Need for specialist IP solicitors meets new “clear and compelling” costs test

Adam Johnson J: Specialist knowledge was needed

A party that needed specialist intellectual property advice was justified in using lawyers who charged significantly above the guideline hourly rates (GHRs), the High Court has decided.

The ruling by Mr Justice Adam Johnson is the first where a judge has found that a rate exceeding the GHR met the “clear and compelling” test set out by the Court of Appeal earlier this year.

In Samsung Electronics Co Ltd & Ors v LG Display Co Ltd & Anor (Costs) [2022] EWCA Civ 466, Lord Justice Males said: “If a rate in excess of the guideline rate is to be charged to the paying party, a clear and compelling justification must be provided.

“It is not enough to say that the case is a commercial case, or a competition case, or that it has an international element, unless there is something about these factors in the case in question which justifies exceeding the guideline rate.”

Rulings since have cited this guidance but Mr Justice Adam Johnson’s appears to be the first where the test was met.

In Lappet Manufacturing Company Ltd & Anor v Rassam & Ors [2022] EWHC 2158 (Ch), the claimants’ solicitors, Nottingham-based Potter Clarkson, charged grade A partners at £462 per hour (in 2021) and £490 (in 2022), compared to a GHR of £261.

They also charged an associate, a grade C fee-earner, at £293 (2021) and £330 (2022), as against the GHR of £178. The defendants said the solicitors should be held to the GHR.

Adam Johnson J said: “In this case, I am satisfied that there is justification for an increase on the Nottingham guideline rates. That arises from the complexity of the issues which arose on the two applications I disposed of.

“Both required specialist knowledge of the procedure applicable to intellectual property claims, and trade mark claims in particular. The intricacies will be readily apparent from my earlier Judgment.

“In my opinion, the claimants were thus fully justified in engaging solicitors with the appropriate specialist knowledge, appropriate to advising on the issues in question and managing the conduct of the defendants’ applications.”

The judge stressed that the justification was put “specifically” on the basis of the specialist procedural knowledge needed in order to act effectively.

“It therefore does not fall foul of the proscription set out by Males LJ in the Samsung case.”

This meant a departure from the GHR was justified on the basis of “the long-established principle that specialist solicitors in specialist areas of activity should recover an uplift to reflect that specialism, where that is justified in the circumstances”.

At the same time, Adam Johnson J found that the rates claimed were “rather high”, when measured against the GHR for Nottingham and also London band 2. He reduced the claimed rates to £350 for grade A and £230 for grade C.

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