COST BITES 144: SUMMARY ASSESSMENT, REDUCED FROM £42,267 TO £22,000: A CASE IN POINT

April 12, 2024 · by · in Assessment of Costs, Costs, Summary assessment,

One of the aims of this series is to look at costs issues that would not normally be examined.  This is so practitioners can get a “feel” as to what actually goes on in court.  A good example of this is the judgment of Christopher Hancock KC sitting as a High Court Judge in Saudi Arabian Airlines Corporation v Sprite Aviation No. 6 DAC [2024] EWHC 797 (Comm).

“My principal reason for the reduction in the costs claimed is my view that only one Counsel should have been instructed, and that a junior. I do however bear in mind the other points made by the Claimant, but overall take the view that, apart from the point that only a junior Counsel was necessary for the hearing, no very significant reduction should be made in relation to those other points.“

THE CASE

The judge had earlier declined to answer a preliminary issue but agreed with the defendant’s contentions that the matter should be reserved to the trial judge.  The claimant was ordered to pay the defendant’s costs.

THE SUMMARY ASSESSMENT

 

 

    1. Accordingly, I decided that the costs of the argument on 25 March be paid by the Claimant to the Defendant.

 

    1. It now falls to me to summarily assess the costs of the argument on costs. I received written submissions from both parties on that topic, and a bill of costs from the Defendant, which totalled £42,267.31. The Defendant recognised that it could not claim 100% of those costs, but argued for a recovery of between 60% and 80% of that figure.

 

    1. The Claimant argued that I should only award some £9,540.92, being about 20-25% of the costs claimed. In this connection, the Claimant raised various points, as follows:

 

(1) First, the Claimant argued that the hourly rates charged were too high, being significantly above the guideline rates for London firms doing heavy commercial work.

(2) Secondly, the Claimant argued that there was an inappropriate usage of grade A fee earners, since all work charged in the statement of costs was done by grade A fee earners. Instead, it was argued, a range of fee earners at varying rates should have been used.

(3) The amount of time spent was excessive and should be cut by a total of 6 hours.

(4) Counsel’s fees were excessive, for a number of reasons:

(a) The hearing did not require two counsel, and junior counsel alone would have been sufficient.

(b) Had junior counsel alone been instructed, the fees could have been reduced from £22,000 to about £5,000, a saving of £17,000.

    1. In response to these arguments, the Defendant argued as follows:

 

(1) The Claimant’s arguments took no account of the fact that there had had to be two hearings and not one, through no fault of the Claimant or Defendant.

(2) The criticism of the hourly rates was misplaced given the very specialist nature of the dispute and the fact that both parties were instructing similar firms in this regard.

(3) The choice to use higher rate fee earners served to reduce rather than increase costs, due to the fact that those fee earners had had closer contact with the dispute. The amounts charged were lower than those charged by the Claimant.

(4) As to the time spent, in fact the Defendant’s representative spent less than the Claimant’s.

(5) It was reasonable to instruct leading and junior counsel for both hearings, in view of the fact that leading counsel had conducted the advocacy at the hearing itself. The suggestion that in the Commercial Court the current practice is to instruct juniors to deal with costs is misplaced, since the Commercial Court Guide simply states that it may be appropriate for argument about costs or other consequential matters to be conducted by junior Counsel.

    1. I do not think it is necessary or appropriate for me to approach this summary assessment on anything other than a broad brush basis. I have concluded that the amount which the Claimant should pay the Defendant in respect of these two hearings (bearing in mind all of the above submissions and giving due regard to each of them) is £22,000. My principal reason for the reduction in the costs claimed is my view that only one Counsel should have been instructed, and that a junior. I do however bear in mind the other points made by the Claimant, but overall take the view that, apart from the point that only a junior Counsel was necessary for the hearing, no very significant reduction should be made in relation to those other points.

 

 

 

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