Costs Judge Rejects Mathematical Approach To Proportionality Assessment | Stockler [2025] EWHC 2262

Deputy Costs Judge Joseph firmly rejects mathematical, forumlaic approach to proportionality in £76K costs dispute, pointing to the holistic evaluation required under CPR 44.3(5) and West v Demouliplied.

Proportionality assessment under CPR 44.3(5) detailed assessment proceedings

STOCKLER AND ANOTHER V THE CORPORATION OF THE HALL OF ARTS AND SCIENCES [2025] EWHC 2262 (SCCO)

In  Stockler & Anor v The Corporation of the Hall of Arts and Sciences the court considered whether assessed costs should be further reduced on grounds of proportionality following a line-by-line assessment. The underlying claim, concerning payments under a ticket return scheme, was valued at less than £10,000 but was allocated to the fast track. Following substantive hearings, the claimants were ordered to pay the defendant’s costs, with Part 1 of the bill (£76,066.38) covering costs on the standard basis. After a detailed assessment reduced this sum to £55,581.38, the claimants argued these costs were disproportionate, proposing a mathematical approach based on a multiple of the claim’s £3,200 value. Deputy Costs Judge Joseph rejected this methodology, affirming that CPR 44.3(5) requires a holistic consideration of all factors without special weight to monetary value. The court applied the guidance in West and Demouilpied v Stockport NHS Foundation Trust, focusing solely on Part 1 as proportionality does not apply to indemnity costs. The judge found the issues of contractual interpretation were complex, justifying the instruction of London solicitors and Counsel, a point reinforced by the earlier allocation to the fast track. The court also accepted the defendant’s arguments concerning wider factors, including reputational damage and the risk of similar claims from other seat-holders. Significantly, the court held it would be unfair to permit a further reduction via proportionality after numerous Points of Dispute had been dismissed for insufficient particularisation under the principles of Ainsworth v Stewarts Law LLP. The court concluded the line-by-line assessment had already incorporated considerations of proportionality, particularly regarding rates and fee earner grades, and ruled the assessed sum of £55,581.38 was both reasonable and proportionate. No further reduction was made.
Link to full judgment

I have no hesitation at all in rejecting the approach taken by Mr Stockler, as I have summarised it in paragraph 24 above. It is clear from the decision in West that there is no basis at all for taking an approach which is based on any multiple of the notional value of the claim overall, and certainly not as Mr Stockler has calculated. In deciding whether costs are proportionate, the court must, as well as other factors, consider the sums in issue and the value of any non-monetary relief. That cannot extend to ascertaining a range, based on what appear to be arbitrary multiples of the notional overall value of the claim (the justification for which arbitrary multiples is noticeable only by its conspicuous absence) and then reaching a mid-point of the combined notional value and arbitrary multiples as representing the proportionate sum to be allowed for costs in question. Such an approach is fundamentally flawed and would be manifestly to the applicable rules in the CPR as well as going against the authority which is binding on me, as set out in West.

Citations

Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178 Points of dispute in detailed assessments must identify the specific items challenged and provide sufficient particulars to enable the receiving party and the court to understand and address the objections. George v The Corporation of the Hall of Arts and Sciences [2025] EWHC 1979 (Ch) Where a claim involves ongoing rights and obligations arising from long-term contractual arrangements, the court must construe those arrangements in context to determine the parties’ entitlements, which may inform the scope and complexity of consequential cost assessments. Wraith v Sheffield Forgemasters Ltd [1998] 1 WLR 132 In deciding whether the choice of solicitor was reasonable, the court must consider whether the instructing party had a reasonable justification for appointing solicitors outside their local area, with cost consequences depending on the outcome of that inquiry. West and Demouilpied v Stockport NHS Foundation Trust [2019] Costs LR 1265 After a line-by-line assessment, the court must determine proportionality by reference to identifiable categories of cost, excluding unavoidable items, and avoid further general reductions which risk double-counting; proportionality operates as a distinct, final cross-check after detailed assessment. Rogers v Merthyr Tydfil County Borough Council [2007] 1 Costs LR 77 Costs which are reasonable may still be deemed disproportionate; however, reasonableness is a necessary condition of proportionality, so items must first be deemed reasonable before a proportionality review is applied to the total.
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Key Points

  • When assessing proportionality under CPR 44.3(2)(a), the court must evaluate whether the overall reasonable costs bear a reasonable relationship to the factors set out in CPR 44.3(5), including both monetary and non-monetary value, complexity, conduct, wider factors, and vulnerability issues; no single factor holds overriding weight.
  • Points of Dispute must be sufficiently particularised to enable the receiving party and the court to understand the grounds of each challenge; failure to do so may lead to wholesale rejection of the objections, regardless of whether the item is claimed on the standard or indemnity basis.
  • The court’s allocation of proceedings to a specific track (e.g., fast track) is a relevant consideration in the proportionality assessment, as it reflects the court’s view on the suitability of the case for a track with specific costs consequences, which can inform the evaluation of factors like complexity and the nature of the relief sought.
  • Reasonable conduct during proceedings does not preclude the court from considering the volume and nature of litigation activity when assessing proportionality, even where indemnity costs are not yet in issue.
  • A finding that many Points of Dispute have failed for lack of particularity is a factor the court may consider within its broad discretion when assessing proportionality, but it does not automatically preclude a finding of disproportionality or a subsequent reduction; the outcome depends on the specific facts and circumstances.

