Hourly Rate for a Solicitor deemed Excessive by Court



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Samsung Electronics & Co. Ltd & Ors v LG Display Co. Ltd & Anor  


Cleary Gottlieb Steen & Hamilton LLP represented the respondent in the case of Samsung Electronics & Co. Ltd & Ors v LG Display Co. Ltd & Anor. Upon the case’s conclusion, the firm stated that they had incurred £73,000 in costs. They were seeking to recover this from the opposing party. This figure equated to more than £1,100 per hour for their top fee earner. The successful party attempted to defend their high level of costs by arguing that these fees were typical for the hourly rate of a solicitor in “competition litigation” cases.

It was not only the top fee earners who were seeking excessive hourly rates as the Grade C fee earners were attempting to recover a figure of between $578 and $918 per hour.

The current guideline rates for Grade C fee earners in centrally-based London firms is £270 ($351.82) per hour. Thus, some of the rates being recorded by the Grade C fee earners at Cleary Gotlieb Steen & Hamilton LLP was well over double this guideline figure.

Lord Justice Males handed down the main judgement in the matter. He stated that, although he agreed that the fee for competition litigation costs are sometimes above the guideline rate, the hourly rate for a solicitor in centrally based London firms takes the ‘”very heavy commercial and corporate work”’ into account.  

He went on to explain that the party had not attempted to properly defend their incurred costs. Instead, they have simply stated that this fee is typical of this area of the law. 

In paragraph 6, Lord Justice Males highlighted his disagreement with the party’s failure to defend their costs as he stated that “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. It is not enough to say that the case is a commercial case, or a competition case.” 

To conclude, Males LJ accepted that the firm’s submission that they used junior members of staff when they could. Nevertheless, he reduced their recoverable costs to £55,000, via summary assessment of costs. This was a unanimous decision with the other present judges.


Guideline Hourly Rate for a Solicitor or Fee Earner Explained


New rates were introduced in October 2021. They were authorised and regulated by the Master of the Rolls. This periodic increase reflects the inflation rates and the modern economic climate.  

Prior to the release of the increased rates, the Civil Justice Council conducted a consultation and prepared a paper, which recommended an increase in solicitors hourly rates. The CJC working group highlighted that the guideline hourly rates were last updated in 2010. So, after eleven years it is likely that an increase was required. The report considered the “basic assessment of costs” as a “starting point”. Then, the document detailed recommended changes to London Area 1 and Area 2. It also recommended new figures for the guideline hourly rates. These rates were adopted and utilized for the new guideline figures.

Now, a Grade A solicitor in London 1 has a guideline of £512 per hour. Alternatively, a Grade A solicitor in the National Band 2 has a guideline figure of £255 per hour. The figures are divided into location bands to account for the differences in living costs across the country. Within London, 3 bands exist. London 1 reflects “very heavy commercial and corporate work by centrally based London firms” and is not restricted to a postcode. However, the other two bands for London are restricted by postcode or borough. The lists which govern whether cities and counties are National Band 1 or 2 can be found on the gov.uk website.


How can ARC Costs Assist?


The team at ARC Costs consists of knowledgeable Costs Lawyers and Costs Draftsman. We can provide a variety of services including production of Bills of Costs and Costs Budgets, alongside advocating for our clients in court. We assist in all areas of law, including personal injury, housing disrepair, judicial review and Court of Protection.

When preparing comprehensive Bills of Costs, we itemise all of the work conducted by a fee earner. In accordance with the current guideline hourly rates, we will calculate your costs incurred. We are extremely diligent when producing costing instruments and we draft precisely. We do this because excessive and disproportionate Bills of Costs can lead to reductions in recoverable costs, as demonstrated in the above case.

If you would like to find out more about how we can help you, please contact us at info@arccosts.co.uk or 01204 397302




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