‘No justification at all’ for eye-watering rate, rules Lord Justice Males
A Court of Appeal judge has criticised Cleary Gottlieb Steen & Hamilton for charging “more than double” standard hourly rates.
The firm accepted the sums claimed were in excess of the guideline rates, but told the court “that is almost always the case in competition litigation”.
Lord Justice Males, ruling on the costs of appeal in Samsung Electronics Co. Ltd & Ors v LG Display Co. Ltd & Anor, said this was “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,” said Lord Males. “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.”
Cleary Gottlieb had successfully represented the respondents in the appeal and submitted a schedule claiming costs of £72,818. These included the costs of its solicitors, who bill in US dollars, but the court converted as charges between £801.40 and £1,131.75 for Grade A fee earners and between £443.27 and £704 for Grade C fee earners.
The appellant pointed out these fees were well above, and in some cases more than double, the recommended hourly rates for central London firms working on “very heavy commercial and corporate work”.
The guidance recommends Grade A (solicitors and legal executives with over eight years’ experience) should charge £512 per hour, with Grade C (those with under four years’ experience) set at £270.
Lord Males noted the appeal took place over one day, was not documentation heavy and centred around a “modest” claim of £900,000. He accepted the respondent’s submission that it allocated work to more junior members where possible.
Accordingly, the court cut the respondent’s costs award by almost a quarter to £55,000.
Cleary Gottlieb has been approached for comment.