"The conclusion which I reach is that the amount of the monetary value of the claim was plainly within the small claims track limit but that this factor should not take on any special weight in terms of deciding whether the reasonable costs are also proportionate. The rules do not endow this factor with any status which is greater than any of the other factors. Counsel for the defendant invited the DDJ to conclude that the claim ought to have been issued as a Part 8 claim and therefore that it should have been allocated either to the multi-track or to the fast track (see page 16G-H). In the end, the DDJ picked the middle course by allocating to the fast track. "

Key Findings In The Case

  • The defendant’s claimed costs were properly divided into standard basis (Part 1) and indemnity basis (Part 2) costs. The court held that proportionality considerations applied solely to Part 1, consistent with CPR 44.3(2), and that no further reduction for proportionality was required in relation to Part 2, which was assessed on the indemnity basis [16], [40].
  • The defendant’s decision to instruct solicitors based in the London 2 locality was found to be reasonable under the principles in Wraith v Sheffield Forgemasters Ltd, and this reasonable choice carried with it a corresponding acceptance that such instruction would necessarily result in higher hourly rates and overall costs, which were not thereby rendered disproportionate [12]–[13], [31].
  • The Points of Dispute served by the claimants were, in a significant number of instances, held to be insufficiently particularised, resulting in those challenges being dismissed. The court found that this failure disadvantaged the paying party and contributed to the overall justification for allowing the assessed costs without further deduction for proportionality [14], [57]–[58].
  • The court found that although the original claim’s monetary value was low, the eventual allocation to the fast track (rather than the small claims track) reflected the case’s complexity and the significance of the non-monetary relief sought. Thus, the reasonable costs of pursuing and defending the claim were proportionate despite originally modest sums in dispute [22], [45]–[50].
  • The defendant had justifiable reputational concerns arising from the potential impact of the litigation, which substantiated the reasonableness and proportionality of its intensive defence and the use of counsel. The court accepted that it was reasonable for the defendant to treat the claim seriously given the implications for similar claims by other seat holders and the status of the Royal Albert Hall [31], [33], [54]–[55].

"I agree with Mr Hughes that this claim had some complexity. It is appropriate in this case to combine the consideration of the issue of complexity with the issue of the skill and effort required to deal with it. Ascertaining the correct construction of contracts and/or contractual arrangements is sometimes not straightforward and can be problematic. I considered these issues when I concluded that the reasonable course was for a London 2 firm to have been instructed and that the day to day conduct of the matter was suitable for a grade B, as opposed to a grade A fee earner. This particular case was not an especially difficult matter relating to contractual construction but it nevertheless required specific expertise to present. Counsel instructed had to refer to the applicable case law on the approach which the court is to take when construing contracts, and appropriate submissions had to be made. I accept Mr Hughes’s submission, that, having reached the conclusions I reached, it is difficult to see how the costs which have been assessed as being reasonable should afterwards be considered to be disproportionate. As he put it, the reasonable instruction of a London 2 firm necessarily carries with it the result that costs are going to be higher. "

Background

The claimants, William Thomas Stockler and Alexander Charles Stockler, were holders of permanent seats at the Royal Albert Hall. They brought proceedings against The Corporation of the Hall of The Arts and Sciences, which operates the venue, concerning payments due under the Hall’s Ticket Return Scheme (TRS). Under this scheme, introduced in 1993, seat-holders could return unwanted tickets in exchange for payment.

Following amendments to the TRS payment terms in April 2018, the claimants disputed the defendant’s calculations and commenced proceedings in September 2022 seeking an account and payment of monies allegedly due. The claim was initially valued at less than £10,000, with the claimants indicating on the claim form that it fell within the small claims track limit. The defendant counterclaimed seeking, amongst other matters, a declaration as to the proper construction of the contractual arrangements.

Both parties issued applications for summary judgment in late 2022. On 23 February 2023, Deputy District Judge Kirby KC granted summary judgment to the defendant on the interpretation of the 5 April 2018 letter, stayed the balance of proceedings to enable agreement on an account, and allocated the matter to the fast track. Significantly for costs purposes, he ordered the claimants to pay the defendant’s costs of the hearing, including the summary judgment applications limited to the interpretation issue, subject to detailed assessment if not agreed.

