Ohpen Operations UK Ltd v Invesco Fund Managers Ltd

In a summary assessment of costs, recoverable costs are limited to costs reasonably and proportionately incurred and reasonable and proportionate in amount. The assessment is objective. A party may reasonably instruct specialist solicitors at market rates where the skill and expertise are justified by the nature of the dispute, even if those rates exceed guideline rates. Hourly rates cannot be assessed in isolation; the court must consider them together with the time spent and the work required. A party may choose a premium service, but cannot ordinarily recover from its opponent the full cost of that choice. The court may adjust excessive preparation time and take account of the paying party’s failure to accept a reasonable offer to settle.

The defendant had succeeded on an application to stay the claim pending compliance with the parties’ agreed dispute resolution procedure. The court directed that the incidence, basis and assessment of the application costs be determined on paper.

The parties agreed that the claimant should pay the defendant’s costs, summarily assessed on the standard basis. The issue was the amount recoverable, including whether the defendant’s solicitors’ hourly rates and time spent on document preparation were reasonable and proportionate.

1. The claimant was liable for the defendant’s costs of the stay application. The costs were to be summarily assessed on the standard basis under the Civil Procedure Rules 1998.
2. Under CPR 44.3, the court allowed only costs reasonably incurred, reasonable in amount and proportionate to the matters in issue, resolving doubts in favour of the paying party. The assessment required an objective evaluation of all relevant circumstances, including the conduct of the parties, the value and importance of the case, its complexity, and the skill, time and effort involved.
3. The court endorsed the approach in Kazakhstan Kagazy plc v Zhunus [2015] EWHC 404 (Comm): the touchstone was the lowest amount that could reasonably have been expected to achieve proficient conduct and presentation of the case. The court also adopted the principle stated in Re RBS Rights Issue Litigation [2017] EWHC 1217 (Ch.D.) that a litigant may pay for a premium service but cannot charge the whole cost to the other side.
4. Although the solicitors’ hourly rates exceeded the Senior Courts Costs Office guideline rates, the technical nature of the dispute justified specialist legal expertise. Rates were one factor in assessing overall reasonableness and could not be considered separately from the time spent. The grade A and grade D costs were reasonable.
5. The time spent by the grade B and grade C fee earners on document preparation was excessive. The additional burden on the defendant as applicant did not justify nearly twice the claimant’s preparation time. The court deducted £5,807.90.
6. The resulting costs were assessed at £46,000, including irrecoverable VAT and an increase reflecting the claimant’s failure to accept the defendant’s offer which would have avoided the hearing. Payment was ordered by 1 October 2019.