CCMC’s and Hourly Rates

Ian Moxon ~ Costs Lawyer

Ian Moxon, Costs Lawyer at PIC reviews the case of Saab Seaeye Ltd v Atlas Elektronik GMBH and Others [2018] 4 Costs LO 419

 

The question of whether hourly rates can, and should, be disputed at a costs management conference is not a new topic. CPR 3.15, PD3E 7.3 and 7.10 seem perfectly clear to me – i.e. the Judge at a costs management conference can consider the constituent parts of the Budget, including the hourly rates, but the Court should not be trying to set hourly rates for the case at the costs management conference. Easy.

In the case of Saab Seaeye Ltd v Atlas Elektronik GMBH and Others [2018] 4 Costs LO 419 the Court (Birss J) was urged by the Defendant in that patent litigation to reduce the hourly rates of the Claimant’s Solicitors (including a rate of £550.00 for a Partner). The SCCO Guideline Rates were cited and other submissions made. The Judge concluded (interestingly) that the Claimant was quite entitled to instruct a specialist firm of Solicitors given the importance and apparent high value of the litigation and he would not, therefore, interfere with the rates or reduce the Budget of the Claimant on the basis that the rates were too high (other elements of the Claimant’s Budget were reduced).

At PIC (Partners In Costs) we specialise in dealing with Claimants’ costs following injury claims and, specifically, clinical negligence. At PIC we often see cases where the litigation was either high value, of importance and/ or complex for whatever reasons and where the Claimants did instruct specialist Solicitors. But how much should the hourly rates be for those cases?

I have heard it said too often that all clinical negligence is “complex” (whatever that means) and that hourly rates for clinical negligence work should automatically he higher than for other types of litigation. I do not support that notion and equally I deplore the practice at too many firms of setting high fee targets for their fee earners, who are then under undue pressure to overcharge at every opportunity. It is also no longer sensible for Claimant firms to put very high hourly rates into their CFAlite style retainers, but that is another story.

A long time ago at a detailed assessment hearing (taxation of costs) District Judge Stocken at Doncaster explained that she was quite happy to allow hourly rates far above the then going rate, but she would be looking for a corresponding degree of efficiency by the conducting Solicitor. Nothing has changed since then in terms of hourly rate billing.

Any experienced Judge or Costs Lawyer can tell when the overall costs are too high (and inexperienced costs professionals will often suffer embarrassment where they cannot properly judge the extent of the costs being claimed). I, and others like me, can state how much the costs of any particular case above the current fast track limit should be, but costs above the current fast track cannot be fixed, because every case above the current fast track limit is different.

High hourly rates charged by a Solicitor of average efficiency will result in the costs being too high. High hourly rates charged by an efficient Solicitor will result in a reasonable claim for costs. Complexity and/ or importance by themselves do not necessarily justify higher rates because, if the Solicitor is out of their depth, costs will escalate due to their lack of ability in those circumstances. Solicitors who can conduct complex or difficult litigation efficiently are few but deserve to be rewarded.

Where a Solicitor asks Counsel to do the complex or legally challenging work, then it can no longer be said, from the Solicitor’s perspective, that the litigation was complex (because the complex elements were farmed out to Counsel). In those circumstances it is Counsel who deserves the rewards for dong that difficult work, not the Solicitor. If costs have been duplicated by the involvement of Counsel, then the overall costs will be too high and reductions will have to be made.

I know of only a small number of Solicitors, out of hundreds of provincial Solicitors PIC deal with, who can honestly charge over £300.00 per hour for doing clinical negligence work or high value personal injury (there are about four such Solicitors in Doncaster) – and if they charged any less they wouldn’t be earning as much as other average fee earners who charge Guideline Rates or slightly higher (and there is one Solicitor in Doncaster who is truly supreme and could easy charge £400.00 per hour but in fact charges far less). The going rate at Sheffield at the moment for average Grade A Solicitors doing clinical negligence work appears to be £250.00 per hour.

There are some fee earners whose notional grade is grade D or grade C and yet they possess expertise (and, importantly, efficiency) far above their notional grade and who, following our advice, charge (and recover) high rates commensurate with their abilities.

So that is hourly rates, be it at costs management conferences or detailed assessments.

Ian Moxon ~ Costs Lawyer ~ 17 October 2018

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