CPR 44.3(5) Factors Considered | Proportionality Reduction Applied To Internal Communications Following Line-By-Line Assessment

XX v Jordan Young & Aviva Insurance Limited [2025] EWHC 2073 (SCCO)

XX (A PROTECTED PARTY BY HER HUSBAND AND LITIGATION FRIEND YY) & ZZ V JORDAN YOUNG & AVIVA INSURANCE LIMITED [2025] EWHC 2073 (SCCO)

In XX v Jordan Young & Aviva Insurance Limited [2025] EWHC 2073 (SCCO), Costs Judge Nagalingam reduced costs of £517,985 to £324,029.77 following settlement of a personal injury claim pleaded at £1.5m for £149,000 . The judge noted that “reductions of costs of around one third are not untypical following a full line by line detailed assessment,” with the initial assessment cutting the bill by 34.4% to £339,565.16. He proceeded to work through the factors in CPR 44.3(5) to determine proportionality. In determining the “sums in issue”, the judge adopted a “notional bracket of possible outcomes without descending into the improbable” rather than limiting consideration to the ultimate settlement figure, however determining that “the sums in issue would realistically have been closer to £149,000 than the £2.5m fully pleaded claim.” In respect of vulnerability, the court found that “the combination of the factors of isolation, injury recovery, the Claimant’s age, and language barriers meant that at times the receiving party solicitors were dealing with a vulnerable client.” On conduct under CPR 44.3(5)(d), the judge confirmed that this requires no finding of misconduct or even poor conduct, but simply whether the paying party’s approach “caused additional work to be done“, finding “Until a Claimant is in receipt of a proposal to settle then there is little by way of reasonable criticism that may be raised where they continue with the litigation until a suitable offer is made or the matter finally decided by a decision of the court.” In terms of complexity, he noted that the extent of the clamant’s injuries were significant. This created  not only medical but also “legal complexity in quantifying general damages and past losses, as well as the work required to establish what future heads of loss might be.” After finding the assessed sum remained disproportionate under CPR 44.3(5), the judge made just one further targeted reduction on proportionality grounds, to internal communications from the assessed figure of £22,946.15 to £10,000 plus VAT.
Link to full judgment

Having taken into account all of the pleaded points of dispute and replies, the skeleton arguments, the oral submissions of Ms McDonald, Mr Mason and Mr Scott, and the factors in CPR 44.3(5) I have arrived at the conclusion that the assessed sum is disproportionate in all the circumstances. Following West, the approach of the assessing court should not be to simply declare what the proportionate figure is, but rather consider where the bill might be reduced further and if such further reductions yield a proportionate figure.

Citations

West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220 When assessing costs, the court must first conduct a line by line assessment before considering proportionality, ensuring that reductions are not duplicated across both stages.  
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Key Points

  • In assessing proportionality, the court must first undertake a full line-by-line assessment before considering any further reductions; proportionality may only be applied subsequently to address whether the resulting figure is disproportionate. The Court of Appeal “did not categorically rule out accounting for proportionality during the course of an assessment, but one must be careful not to facilitate a result which would amount to double-counting of deductions.”
  • Reductions of costs of around one third are not untypical following a full line by line detailed assessment of costs in the SCCO.
  • A costs judge may further reduce specific categories of costs—such as internal communications—on a broad brush basis if the total assessed figure is deemed disproportionate after line-by-line assessment and proportionality review. “The approach of the assessing court should not be to simply declare what the proportionate figure is, but rather consider where the bill might be reduced further and if such further reductions yield a proportionate figure.“
  • The rules reference ‘conduct’ in natural and neutral language. There is no requirement to make findings of misconduct on the paying party, or even poor conduct. It is simply a consideration of whether the paying party conducted their opposition in a manner which caused additional work to be done. “Until a Claimant is in receipt of a proposal to settle then there is little by way of reasonable criticism that may be raised where they continue with the litigation until a suitable offer is made or the matter finally decided by a decision of the court.“
  • The settlement sum is not the sole indicator of the “sums in issue” for proportionality analysis; rather, the court may assess a realistic bracket of potential outcomes based on pleadings and case circumstances, avoiding reliance on merely nominal or extreme figures.

