Samsung Electronics Co Ltd and Others v LG Display Co Ltd & Anor : Facts of the Matter

The dispute had been finalised between the parties and costs had been submitted for recovery. As LG were the successful respondent, Samsung were liable to pay their costs. Though, when the respondent submitted their costs, the total amounted to £72,818.21. It was highlighted that the solicitors for the respondent had utilized rates well above the guideline figures.

The hourly rate that they had applied for Grade A Fee Earners was between $1,045 and $1,475.75. In pounds, this is between £801.40 and £1,131.75 per hour. As noted in the judgment, these figures were “well above the guideline hourly rates set out in Appendix 2 to the ‘Summary Assessment of Costs’ guide published in the White Book.”

Generally, the type of work cannot excuse high costs as the guideline rates for Grade A solicitors in London 1 considers the “very heavy commercial and corporate work by centrally based London firms.” The paying party disputed these costs, and a short hearing was held to provide summary assessment of the costs.

Question to be considered by the Costs Judges

Can the respondent recover this amount in costs?

It is highlighted in paragraph 29 of the Summary Assessment of Costs’ 2021 guide that in “substantial and complex litigation, an hourly rate in excess of the guideline figures may be appropriate for grade A, B and C fee earners where other factors, for example the value of the litigation, the level of the complexity, the urgency or importance of the matter, as well as any international element, would justify a significantly higher rate.” Emphasis should be placed on the word ‘justify’.

In the judgement, Lord Justice Males highlighted how the respondent had made no effort to justify their extensive costs and had instead stated that these costs were typical in competition litigation. This did not satisfy the judge.

The Court’s Decision

Although Lord Justice Males accepted that LG had used junior members of the team, when possible, he reduced their recoverable costs from £72,818.21 to £55,000. This decision reflected the lack of justification for the costs, as the Costs Judge noted in paragraph 7 that it “was a one-day appeal…the documentation was not heavy.”

Solicitors Hourly Rates Explained

The Guideline Hourly Rates (GHR) are figures which set out a recommended rate for solicitors and other fee earners from different areas with varying experience. For example, there are graded recommendations for London 1 and London 2. London 1 is not restricted to a postcode and instead applies to “very heavy commercial and corporate work by centrally based London firms”. Though, London 2 is restricted to post codes. There is a further London category called London 3. For national guideline hourly rates, the categories of National 1 and National 2 exist. The full details of the rates can be found on the government website.

Solicitors hourly rates should be implemented for summary assessment of costs as well as detailed assessment of costs.

As mentioned above, fee earners can occasionally exceed these rates. Though, a comprehensive justification would be required. It is likely that the figures would be exceeded in complex commercial cases. However, it is not exclusive to this type of work. Paragraph 29 of the Guide to the Summary Assessment of Costs noted that the figures could be exceeded in “large and complex personal injury work”.

Recently, in October 2021, the guideline hourly rates were reformed. The new figures were authorised and regulated by the Master of the Rolls, Sir Geoffrey Vos. Although, the recommendations originated from a paper devised by the Civil Justice Council (CJC).

As the previous rates had been in place for over ten years, and inflation and the cost of living had soared in the meantime, it was time for reform. The Civil Justice Council put together a CJC working group to consider all of the factors relating to guideline figures. Their recommendations included amendments to the London Area 1 and Area 2. Furthermore, the working group highlighted that new figures were necessary for the guideline hourly rates. These were the rates authorised and regulated in October 2021.

How can ARC Costs Assist?

As an experienced team of Costs Lawyers and Costs Draftsmen, we can provide an extensive range of legal costs services.

From the production of costing instruments, such as Bills of Costs or Costs Budgets, to advocating for our clients in court, our team can be relied upon to consistently provide an outstanding service.

To find out more about how we can help you and to receive a free quote, please use our chat facility or contact us on 01204 397302 or info@arccosts.co.uk. 

Request Your Free Quotation