Exceeding guideline hourly rates

In Rushbrooke UK Ltd v 4 Designs Concept Ltd [2022] EWHC 1416 (Ch) HHJ Paul Matthews, sitting as a Judge of the High Court in Bristol, considered the costs claimed by a successful respondent. 

The claimant brought proceedings to restrain presentation of a winding up petition. That application lasted less than one day and was dismissed. Therefore the Court assessed the costs summarily as per CPR 44 PD 9.2.

An updated costs schedule was not served in time, but it was permitted because, in general, costs statements are short, and the substance of them can be taken on board in a matter of minutes. The judge found that the applicant had sufficient time to consider and take instructions on the contents of the updated costs schedule, and would suffer no prejudice as a result.

The judge then considered the amount of the respondent’s costs.

The applicant objected to the respondent’s hourly rates. The relevant hourly rate for a grade A solicitor practising in Bristol (national band 1 of the costs guideline hourly rates) is £261. However, he charged at the rate of £350 per hour.

Secondly, it was complained that there was no delegation to a less expensive fee-earner for those parts of the work which could properly be done by such a fee-earner. However, no attempt was made to identify work which could have been more properly incurred by a lower level of fee-earner.

The judge decided that both criticisms of the respondent’s costs had some force. The new costs guideline hourly rates came into force in October 2021. He noted that they were merely guidelines, but they represented a recent consensus view of what average work should cost in particular areas of the country.

He did not believe that the work done was above average either in difficulty, or in complexity, or in novelty, or in importance to the client, or in some other way. A figure slightly above the guideline would not be too high but a figure £89 (34%) above the guideline rate was too high.

The judge was also unhappy that everything was done by a single grade A fee-earner. Should there be no one else to delegate to, then the question was whether the costs were reasonably incurred and reasonable in amount. Reasonableness takes account of potential delegation. In the present case, for whatever reason, it seemed that it had simply not been considered. Moreover, it was not for the paying party to have to identify work which could have been done by a more junior fee-earner.

For both these reasons, the judge considered that the quantum of costs claimed by the respondent was too high. A summary assessment of costs is not a “line by line” exercise, but much more “broadbrush”, see for example Football Association Premier League v The Lord Chancellor [2021] EWHC 1001 (QB). The total sought by the respondent was £8,988, including VAT. Looking at the matter in the round, and reducing the solicitors’ costs for both excessive rates and failure to delegate, the judge awarded a total of £7,920, a reduction of around 12%.

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