Are your enhanced hourly rates justified?
This article is to highlight issues raised in Manek & Ors v 360 One WAM Ltd & Ors [2023] EWHC 985 (Comm) in claiming hourly rates significantly above guideline rates and the position judges may take in establishing what is complex to justify such enhancements.
In this case, Simon Rainey KC (sitting as a Judge of the High Court) declined to award rates that exceeded the Guideline Rates.
The Court had earlier dismissed the Defendants’ application to set aside an order granting permission to serve outside of the jurisdiction. The Defendants were ordered to pay the Claimants’ costs and the Defendants made various submissions in relation to the amount claimed.
The justification put forward by the Claimants was that the case was complex, and that the litigation was substantial, of high value and that the overall level of costs shows that the Claimants conducted the litigation economically and efficiently in terms of partner time when compared with the Defendants.
THE JUDGMENT ON COSTS
The Court rejected all of the Defendants’ objections to the Claimants’ costs save for the hourly rates. The rates allowed were reduced to the Guideline Rates. The Court held that the Claimants’ points of complexity and substantial level of litigation to support the enhanced rates, only provided justification for the number of hours claimed but did not provide sufficient justification for claiming rates in excess of Guideline Rates. The Judge stated, “The Court of Appeal has stressed in a number of recent decisions that, in the case of solicitors’ fees, 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”.
The High Court has refused to allow costs claimed at double the Guideline Hourly Rates as the receiving party did not show they were justified.
It is the latest decision since the comments of Lord Justice Males last year in Samsung that parties seeking hourly rates in excess of the Guideline Hourly Rates must provide “a clear and compelling justification”.
The question this raises is what is a clear and compelling justification?
How can PIC help?
At PIC, we can help identify whether a case has a clear and compelling justification and put your best case forward to maximise your recovery.
Callum Maw, Legal Costs Consultant
17.08.2023