7 April 2022

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“Clear and compelling” case needed to exceed guideline rates, says Court of Appeal

Parties seeking hourly rates above the guideline hourly rates (GHR) need to make a “clear compelling” case for them, the Court of Appeal has said.

Issuing a strong message in a short ruling, Lord Justice Males said it was not enough for the receiving party simply to point to the nature of the case.

In Samsung Electronics Co Ltd & Ors v LG Display Co Ltd & Anor (Costs) [2022] EWCA Civ 466, it was common ground that the respondent/defendant should have the costs of an appeal, to be summarily assessed on the standard basis.

It claimed nearly £73,000, with its solicitors – US firm Cleary Gottlieb Steen & Hamilton – billing in dollars at rates of between $1,045 and $1,476 per hour for grade A fee-earners and $578 to $918 for grade C fee-earners.

At the conversion rate used, these are equivalent to charges between £801 and £1,132 and £443 to £704 respectively. The guideline hourly rates for London 1 solicitors are £512 for grade A and £270 for grade C.

Males LJ said: “The guide [to the summary assessment of costs] recognises that in substantial and complex litigation an hourly rate in excess of the guideline figures may sometimes be appropriate, giving as examples ‘the value of the litigation, the level of the complexity, the urgency or importance of the matter, as well as any international element’.

“However, it is important to have in mind that the guideline rates for London 1 already assume that the litigation in question qualifies as ‘very heavy commercial work’.”

He said LG had not attempted to justify the rates claimed except to say that exceeding the GHR was almost always the case in competition litigation.

Males LJ said: “I regard that as no justification at all. If a rate in excess of the guideline rate is to be charged to the paying party, a clear and compelling justification must be provided.

“It is not enough to say that the case is a commercial case, or a competition case, or that it has an international element, unless there is something about these factors in the case in question which justifies exceeding the guideline rate.

There is nothing in the present appeal to justify doing so. This was a one-day appeal, where the only issue was the appropriate forum for the trial, the documentation was not heavy, and the amount claimed (£900,000) was modest by the standards of commercial cases.”

The judge largely accepted LG's submission that it allocated work to more junior lawyers where possible and that the allocation between solicitors and a single junior barrister was appropriate. But he reduced the costs to £55,000.

Lords Justice Snowden and Lewison agreed.

Robert O'Donoghue QC & Tom Pascoe (instructed by Covington & Burling) for the appellants/claimants. Daniel Piccinin (instructed by Cleary Gottlieb Steen & Hamilton) for the respondents/defendants.