Maggie Otto & Ors v Inner Mongolia Happy Lamb & Ors

Guideline hourly rates are not automatically increased by general inflation or by the growth of remote working. A party seeking rates above the applicable guideline rates must provide a clear and compelling justification. The court should not create revised guideline rates through individual costs assessments. Geographical location remains relevant where a solicitors’ firm has a physical base and no evidence establishes a different costs structure. Summary assessment is a broad-brush exercise, allowing the court to assess reasonableness and proportionality without undertaking a line-by-line audit.

The petitioners had withdrawn an interim injunction application before the second listed hearing. The court had previously ordered the represented respondents to pay the costs of that application and directed written submissions on assessment. The petitioners claimed £23,244.20, including VAT, for two hearings. The issues were the appropriate hourly rates, the reasonableness and proportionality of particular items, and the time allowed for payment.

1. The court summarily assessed the petitioners’ costs at £20,795, including VAT and court fees, payable within 14 days.

2. Rates above the guideline rates require a clear and compelling justification, as stated in Samsung Electronics Co Ltd v LG Display Co Ltd [2022] EWCA Civ 466 and reiterated in Athena Capital Services SICAV v Secretariat of State for the Holy See [2022] EWCA Civ 1061. The respondents’ solicitor’s higher rate was irrelevant because the court was assessing the petitioners’ costs.

3. General inflation did not justify increasing the guideline rates mathematically. The court was not entitled to create a new guideline rate, and revising guidelines was a matter for the appropriate guideline-making process.

4. Remote working did not establish that geographical location was irrelevant or justify higher rates. The petitioners’ solicitors had a Bristol base, with associated overheads, and no evidence showed a different costs structure. The court therefore allowed only the guideline rates.

5. The court accepted most challenged items as reasonable and proportionate. Summary assessment is a broad-brush, rather than line-by-line, procedure. The usual 14-day period for payment was retained.