A BIT MORE ABOUT HOURLY RATES: TWO NATIONS?

This morning we looked at the case of EVX v Smith [2022] EWHC 1607 (SCCO),  a case about hourly rates.  The costs judge making an observation that £315 – £320 an hour was the appropriate rate for a Grade A fee earner involved in a clinical negligence case on behalf of a child.  It is interesting to look at the hourly rates allowed in Eurosail-UK 2007-4BL Plc & Ors v Wilmington Trust SP Services (London) Ltd & Anor [2022] EWHC 1019 (Comm). Commercial lawyers are paid twice as much.

“a sum in excess of £800 an hour is in excess of what is reasonable and must be reduced. What I propose to do is to direct that there should be a composite rate for all Grade A fee earners, both Mr. Shattock and Mr. Fisher, at the rate of £650 an hour.”

THE CASE

HHJ Pelling QC was hearing an application to strike out claims.  The applications were unopposed. The judge ordered that the defendants pay the costs.

THE RATES

1. 13. So far as that is concerned, I have perused the hours for which payment is claimed. There is no reason that I have identified for reducing the hours that have been claimed other than possibly in relation to the preparation of the application, line 2 of the work done on documents, where a total of 41 hours has been claimed in respect of the preparation of the application, including supporting evidence, by Mr. Shattock. That is a figure which might strike one as high in the circumstances, particularly when there are additional substantial hours for Mr. Fisher and Mr. Olins as well for for counsel in respect of drafting work. However, I accept the point made by Mr. Mott that this was a case where a significant amount of work had to be done in order to ensure that the application could properly be presented on the assumption that the judge before whom the application came had no familiarity with the modus operandi that surrounds these cases. So far as that is concerned, I accept that point as far as it goes because although all these cases are currently being heard by me, when issued in the Commercial Court, if available, that is not generally or publicly known, and in any event depends on me being available.

1. 14. In those circumstances, I accept, particularly having regard to the fact I have ordered costs to be assessed on the indemnity basis, that the figures for which payment is claimed in relation to the preparation of the application are reasonable or at any rate any doubts I might have in relation to that are so vestigial that they ought to be resolved in favour of the receiving party as against the claimant party.

1. 15. The only issue which remains concerns counsel fees. So far as that is concerned, I am satisfied on the similar basis to what I have said previously in relation to the work done on documents that the figures claimed, while at the high end of what is appropriate for work on documents and the like, are acceptable.

1. 16. So far as the hearing is concerned, £15,000 for counsel is in excess of what is reasonable, even having regard to the work that had to be done in relation to the skeleton. It is unreasonable not least because of the familiarity counsel would have with the issues that arise by reason of the work done on documents, and I reduce that to £10,000.

1. 17. So far as the solicitor charge out rates are concerned, Mr. Mott submits that I should simply adopt the rates for which payment has been claimed on the basis that this is an indemnity costs case. In my judgment that is a too simplistic approach because the issue is not a binary one. The question I have to ask is what is the reasonable sum which ought to be recovered. That might be the guideline rate, it might be the contractual rate or it might be something between the two.

18. Having regard to the fact that this is an indemnity cost case, I am prepared to accept that in principle I should assess the hourly rate to the figure, at any rate, slightly in excess of the guideline rates to reflect the fact that while it might not be proportionate it was certainly reasonable for the applicants to instruct their corporate solicitors to deal with this case. Nonetheless, a sum in excess of £800 an hour is in excess of what is reasonable and must be reduced. What I propose to do is to direct that there should be a composite rate for all Grade A fee earners, both Mr. Shattock and Mr. Fisher, at the rate of £650 an hour. So far as Mr. Olins is concerned, he is a paralegal and is being charged at £257 an hour. The guideline rate for London 1 is £186 per hour. I direct that his hour should be assessed at a rate of £200 an hour.

AN ADDENDUM FROM TWITTER HOURLY RATE OF £725 AN HOUR ALLOWED

I am grateful to Tweeter Ben @FaringForwards for sharing information about an assessment yesterday.

“FWIW, the senior costs judge yesterday allowed £725 grade A for a £24 million commercial case conducted in 2019-2021

The case was Nimer v United Al Saqer Group. The senior costs judge allowed the following rates:

Partner (A): £725;

employed barrister (A):

£625; Senior Associate (A/B):

£520; Associate (B):

£400; Associate (C):

£325;

Costs draftsman: £235;

Trainees & paralegals (D): £195″

FROM THE COMMENTS SECTION

In case people don’t read the comments section I have taken one comment and copied it here.

“In the County Court we are a Tier 2 region. We are allowed to charge £251 per hour whether the work is civil or commercial (we’re a High Street Firm), We’ve tried to claim higher rates, without success AND we’re regularly being knocked down to Grade B or Grade C rates, even though our department consists entirely of 2 Grade A fee earners, doing all the work (including the clerical work, typing, photocopying etc for which we cannot, of course, charge). How are either of these reported cases real life? It’s correct in my experience that if one comes up against a large commercial Firm, they invariably get awarded higher rates and higher costs because they have “teams” of so many fee earners and others working on the case. This is what needs sorting out, in my view”