15 June 2022

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Judge reduces costs over grade A fee-earner’s failure to delegate

High Court also finds no justification for solicitor to claim hourly rate pitched 34% higher than the guidelines

The High Court has reduced the costs claimed by a successful party because their grade A solicitor charged much more than the new guideline hourly rate and failed to delegate at all to lower-grade fee-earners.

His Honour Judge Matthews, sitting in Bristol as a High Court judge, said he had never come across a case during his time in practice where some work could not be delegated to a more junior fee-earner.

Rushbrooke UK Ltd v 4 Designs Concept Ltd [2022] EWHC 1416 (Ch) followed his decision to strike out the claimant company's application for an injunction to restrain presentation of a winding-up petition.

The respondent sought costs of £9,000 (including VAT), which the judge summarily assessed and then found “some force” in the applicant’s objections about the hourly rate and lack of delegation. The respondent's solicitor was a grade A fee-earner practising in Bristol; the guideline hourly rate was £261 but he charged at £350.

HHJ Matthew said: “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.”

He continued that he was “unhappy” that everything was 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 [as the respondent had contended].

“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.” (His emphasis)

In this case, the judge went on, it appeared that delegation had 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.” He reduced the costs to £7,900, including VAT.

The updated costs schedule was not served in time but the judge decided to press ahead with the assessment. Costs statements were “short” and their substance could be taken on board “in a matter of minutes”, HHJ Matthews said.

“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.”

Also in the ruling, the judge rejected an application to make one of the applicant’s two directors personally liable for the costs. While he considered the merits of the non-party costs application were not strong enough, there was in any case a procedural problem because there had been no application to join the director to the proceedings.

Charlie Newington-Bridges (instructed by Neath Raisbeck Golding Law) for the applicant. John Churchill (instructed by Temple Bright) for the respondent. Applications dealt with on paper.