Court of Appeal Upholds Retrospective Conditional Fee Agreement
A recent costs judgment in the case of ๐๐ช๐ค๐ถ๐ญ๐ข ๐ท ๐๐ฐ๐ฎ๐ข๐ฏ๐ช๐ข [2024] ๐๐๐๐ 3566 (๐๐๐๐), has established a precedent by allowing the largest ever departure from guideline hourly rates (GHR) in commercial litigation.
Costs Judge Leonard approved rates of ยฃ700 per hour for grade A fee earners, ยฃ500 for grade B, ยฃ380 for grade C, and ยฃ200 for grade D. The judge firmly rejected arguments that standard rates should apply, dismissing the traditional distinction between barristers and solicitors in major litigation. He stated, “solicitors bore just as much responsibility as counsel for the outcome” and had “the same duty to understand and address the issues, both factual and legal.”
The case stems from a 2013 arbitration award by the International Centre for Settlement of Investment Disputes, concerning investments in food production in Romania prior to its EU accession. With a dispute value of ยฃ182m, it raised significant issues around conflicts between European competition law and bilateral investment treaties, eventually reaching the UK Supreme Court in 2020.
The paying party had argued for rates at just 10% above the 2010 Guideline rates. However, Judge Leonard concluded this case was “at the top end of the scale, even for City of London commercial litigation” and that guideline rates were “becoming quite obviously of less and less value as a starting point.”
This ruling sets valuable precedent for firms handling sophisticated disputes and acknowledges that high-stakes cases require premium expertise. It confirms that GHR are “necessarily of limited assistance” in such matters, with Civil Procedure Rule 44.3 (assessment of costs on the standard basis) providing a more appropriate starting point.
This decision provides important leverage when justifying premium rates that reflect the true value and responsibility involved in high-value international disputes.
