SUMMARY ASSESSMENT OF COSTS: HOURLY RATE TOO HIGH AND LAWYERS SHOULD LEARN TO DELEGATE

In Rushbrooke UK Ltd v 4 Designs Concept Ltd [2022] EWHC 1416 (Ch) HHJ Paul Matthews (sitting as a Judge of the High Court) considered the costs to be paid to a successful respondent.  The judge did not allow the rates claimed and found that some of the work could have been done by more junior fee earners.

 

“One of the important skills of a solicitor is to know how to delegate less important work to less expensive fee-earners.”

THE CASE

The claimant brought proceedings to restrain presentation of a winding up petition. That application was dismissed. The judge then considered the basis, and amount, of the respondent’s costs. He did not accept that costs should be assessed on the standard basis. The respondent’s bill was then considered.  Two particular points were made in reduction: the hourly rate was too higher; there should have been delegation of some of the tasks.

THE JUDGMENT ON COSTS

Mode of assessment, and quantum
    1. I turn therefore to the question of assessment. This was an application which lasted less than one day. Therefore the general rule is that the court should assess the costs summarily: CPR rule 44.6, PD 44 para 9.2. No good reason not to do so was suggested to me, and I can see none. I will therefore assess them summarily. The applicant objects that the updated costs schedule was not served in accordance with CPR PD 44 para 9.5(4)(b). It was served on 13 May 2022. I agree that it was not served in time. But costs statements are short, and the substance of them can be taken on board in a matter of minutes. There are plenty of cases in the books where the court has proceeded with a summary assessment of costs based on assessment delivered to the other side only a short time before the hearing. The reality in this case is the applicant has had sufficient time to consider and take instructions on the contents of the updated costs schedule, and will suffer no prejudice as a result. I will therefore take into account both the original and the updated schedules.
    1. The first objection taken by the applicant is that the respondent’s solicitor is a grade A fee-earner, practising in Bristol, in national band 1 of the costs guideline hourly rates, and the relevant rate is therefore £261. However, he has apparently charged at the rate of £350, £89 more. Secondly it is complained that there was no delegation to a less expensive fee-earner for those parts of the work which could properly be done by such a fee-earner. No objection is taken to counsel’s fees, either in the first or the updated costs schedules. The respondent contends that the hourly rate of £350 for the respondent solicitor should be allowed by the court, and that there has been no attempt to identify work which could have been more properly incurred by a lower level of fee-earner.
    1. In my judgment, both criticisms of the respondent’s costs schedules by the applicant have some force. The new costs guideline hourly rates came into force in October 2021. They are of course merely guidelines, but they represent a consensus view of what average work should cost in particular areas of the country (so taking into account regional variations) and the experience and expertise of the relevant fee-earner. I see nothing in the present case to suggest that the work done here was above average either in difficulty, or in complexity, or in novelty, or in importance to the client, or in some other way. This was, if I may respectfully say so, typical business work. A figure slightly above the guideline, so to say, within touching distance of it, would not be too high. A figure £89 (34%) above the guideline in my opinion is too high.
    1. Secondly, I am unhappy with the notion that everything here has been done by a single grade A fee-earner. One of the important skills of a solicitor is to know how to delegate less important work to less expensive fee-earners. Sometimes it is said that, well, there was no one else to delegate to (I do not know whether that is the case here). The answer to that plea, of course, is that, as between himself and his solicitor, the client is quite entitled to insist on the grade A fee-earner doing everything. On the other hand, as between him and his opponent, he or she is not necessarily entitled to require the opponent to pay for it. At that stage the question is instead whether the costs are reasonably incurred and reasonable in amount. And reasonableness takes account of potential delegation. Moreover, it is not for the paying party to have to identify work which could have been done by a more junior fee-earner. In my former experience over 30 years as a practising commercial litigation solicitor, there were no litigation cases that I was involved in in which no work whatsoever could have been delegated to a more junior lawyer. In the present case, for whatever reason, it seems that it has simply not been considered. For example (and it is only an obvious example), there was no need for the grade A fee-earner to attend at the hearing and sit behind experienced counsel, who did all the advocacy. A grade C or D fee-earner would have been fine.
  1. For both these reasons, therefore, I consider that the quantum of costs claimed by the respondent is too high. At the same time, a summary assessment of costs is not a “line by line” exercise, but much more “broadbrush”: see eg Football Association Premier League v The Lord Chancellor [2021] EWHC 1001 (QB), [20]. As I have said, the total sought by the respondent is £8988, including VAT. Looking at the matter in the round, and reducing the solicitors’ costs for both excessive rates and failure to delegate, I will award a total of £6600, plus VAT of £1320, making a total of £7920.