Higher rates must be justified
This case emphasises the importance of being prepared to justify claims for hourly rates in excess of the SCCO guidelines. Samsung Electronics Co. Ltd & Ors v LG Display Co. Ltd & Anor (Costs) [2022] EWCA Civ 466.
This was a summary assessment by the Court of Appeal appeal costs in a commercial case. LG were the successful Respondent and submitted a schedule claiming costs of £72,818.21. The hourly rates claimed were well above the guideline rates (“GHR”) – equivalent to between £801.40-£1,131.75 for Grade A and between £443.27-£704 for Grade C, as against London 1 GHR of £512 (A) and £270 (C) (London 1 being the guideline rates band applicable to very heavy commercial and corporate work).
LG did not attempt to justify the claim for rates substantially in excess of the GHR, other than to say that “its hourly rates are above the guideline rates, but that is almost always the case in competition litigation”. Males LJ “[regarded] that as no justification at all” and stressed that where a rate in excess of the guideline is claimed, “a clear and compelling justification must be provided.” The Court found there were no factors in this appeal to justify exceeding the guidelines and LG’s costs were reduced accordingly to £55,000.
This case emphasises the need for receiving parties to robustly justify any claim for hourly rates above GHR, even where such rates are charged as normal practice.
In a detailed assessment context this means making the necessary points in the bill narrative and replies, by reference to the factors outlined in CPR r44.4(3). For summary assessment, Form N260 does not allow space for such information to be included. It may therefore be appropriate for Counsel to be briefed specifically on the point, assuming no costs representative will be present at the assessment.
At PIC we are adept at identifying relevant factors in a case and formulating arguments in support of the hourly rates claimed. We will be pleased to provide assistance in this respect, whether in the context of summary or detailed assessment. We can also advise on likely recoverable rates in a given case or area of practice.
Daniel Goddard – Head Of Legal Costs Training
21.04.22