"I rejected the assertion that on an assessment of costs I could retroactively conduct a trial of an issue that the Defendant had alleged but neglected to run to trial as an argument... The fact that the agreed terms of settlement express damages as net of contributory negligence clearly demonstrate agreement that the gross value was in excess of £149,000 such that even if an exaggeration argument was made out, it would not extinguish the fact that the gross settlement sum must be in excess of £149,000."

Key Findings In The Case

  • The court found that the total assessed costs of £339,565.16, following a full line-by-line assessment, were still disproportionate to the issues in the proceedings, necessitating further reductions to achieve a proportionate result [49–50].
  • A further broad brush reduction was applied specifically to internal communications from £22,946.15 plus VAT to £10,000 plus VAT, as this category of costs was marked out in the Points of Dispute and considered disproportionately high in light of the case as a whole [51–54].
  • The Points of Dispute advanced by the Defendants on proportionality were deemed too vague to justify greater reductions at the assessment stage; the court found that more precise, well-argued objections are necessary for successful challenges to specific costs [8, 12].
  • The judge determined that the reasonable “sums in issue” for proportionality analysis lay in a notional bracket between the pleaded claim of £2.5 million and the eventual settlement of £149,000, noting that the true value was likely nearer the latter figure due to factors including contributory negligence [20–24].
  • The court concluded that various contextual factors – including the Claimant’s language barriers, physical and emotional vulnerability, and the logistical circumstances of the Covid-19 pandemic – were relevant in justifying aspects of the incurred costs, particularly by supporting higher base costs related to client care and communication [36–38].

"There is no automatic presumption that a Claimant of advanced years alone equates to vulnerability. However, there are a combination of factors in this matter which lead me to conclude that the vulnerability of the Claimant is a relevant factor... In my view, the combination of the factors of isolation, injury recovery, the Claimant's age, and language barriers meant that at times the receiving party solicitors were dealing with a vulnerable client."

The Senior Courts Costs Office has provided valuable guidance on proportionality principles in a personal injury case where a bill totalling £517,985 was reduced by over £193,000 following detailed assessment. In XX v Jordan Young & Aviva Insurance Limited [2025] EWHC 2073 (SCCO), the court examined how vulnerability factors under CPR 44.3(5)(f) interact with proportionality considerations, whilst also clarifying the court’s jurisdiction regarding retrospective conduct allegations.

The Costs Context

The costs dispute arose from personal injury proceedings that settled for £149,000 net of contributory negligence, having been pleaded at up to £2.5 million. Leigh Day’s bill comprised profit costs of £349,826.92, counsel’s fees of £39,638.54, other disbursements of £43,783.05, and VAT of £84,736.49. The defendants challenged whether costs exceeding £500,000 bore a reasonable relationship to the settlement achieved.

Following a three-day detailed assessment before Costs Judge Nagalingam, the initial line-by-line assessment reduced the bill to £339,565.16, representing a 34.4% reduction. However, the court’s proportionality analysis resulted in further cuts, ultimately bringing the total down to £324,029.77.

The Proportionality Assessment | West v Stockport Applied

The court applied the mandatory approach established in West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220, completing the line-by-line assessment before considering proportionality. Having given a preliminary indication that the costs as claimed appeared disproportionate, Costs Judge Nagalingam analysed each factor under CPR 44.3(5).

Sums in Issue | Beyond Settlement Figures

The court rejected any limitation to the £149,000 settlement figure. Instead, it adopted a “notional bracket” approach spanning £149,000 to £2.5 million as representing the range of possible outcomes. The judge concluded, however, that whilst the true value exceeded £149,000, it was realistically closer to that figure than the pleaded maximum.

The court noted that the settlement terms expressly referenced contributory negligence, indicating the gross value exceeded the net settlement regardless of any conduct arguments.

Complexity and Conduct Factors

The litigation was neither straightforward nor particularly complex. Liability remained disputed throughout, with significant injuries creating medical complexity that generated legal complexity in quantifying damages. The court recognised that the defendants’ conduct in keeping liability live without making early settlement proposals generated additional work for the claimants.