When settlement negotiations failed, the matter returned before DJ Mauger on 24 May 2024. The judge refused the claimants permission to amend their particulars of claim, dismissed the balance of their claim, and gave judgment for the defendant on the counterclaim in the sum of £3,054.24. The judge made a further costs order requiring the claimants to pay the defendant’s costs of the claim and counterclaim on the standard basis until 8 June 2023 and on the indemnity basis thereafter.

The defendant commenced detailed assessment proceedings on 6 September 2024, serving a bill totalling £162,789.37. The bill was divided into three parts: Part 1 for standard basis costs (£76,066.38), Part 2 for indemnity basis costs, and Part 3 for bill preparation costs. Points of Dispute were served on 1 October 2024, followed by Replies, with the assessment hearing requested on 10 December 2024.

Costs Issues Before the Court

The primary issue before Deputy Costs Judge Joseph was whether the defendant’s costs should be reduced on grounds of proportionality following the line-by-line assessment. This issue arose specifically in relation to Part 1 of the bill, which covered costs incurred on the standard basis up to 8 June 2023.

The court was required to apply CPR 44.3 and 44.4, which mandate that on a standard basis assessment, only costs that are proportionate to the matters in issue should be allowed. Under CPR 44.3(5), proportionality requires costs to bear a reasonable relationship to various factors including the sums in issue, value of non-monetary relief, complexity of litigation, conduct of the paying party, and any wider factors such as reputation or public importance.

A preliminary issue concerned whether the court should assess proportionality across the entire bill or focus solely on Part 1. This was significant because Part 2 costs were assessed on the indemnity basis, where proportionality does not apply. Additionally, the court had to determine the appropriate approach to proportionality assessment following the guidance in West and Demouilpied v Stockport NHS Foundation Trust [2019] Costs LR 1265.

The line-by-line assessment had already addressed various contested issues, including the reasonableness of instructing London-based solicitors, appropriate fee earner grades, and the dismissal of numerous Points of Dispute for insufficient particularisation under Ainsworth v Stewarts Law LLP [2020] EWCA Civ 178. Following this assessment, Part 1 of the bill had been reduced from £76,066.38 to £55,581.38.

The Parties’ Positions

The claimants, represented initially by Counsel and subsequently by the first claimant acting in person, argued that the assessed costs were manifestly disproportionate. Their primary submission was that proportionate costs should be calculated by reference to a multiple of the monetary value of the claim. They proposed that a base figure should be between one and a half to two times the £3,200 monetary claim value (producing £4,800-£6,400), with additional allowances of £1,000-£1,500 for non-monetary relief and similar amounts for conduct-related work. This methodology produced a range of £6,800-£9,400, with a mid-point of £8,100 representing their view of proportionate costs.

The claimants relied on the fact that the claim had been initially valued at less than £10,000 and would ordinarily have fallen within the small claims track. They pointed to comments by DDJ Kirby suggesting concern about costs being incurred in relation to potential claims by other seat-holders, and to DJ Mauger’s ultimate dismissal of the account claim as disproportionate. They maintained that spending approximately £55,000 on a claim worth £3,200 was wholly disproportionate regardless of other factors.

The defendant, represented by Mr Paul Hughes, rejected the claimants’ mathematical approach to proportionality. He argued that all factors in CPR 44.3(5) should be considered without giving special weight to monetary value alone. The defendant emphasised that the DDJ had allocated the matter to the fast track despite its monetary value, indicating the case’s unsuitability for the small claims track. This allocation decision suggested a total claim value, including non-monetary elements, potentially up to the fast track limit of £25,000.

The defendant highlighted the complexity of the contractual interpretation issues, evidenced by detailed skeleton arguments and the instruction of Counsel throughout. He argued that decisions already made during the line-by-line assessment – including approval of London solicitors’ instruction and appropriate fee earner grades – demonstrated reasonableness that should not be undermined through proportionality. The defendant also stressed wider factors, including potential reputational damage and the risk of similar claims from other seat-holders among the Hall’s 320 seat-holders who returned 179,000 tickets in 2022 alone.

The Court’s Decision

Deputy Costs Judge Joseph rejected the claimants’ mathematical approach to proportionality assessment. The court held that there was no basis in West and Demouilpied for calculating proportionate costs using arbitrary multiples of claim value. Such an approach was deemed fundamentally flawed and contrary to CPR requirements, which mandate consideration of multiple factors without attributing special significance to any single element.

The court determined that proportionality assessment should focus solely on Part 1 of the bill, as proportionality does not apply to indemnity basis costs. Following West and Demouilpied, the court examined the work reasonably undertaken during the relevant period, finding it included substantial tasks: reviewing proceedings, drafting pleadings, considering documents, preparing for and attending the summary judgment hearing, responding to requests for information, and conducting settlement negotiations.

