurred and proportionate costs’. The appeal Judge held that this was unacceptable as it was a ‘short form decision’ without further explanation as what if any proportionality analysis had been applied.
This is the first time that a Circuit Judge has considered the question of proportionality of costs in the low value claims context since the landmark Court of Appeal decision in West v Stockport NHS Foundation Trust. Importantly, the eligibility for these costs comes due to the claim having been brought under the European Small Claims Procedure (ESCP), rather than the domestic Small Claims Track procedure under CPR 27, which has its own costs regime under rule 27.14.
The Judge reminded himself of the court’s discretion as to costs under CPR 44.2, then went on to consider how to approach a proportionality assessment. The test to be applied is essentially in three stages. Firstly, the court must consider the items within the Schedule of Costs on a ‘line by line basis’, following West. Next the court should consider whether the total figure is disproportionate; CPR 44.3(5) and CPR 44.4(1) contain the relevant factors for this analysis. Finally, if the court considers the total to be disproportionate, then the judge should revisit the figures, taking each stage of the litigation in turn, to determine whether a reduction can be made as to proportionality.
Because of the potential to recover higher amounts by way of costs, the decision may encourage litigants and their legal representatives to consider bringing eligible claims up to the value of €5000 via the European Small Claims Procedure, instead of via the CPR Part 7 route.