Claimant Vulnerability | Multiple Contributing Factors

The court determined that claimant vulnerability was a relevant factor under CPR 44.3(5)(f). The judge identified several contributing factors:

  • Significant physical injuries sustained by the claimant
  • Impact on family members from the same incident
  • Isolation during Covid-19 lockdowns affecting a previously sociable individual
  • Language barriers requiring interpreters for documentation
  • The claimant’s age and specific dialect requirements

The court emphasised there is “no automatic presumption that a Claimant of advanced years alone equates to vulnerability,” but found the combination of factors meant the solicitors were dealing with a vulnerable client requiring additional work.

Surveillance Evidence and Retrospective Conduct Allegations | Court’s Jurisdictional Limits

The defendants tried to use the assessment proceedings to establish misconduct and exaggeration based on surveillance evidence, despite having already agreed settlement terms and a standard basis costs order. The court firmly rejected this approach, stating: “I rejected the assertion that on an assessment of costs I could retroactively conduct a trial of an issue that the Defendant had alleged but neglected to run to trial as an argument.”

The judgment clarifies that agreed terms in costs orders referring to conduct do not create a gateway for retrospective determinations of issues not pursued at trial. Such clauses are unnecessary as parties can always raise conduct issues in points of dispute.

The Final Proportionality Reduction | Internal Communications Targeted

Despite finding vulnerability factors, the court concluded the assessed sum remained disproportionate. Rather than applying a broad percentage reduction, the court adopted a targeted approach, identifying internal communications as requiring further scrutiny.

This element had already been reduced from £27,724.50 to £22,946.15 during line-by-line assessment but was cut further to £10,000 plus VAT on a broad brush basis. The court considered this reasonable for the case circumstances, resulting in base profit costs (excluding assessment costs) of £169,534.99 plus VAT.

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XX V JORDAN YOUNG & AVIVA INSURANCE LIMITED [2025] EWHC 2073 (SCCO) | COSTS JUDGE NAGALINGAM | CPR 44.3(5) | PROPORTIONALITY | LINE BY LINE ASSESSMENT | INTERNAL COMMUNICATIONS | WEST V STOCKPORT NHS FOUNDATION TRUST [2019] EWCA CIV 1220 | DEEMING ORDER | CONTRIBUTORY NEGLIGENCE | VULNERABLE CLIENT | SURVEILLANCE EVIDENCE | EXAGGERATION ALLEGATIONS | STANDARD BASIS COSTS ORDER | BASE PROFIT COSTS | DETAILED ASSESSMENT | REASONABLE RELATIONSHIP TEST | DISPUTED LIABILITY | PART 36 OFFER OBLIGATIONS | NON-MONETARY RELIEF | MEDICAL COMPLEXITY | JOINT SETTLEMENT MEETING | COVID-19 PANDEMIC IMPACT | TURKISH DIALECT INTERPRETING | SENIOR COURTS COSTS OFFICE | SCCO REDUCTION RATIOS | AGREED SETTLEMENT SUM | MULTI-TRACK ALLOCATION | REASONABLE INTERNAL COMMUNICATION COSTS | RETROACTIVE TRIAL | HOURLY RATES | SCOPE OF COSTS ASSESSMENT | WIDE RANGE OF PLEADED DAMAGES | EXPERT EVIDENCE DISCLOSURE | CONDUCT IN COSTS ASSESSMENT | CCMC ADJOURNMENTS | SCOPE OF PROPORTIONALITY ANALYSIS | BROAD BRUSH REDUCTION | AGREED ORDER TERMS | COSTS OF ASSESSMENT HEARING | SKELETON ARGUMENTS | NEUTRAL LANGUAGE UNDER CPR 44.3 | VALUE OF CLAIM | SETTLEMENT NET OF CONTRIBUTORY NEGLIGENCE | DWF LAW LLP | LEIGH DAY | MR MASON | MR SCOTT | MS MCDONALD | QB-2020-000273 | SC-2024-BTP-000582