A High Court judge has urged a review of the guideline hourly rates, which were fixed in 2010, saying the current levels are “not helpful in determining reasonable rates in 2019”.

In Ohpen Operations UK Ltd v Invesco Fund Managers Ltd [2019] EWHC 2504 (TCC) Mrs Justice O’Farrell assessed costs of the Defendant’s successful application for a stay pending compliance with an agreed dispute resolution procedure.

The incidence, basis and assessment of costs was determined on paper, each side exchanging short written submissions. There was no dispute as to the applicable principles:

• The Court has discretion as to whether costs are payable by one party to another, and as to their amount: CPR 44.2(1);
• The general rule is that the unsuccessful party will pay the costs of the successful party: CPR 44.2(2); and
• The Court will have regard to all the circumstances, including conduct of the parties and any offers: CPR 44.2(4) & (5).

The parties agreed that the Claimant should pay the Defendant’s costs, summarily assessed on the standard basis. As such:
i. the Court will allow costs which have been reasonably incurred and are reasonable in amount, resolving any doubt in favour of the paying party: CPR 44.3(1) & (2); and
ii. the Court will only allow costs which are proportionate to the matters in issue: CPR 44.3(2).

No issue of proportionality arose.

On the issue of hourly rates, the Judge said “The [SCCO] guideline rates are significantly lower than the current hourly rates in many London City solicitors, as used by both parties in this case. Further, updated guidelines would be very welcome”.

The Judge found that “the technical nature of the dispute justifies the engagement of solicitors with the appropriate skill and expertise to ensure proper and efficient conduct of the litigation” and that “Solicitors providing such skill and expertise are entitled to charge the market hourly rate for their area of practice”.

The Defendant’s costs (of the application for a stay) were £52,152. The Judge assessed costs, on the standard basis, at £46,000. In doing so the Judge noted that Grade A and Grade D time was limited and reasonable (without indicating the respective hourly rates). In reducing Grade B and Grade C time, the Judge indicated that she was allowing hourly rates of £655 and £455 respectively.