Taxation of Costs in UK Law

This acceptance is because a judgment for costs to be taxed is to be treated in the same way as a judgment for damages to be assessed, where the amount ultimately ascertained is treated as if it was mentioned in the judgment - no further order being required.

The principle is simply that costs are normally to be paid in compensation for what the receiving party has or is obliged himself to pay.

Proportionality played no part in the taxation of costs under the Rules of the Supreme Court. The problem with that test, standing on its own, was that it institutionalised, as reasonable, the level of costs which were generally charged by the profession at the time when the professional services were rendered. If a rate of charges was commonly adopted it was taken to be reasonable and so allowed on taxation even though the result was far from reasonable.

The reference in 11.2 to costs "which are necessary" is the key to how judges in assessing costs should give effect to the requirement of proportionality. If the appropriate conduct of the proceedings makes costs necessary then the requirement of proportionality does not prevent all the costs being recovered either on an item by item approach or on a global approach. The need to consider what costs are necessary is not a novel requirement.

I find it difficult to see why the law should not now recognise one standard of costs as between litigants and another when those costs form a legitimate item of damage in a "separate cause of action flowing from a different and additional wrong. It helps to keep down extravagance in litigation and that is a benefit to all those who have to resort to the law.

I am fortified in this view by the decision of Sir Robert Megarry, Vice Chancellor, in the case of In re Gibson's Settlement Trusts [1981] Ch 179. In that case the Vice Chancellor decided that, on an order for the payment of costs of proceedings, costs incurred before the proceedings commenced would not be disallowed solely on that account.

The basic proposition is that the conduct of a trial is essentially within the discretion of the learned judge. There is no statutory obligation to give any indication of the powers or their proposed exercise under Order 62 rule 9. To allow a detailed investigation of the figures, as suggested in the second ground of the notice of appeal, would, as we have already indicated, fly in the teeth of the provisions and objective of Order 62 rule 9 itself.