Costs News

28 October 2020
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CAT rules £740,000 as reasonable sum for costs of one-day hearing on disclosure

The Competition Appeal Tribunal (CAT) has summarily assessed costs of £740,000 for defendants in the truck cartels litigation as reasonable for a one-day hearing on a disclosure application.

However, Mr Justice Roth, president of the CAT, refused to order that the claimants pay them before the conclusion of the case.

The litigation, valued at around £4bn, follows on from the 2017 decision of the European Commission to fine five truck manufacturer groups nearly €3bn (£2.6bn) for price fixing and other cartel activities between 1997 and 2011.

The application for specific disclosure was “on any view a very significant application in high-value proceedings”, Roth J said, but the five defendants sought £1.4m in costs – “by any standards, an enormous sum for an application of this kind”.

The CAT has broad discretion as to costs. It is not governed by the CPR but, where its rules are the same or similar, they are interpreted in line with the CPR.

In Ryder Limited and Another v MAN SE and Others [2020] CAT 21, the tribunal went through the costs claimed in a broad-brush manner. Roth J said that, though the guideline hourly rates were “a helpful starting point”, they were 10 years old and “I consider that specialist competition partners can reasonably charge a premium rate”.

He followed his approach in Breasley Pillows Ltd v Vita Cellular Foams (UK) Ltd [2016] CAT 9, that a reasonable rate for a competition law partner (and thus a grade A solicitor) in a City of London firm for competition litigation should not exceed £600 per hour. He continued that £300-400 per hour was reasonable for grade B solicitors. “I do not consider that the period between the ruling in Breasley Pillows and the present hearing justifies any increase.”

A reasonable rate for grade C should not exceed £275 – with lower figures for more junior grade C solicitors – and for grade D the rate should be £120-£175.

“Some, but not all, of the defendants’ solicitors have charged in excess, and in some cases significantly in excess, of these rates. Given the very large number of hours worked, the cumulative effect is substantial. I do not accept that the relative complexity of the present proceedings in itself justifies an uplift to the hourly rates,” Roth J said.

“The complexity of the proceedings is reflected in the number of hours spent and the degree to which more senior solicitors have to be involved, but not in the reasonable rates for each hour’s work.”

The judge was critical of the “extraordinary” number of fee-earners attending the hearing – between four and six for each defendant, in addition to counsel.

“I do not see that any of the defendants’ solicitors reasonably needed to attend the hearing by more than one partner, one associate and a trainee or paralegal to assist on finding documents. If any further assistance was needed on a particular document, these days it is always possible for a member of the team to send a text message to a solicitor in the office with a particular query, or if necessary to leave the tribunal to make a telephone call.

“It is not reasonable to have such large teams spending six hours in court [plus travelling] at very substantial cost.”

He went on to cut the costs sought for dealing with documents – for example, he only allowed three hours for solicitors to review a 10-page skeleton, with one defendant claiming 28 hours – and the amount of time solicitors were involved in preparing the bundles. This was work for trainees and paralegals with “limited oversight” from junior solicitors, he said. One defendant sought 57 hours of lawyer time and only three hours of trainee/paralegal time.

He acknowledged that the total fees allowed of £740,000 was still “an exceptionally high sum” for a disclosure application that lasted only one day.

But having taken proportionality into account when assessing the various constituent elements, he concluded that the aggregate figures were “appropriate given the way in which Ryder brought its application, supported by an extensive and detailed documentary analysis, without engaging first with the defendants by correspondence and giving them relatively little time to prepare their responses.

“Moreover, Ryder’s application in seeking to broaden the scope of its claim had very significant implications for all the defendants. I therefore see no justification for making any further reductions.”

The CAT rejected the defendants’ submission that the costs should be paid within 14 days of assessment.

Roth J said: “This was one application for disclosure among several that have been, and no doubt will continue to be, made in complex proceedings for which no trial date has yet been set. In determining other applications in these proceedings, the CAT often orders costs in the case.

“In those circumstances, while it is possible to determine the amount that Ryder should pay in respect of this application, I do not consider it just that Ryder should be required to make that payment now, when costs which it may receive under other costs orders will be due only some considerable time in the future.

“Of course, it may be that Ryder will recover no costs, but that uncertainty does not, in my view, justify imposing upon it the burden of a large ‘up-front’ payment.”

He added that this was very different from the position when a discrete issue or aspect of the case was subject to full argument and a determinative judgment, as happened with a preliminary issue about the decision of the European Commission.

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