Viorel Micula & Ors v Romania

On a detailed assessment of costs, guideline hourly rates are guidance and a possible starting point, not a default entitlement. The appropriate starting point is the governing costs rule and the circumstances of the case, including value, importance, complexity, difficulty, novelty, responsibility and the place where the work was undertaken. In substantial, high-value and internationally complex commercial litigation, rates materially above historical guideline rates may be justified. The costs judge may use guideline rates and historical A and B factors as contextual cross-checks, but must determine reasonable recoverable rates by assessing the particular litigation and the work claimed.

The claimants sought assessment of costs incurred in High Court proceedings arising from a substantial international dispute involving an ICSID award. The issue addressed in this judgment was the appropriate hourly rates for the claimants’ solicitors and for preparation of the bill.

The work had been undertaken between October 2014 and February 2017, when the applicable guideline rates had not been updated since 2010. The defendant proposed rates approximately 10 per cent above the 2010 figures. The court considered the value, importance, international elements, complexity, responsibility and the relevance of guideline rates before setting maximum rates by fee-earner grade.

1. The court assessed hourly rates by reference to Civil Procedure Rules 1998, rules 44.3 and 44.4, considering all the circumstances and, in particular, the specified factors in rule 44.4(3). Conduct and settlement efforts were of little significance in this case.

2. The litigation was of exceptional value and importance. It involved severe economic and political consequences, European Commission intervention, substantial international elements and considerable factual and legal complexity. The solicitors’ skill, effort and responsibility were therefore at the top end of the scale.

3. Guideline hourly rates were of limited assistance. They were guidance and a possible starting point, not rates that were automatically appropriate. The 2010 rates were particularly weak as a starting point because the work pre-dated the 2021 update. Rates substantially above notional historical guideline rates were justified.

4. The judge’s primary approach was to identify a maximum recoverable rate for each fee-earner grade across the bill as a whole, subject to the sums claimed, discounting and exchange-rate issues. Historical guideline rates and the A and B factors were used only as cross-checks.

5. The maximum rates allowed for Shearman & Sterling were £700 per hour for grade A, £500 for grade B, £380 for grade C and £200 for grade D. Crofts’ bill-preparation work was allowed at £200 per hour, because the earlier blended-rate decision concerned a different context and could not govern this assessment.

Not an appeal. The judgment records that the judge had previously assessed costs in related Supreme Court proceedings and was considering a separate High Court bill.