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Competition litigation was considered as “no justification at all” for the high hourly rates being claimed in Samsung Electronics Co. Ltd & Ors v LG Display Co. Ltd & Anor (Costs)  EWCA Civ 466.
The Court of Appeal, during their summary assessment of costs on a standard basis, reduced the Defendant’s claim for costs from £72,818.21 to £55,000.
Hourly rates of between £801.40 and £1,131.75 were being claimed for Grade A fee earners and between £443.27 and £704 for Grade C fee earners. Compare this to the London 1 Guideline Hourly Rates of £512 per hour for Grade A fee earners and £270 for Grade C fee earners, which is a band of rates that has been introduced for very heavy commercial and corporate work, in some instances an uplift to those rates of over 100% was being claimed.
The Defendant attempted to justify the hourly rates claimed stating “that its hourly rates are above the guideline rates, but that is almost always the case in competition litigation”. LJ Males regarded this 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.”
It stands to reason that this introduction of an additional band that applies to very heavy commercial and corporate work still requires a justification when rates above those guidelines are being claimed. This case was absent of any explanation and LJ Males could not see any reason why increased rates were justified, describing the case as 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 judgment fell short of setting out the rates that were considered to be reasonable. Although LJ Males did comment that “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”, hence this comment suggests that enhanced guideline hourly rates were not allowed.
LJ Males had indicated that “the litigation in question qualifies as very heavy commercial work” and therefore it is fair to assume that the very heavy commercial and corporate work guideline hourly rates (Band One) were justified. The suggestion from the judgment is that the Court allowed the guideline hourly rates, however, when comparing the amount allowed of £55,000, with the amount claimed of £72,818.21, we can see that this is a circa 25% reduction. We note that once that 25% reduction is applied to the hourly rates claimed, the rates remain in excess of the Band One rates. However, absent of any detail regarding the disbursements claimed and the disbursements allowed, the hourly rates allowed remain unknown.
Despite the Court of Appeal concluding that this a routine commercial case, it was accepted that this case did qualify for the highest Band for rates, which was the Band One hourly rates.
This case emphasises the need for receiving parties to justify any claim for rates that exceed the Guideline Hourly Rates. It is also essential that submissions are in place to support a claim for Band One rates, if applicable.
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Published 14 April 2022
Author – Sue Fox
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