Athena Capital Fund Sicav-Fis S.C.A. & Ors. v Secretariat of State for the Holy See

On a standard-basis assessment, a party seeking solicitors’ fees above the applicable Guideline Hourly Rates must provide a clear and compelling justification. The current London 1 band expressly covers very heavy commercial and corporate work undertaken by central London firms.

Counsel’s fees have no equivalent guideline rates, but recovery remains limited to reasonable and proportionate amounts. The paying party’s own disproportionate expenditure does not justify excessive recovery. The court must scrutinise costs schedules and keep recovery within reasonable bounds.

The Court of Appeal allowed the claimants’ appeal from Simon Salzedo QC, sitting as a Deputy High Court Judge, who had imposed a case management stay in [2021] EWHC 3166 (Comm). The successful appellants were awarded their appeal costs on the standard basis.

The parties’ stated appeal costs exceeded £730,000 for a hearing completed in one day. The appellants sought a payment on account. The court had to determine an appropriate sum, having regard to solicitors’ rates substantially above the Guideline Hourly Rates and exceptionally high counsel’s fees.

1. Appeal and costs. The appeal was allowed. Although only one of six grounds proved decisive, no split costs order was appropriate. The appellants were entitled to their appeal costs, assessed on the standard basis.

2. Solicitors’ hourly rates. Where solicitors seek to recover rates exceeding the applicable Guideline Hourly Rates from the paying party, they must provide a clear and compelling justification. None had been advanced. The current London 1 band was expressly designed for very heavy commercial and corporate work undertaken by central London firms and was based on evidence from the Business and Property Courts. It therefore applied directly to this commercial appeal: Samsung Electronics Co Ltd v LG Display Co Ltd [2022] EWCA Civ 466 applied and explained.

3. Counsel’s fees. Counsel’s fees are not governed by guideline rates in the same way as solicitors’ fees. Nevertheless, the amount recoverable from the opposing party is confined to a reasonable and proportionate fee, irrespective of what the client agreed to pay. Fees exceeding £200,000 for the appellants’ leading and junior counsel were well above a reasonable and proportionate level for this one-day appeal concerning the exercise of a case management discretion.

4. Scrutiny of costs. The absence of a challenge by the paying party to hourly rates or counsel’s fees did not remove the court’s responsibility to scrutinise the costs schedules. Nor could disproportionate expenditure by the paying party justify excessive recovery by the receiving party. Standard-basis recovery remained limited to reasonable and proportionate costs.

5. Payment on account. Taking those matters into account, the respondent was ordered to pay £100,000 on account of the appellants’ costs.

1. Court of Appeal (Civil Division): In [2022] EWCA Civ 1061, allowed the appeal against the case management stay, awarded the appellants their costs on the standard basis and ordered a payment on account of £100,000.
2. High Court, Commercial Court: In [2021] EWHC 3166 (Comm), Simon Salzedo QC, sitting as a Deputy High Court Judge, imposed a case management stay.