Are Guideline rates really a valid starting point? Defendant’s appeal, failure and dismissal.

In Harlow District Council v Powerrapid Ltd (Rev1) [2023], the Defendant was ordered to pay costs following the dismissal of an Application for a compulsory order.

The background of the main action was that the Claimant was the proprietor of a piece of land in Harlow. Harlow Council (Defendant) made a Compulsory Purchase Order in respect of the land. The Claimant then successfully resisted the Order and sought their costs. The Defendant appealed against the Judgments made in the preliminary action. Today, we are looking at the hourly rates aspect of this case.

In relation to the appeal regarding the hourly rates of the planning and litigation team, initially the Costs Judge had allowed rates that were 8% – 41% higher than the “London 2” rates. It was argued by the Defendant that the rates were too high for a case of such nature.

The Defendant argued that, firstly, the Judge was wrong to conclude that the matter was “neither simple nor straightforward” and that it required “skill, effort and responsibility”. Secondly, that the Judge erred in concluding that the guide was not a useful starting point or that it was useful only to a very limited extent.

The Judge held that although the 2021 guideline rates had only been applied for a very short period, they were simply just a guideline. He stated that he would be unable to accept that it would be inappropriate to uplift them in an appropriate case, purely because they were new. The Judge also stated that it was to a very limited extent that the guideline rates were a useful starting point, on a case of this nature. In fact, the Judge confirmed that the case did in fact require specialist skills and that he was not surprised that this case in particular was being undertaken by Solicitors in Central London. The Judge confirmed that whilst the matter may not have been “massively heavyweight litigation”, it was “certainly not routine” and a “very specific sort of work” which was “quite difficult and specialised”.

The Judge was not conducting a summary assessment and was not required to take the same approach to the Guide as he might have done had that been the case.

The Judge confirmed that for all of his reasoning, the challenge regarding the hourly rates awarded regarding the “Planning Team” failed.

Regarding the Litigation Team, the Judge confirmed that they “were doing more than getting an Order rubber stamped”. Although the Judge did sympathize that the work undertaken by the Litigation Team did not appear as difficult or taxing, he stated that the general position was that rates were assessed for a firm and not reassessed for different states of Litigation. The Judge also stated that there was no expectation that a litigant should change firms in order to use a “cheaper” or “smaller” firm.

For those reasons, there was no error of principle or law on the part of the Judge. The appeal and submissions were deemed as failed and the case was dismissed.

This case is a gentle reminder that guideline hourly rates, no matter how “new they may be”, are not always grounds for a starting point in negotiations. Much more consideration is needed regarding the complexity of the matter and the specific skills and knowledge required by the conducting Solicitor, on a case by case basis.

For further information on this case, or any other costs matters, please do not hesitate to contact the writer, Caroline Flight, here.