A US firm which billed $35 million (£26m) for acting in complex arbitrations failed to keep its billionaire client informed of costs - including two increases in hourly rates - a judge has ruled.
In Safra v Wilmer Cutler Pickering Hale and Dorr, Costs Judge Leonard made an order for assessment of WilmerHale's final bill, stating that he had never seen a case where such a large bill had been backed up with so little information.
According to the judgment, WilmerHale was retained by Alberto Safra to act in a bitter dispute over the estate of his father, Brazilian banker Joseph Safra. The engagement letter quoted hourly fees of up to $1,830. These were increased twice without notice during the retainer, rising to up to $2,095 per hour.
Challenging the bill in the Senior Courts Costs Office, Safra argued that $35 million is an 'unusually large sum to incur over less than two years in even the heaviest of litigation'.
In a 76-page judgment, the judge found that the firm's invoices contained 'charges which are so high as to raise concern as to the costs incurred across the board'. One fee earner, he noted charged for 370.7 hours in January 2024. Meanwhile, 'many of the expenses and disbursements are of a surprising nature,' including subscriptions to the Westlaw legal database and $11,367.54 for a partner's travel expenses from New York to London. This included $41.76 for laundry.
The firm argued that the arbitrations had been complex and their likely course and duration could not be predicted at the time of the letter of engagement.
Making an order for assessment, the judge found the hourly rate and expenses to be 'commensurate with the nature of the case and of the work being undertaken'. However he added: 'My real concern is with the provision to the claimant of financial information'.
Referring to the SRA code of conduct's requirement to provide the 'best possible information', Leonard said: 'I have not previously encountered a case in which such levels of costs accrued with such limited information being provided to the client. However much he would have known about what was being done for him, and however pleased he may have been at the level of service provided, [Safra] was not regularly being kept aware of what it was costing him.
'That would have been unsatisfactory even if the fees finally billed had not been so far in excess of what he had clearly indicated that he could afford.'
WilmerHale has been approached for comment.
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