On the monetary value factor, whilst acknowledging the claim’s small financial component, the court held this should not carry special weight. The DDJ’s allocation to the fast track despite the low monetary value indicated the claim’s overall significance. The court accepted that when monetary and non-monetary elements were combined, the total claim value approached £25,000.

Regarding complexity, the court found the contractual interpretation issues required specific expertise and justified Counsel’s instruction. The earlier decisions allowing London solicitors and grade B fee earners supported this assessment. The court noted that having found these costs reasonable during line-by-line assessment, it would be difficult to subsequently deem them disproportionate.

The court accepted that the defendant was entitled to consider potential reputational damage and the risk of similar claims from other seat-holders as genuine wider factors. The Hall’s considerable public status meant the defendant could legitimately take the proceedings seriously. However, this did not entitle unlimited expenditure, and the court noted the bill had already been reduced by nearly 27% during line-by-line assessment.

A significant factor was the dismissal of numerous Points of Dispute for insufficient particularisation. The court held it would be inherently unfair to allow the claimants to achieve through proportionality what they had failed to achieve through properly formulated challenges. This would effectively permit reduction “through the back door” despite the claimants’ procedural failures.

The court concluded that the assessed costs of £55,581.38 for Part 1 were not disproportionate when all factors were properly considered. The reasonable costs were also proportionate costs, and no further reduction was warranted. The court emphasised that proportionality had already been partially considered during line-by-line assessment, particularly regarding hourly rates and fee earner grades, making further reduction inappropriate.

Implications

This case demonstrates several principles for costs practitioners. Mathematical formulae based on claim value multiples will not survive scrutiny – courts must consider all CPR 44.3(5) factors without giving special weight to monetary value alone. Track allocation decisions carry weight in proportionality assessment, particularly where judges depart from normal expectations based on case characteristics.

The decision reinforces that properly particularised Points of Dispute remain essential. Attempting to achieve reductions through proportionality arguments after failing to mount specific challenges during line-by-line assessment will not succeed. Courts will consider whether allowing such reductions would be unfair to the receiving party.

The case also shows how wider factors like reputational damage and potential satellite litigation can influence proportionality assessment, provided the receiving party can demonstrate genuine concerns rather than speculative risks.

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STOCKLER AND ANOTHER V THE CORPORATION OF THE HALL OF ARTS AND SCIENCES [2025] EWHC 2262 (SCCO) | DEPUTY COSTS JUDGE JOSEPH | CPR PART 44.3 | CPR PART 44.4 | STANDARD BASIS | INDEMNITY BASIS | PROPORTIONALITY | DETAILED ASSESSMENT | POINTS OF DISPUTE | AINSWORTH V STEWARTS LAW LLP [2020] EWCA CIV 178 | WEST AND DEMOUILPIED V STOCKPORT NHS FOUNDATION TRUST [2019] COSTS LR 1265 | WRAITH V SHEFFIELD FORGEMASTERS LTD [1998] 1 WLR 132 | GEORGE V THE CORPORATION OF THE HALL OF ARTS AND SCIENCES [2025] EWHC 1979 (CH) | LONDON 2 RATE | COSTS MANAGEMENT | SUMMARY JUDGMENT | CPR PART 24 | CPR PART 3.4(2)(A) | UNREASONABLE CONDUCT | GRADE A FEE EARNER | GRADE B FEE EARNER | LINE-BY-LINE ASSESSMENT | NON-MONETARY RELIEF | COSTS SHIFTING | FAST TRACK | SMALL CLAIMS TRACK | ACCOUNT CLAIMS | CONTRACTUAL CONSTRUCTION | TICKET RETURN SCHEME | DISMISSAL FOR DISPROPORTIONATE COST | CONDUCT OF PARTIES | LEGAL REPRESENTATION BY SOLICITOR CLAIMANT | ELECTRONIC BILL OF COSTS | COSTS CONSEQUENCES OF TRACK ALLOCATION | CHRONOLOGY FILTERING IN ELECTRONIC BILL | MULTIPLE TRACK ALLOCATION RISK | APPORTIONMENT BY PARTS IN BILL | ARBITRARY COST MULTIPLES REJECTED | BUNDLING AND SKELETON ARGUMENTS COSTS | APPEAL COSTS ASSESSMENT | IMPACT ON REPUTATION | RELIANCE ON CPR RULES OVER FORMULAE | NATIONAL ARCHIVE JUDGMENT RELEASE | NON-COMPLIANCE WITH AINSWORTH PRINCIPLES | COST CONSEQUENCE OF INADEQUATE PARTICULARISATION | REPRESENTATION BY COUNSEL VS LITIGANT IN PERSON | ROLE OF PRECEDENT IN PROPORTIONALITY EVALUATION.