HT-2023-000349 - [2024] EWHC 1159 (TCC)

FK seeks its costs of the Part 8 proceedings and ISG does not oppose that. Both parties are content with a summary assessment and I consider this to be appropriate: see CPR 44 PD 9.2(b). At the hearing, FK lodged a total bill for £191,506.30 of which £69,381.90 was solicitors’ costs and £121,759 was the cost of leading and junior counsel (of which £85,000 was for the hearing). FK has now lodged an increased bill taking account of costs incurred up to and including addressing these consequential matters. The total now is £213,142.65 which includes an additional £12,149 for counsel and £9,487.35 for solicitors’ time.

ISG’s total bill up to and including the hearing is for £115,001.70 of which £50,950 is solicitors’ costs and £62,233 is the cost of leading and junior counsel (of which £53,000 was for the hearing).

FK has volunteered that a reasonable figure for the summary assessment of its own costs would be £149,199.86, being 70% of its total costs.

When assessing costs summarily I bear in mind in particular CPR 44.3(5) and 44.4(1)(a). As Fraser J (as he then was) observed in RG Securities (No 2) Limited v Allianz Global Corporate and Speciality CE [2020] EWHC 2047 (TCC):

“A figure awarded by way of summary assessment is simply that - a summary assessment. It is not an item by item detailed assessment, and this ruling should not be taken as constituting one. The figure awarded by the court is not intended to be a full indemnity to the party receiving its costs, and some deduction from the overall total is justified. Costs have to be proportionate and reasonably incurred, and proportionate and reasonable in amount, as this is a requirement under CPR Part 44.4(1)(a).”

I note the following features of this case. I understand that the prolongation costs were valued at £4,687,815, so this appears to be the value of the underlying dispute. It is part of a much larger dispute between the parties. The Part 8 claim led to a one-day hearing. It was a case of some factual and technical complexity which led to a reserved judgment. There were two trial bundles, but much of the material was not referred to. A large number of cases were cited, but most were not referred to. Whilst costs assessment is not a comparative exercise, I note that ISG’s schedule amounts to about 60% of FK’s original schedule.

ISG submits that FK’s costs are much too high. FK submits that its figures are reasonable and proportionate but – as I have indicated - has offered to accept 70% of the overall total. ISG proposes that FK’s costs should be summarily assessed at £85,000.

ISG criticises FHK’s hourly rates, but I note FK’s analysis showing that the rates overall are comparable.

FK say that, although ISG was the Claimant, FK bore the burden of establishing that the case was in fact more complicated than ISG’s “overly simple” approach suggested. I accept that FK had to do more of the “heavy lifting”. I note also that FK had to change leading counsel as their original counsel was not available when ISG pressed for an earlier hearing date.

I recognise that litigation in this field engages lawyers with a high degree of specialist and technical expertise and that is reflected in the fees charged. Nonetheless, I consider FK’s counsel’s fees to be very high. They are almost double ISG’s counsel’s fees, even though the leaders are of comparable seniority.

FK appear to have engaged a team of nine fee earners including two paralegals and two costs advisors. I consider that £45,079 spent on documents (now increased to £50,538) is disproportionate, given the reliance on counsel. Of this, I note that £8,112 was incurred on instructions to counsel, and £11,237 on preparation for the hearing. An additional £3,664 is claimed for strategy for the hearing.

In my judgment FK’s costs overall are too high and are disproportionate. Having regard to the points made above, I consider it reasonable to reduce the solicitors’ time spent on documents to £25,000. This gives a total for solicitors’ costs of £53,331, which I round down to £53,000.

As for counsel’s fees I consider that the close approximation in seniority between the parties’ Leading Counsel provides a good guide to a proportionate level of fees, but I accept that FK had to do much most of the running in this case and that FK had to instruct a new leading counsel. Overall I allow counsel’s fees of £80,000.

Accordingly, I summarily assess FK’s costs at £133,000. A cross-check against ISG’s total of £115,001 confirms that this is a reasonable and proportionate figure.

The parties should agree and lodge an Order giving effect to this judgment within 7 days.