A High Court judge has said updated guideline hourly rates would be ‘very welcome’ after allowing costs far in excess of the supposedly prescribed amount.
Mrs Justice O’Farrell allowed the successful defendant solicitors in Ohpen Operations UK Ltd v Invesco Fund Managers Ltd to recover up to £46,000 in costs. The figure included grade C fee earners claiming around £436 an hour and grade B fee earners claiming £655 (both rates could rise by 20% if the defendant cannot recover the VAT as input tax).
The judge accepted the hourly rates of the defendant’s solicitors were ‘much higher’ than the Senior Courts Costs Office guideline rate. She noted it was ‘unsatisfactory’ that guidelines are based on rates fixed in 2010 and reviewed in 2014, as these were ‘not helpful’ in determining reasonable rates in 2019.
Current guideline rates suggest a fee of £296 for London solicitors in the pay band B, rising to £409 for those in grade A.
‘The guideline rates are significantly lower than the current hourly rates in many London City solicitors, as used by both parties in this case,’ added O’Farrell J.
The costs assessment was made following a judgment handed down in August, which upheld the defendant’s application for the claim to be stayed. The dispute had arisen out of the the development and implementation of a digital online platform for buying and selling investment funds.
The parties agreed that the claimant should pay the defendant’s costs of the application, to be assessed on the standard basis, and that no issue of proportionality arose in this case.
The judge stated that although the value of the case was not particularly high, the technical nature of the dispute justified engaging solicitors with the appropriate expertise – with the costs that might bring.
‘The hourly rates charged cannot be considered in isolation when assessing the reasonableness of the costs incurred; it is but one factor that forms part of the skill, time and effort allocated to the application.’
The judge reduced the defendant’s costs by almost £6,000 as it was deemed some of the time spent in relation to work done on documents was excessive.