Law Report: Solicitors' rates survey relevant on taxation of costs: KPMG Peat Marwick McLintock v The HLT Group Ltd - Queen's Bench Division (Mr Justice Auld, sitting with Chief Taxing Master Hurst and Mr T Girling as assessors), 14 March 1994

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The survey of solicitors' expense rates published by the London Solicitors Litigation Association in 1992 is a valuable source of information about current levels of costs of solicitors in the City of London and in Westminster and Holborn and is a factor to be taken into account by taxing officers when fixing hourly rates for solicitors on taxation of costs.

Mr Justice Auld allowed the plaintiff's application under RSC Order 62, rule 35(1) for a review of Taxing Master Ellis's decision on a review of taxation of the plaintiff's costs against the defendant.

In 1991, the plaintiff instructed Travers Smith Braithwaite to recover unpaid fees from the defendant who alleged that the plaintiff had been negligent. The plaintiff obtained summary judgment and was awarded costs. Travers Smith Braithwaite, on the taxation of their bill for costs, claimed pounds 140 per hour for a partner and pounds 80 per hour for an assistant solicitor. A taxing officer allowed pounds 100 per hour and pounds 75 per hour respectively.

On a review before Master Ellis, the plaintiff relied on a survey by the London Solicitors Litigation Assocation of solicitors' rates, showing that in 1991 and 1992 the broad average costs for a partner and assistant solicitor in the City of London were pounds 171.26 and pounds 109.43 and the figures for the City of Westminster and Holborn were pounds 108 and pounds 75.39.

Master Ellis allowed pounds 90 for the partner and pounds 70 for the assistant solicitor, saying the survey's figures were untested in taxation and substantially higher than previously allowed on taxation and the plaintiff could have instructed solicitors outside the City of London. He applied an uplift of 70 per cent producing hourly rates of pounds 153 and pounds 119.

Simon Browne (Travers Smith Braithwaite) for the plaintiff; Gregory Chambers (Park Nelson Thompson Quarrell) for the defendant.

MR JUSTICE AULD, giving the court's judgment, said that it was reasonable for the plaintiff, when meeting allegations of professional negligence, to instruct Travers Smith Braithwaite in the litigation and the firm's costs on taxation should be taxed by reference to the broad average costs for such a firm in that area. The fact that the plaintiff could have obtained the same services at a much lower price elsewhere was irrelevant.

If the figures in the survey continued to be disregarded, then the process of taxation might set or freeze so-called reasonable levels of costs which bore no relation to the general levels of costs actually incurred.

The survey was devised to assist in the assessment of broad average direct costs in the area and period in which the work in this case was done. It took no account of any perks or element of profit. It was a valuable aid and an important factor to take into account. It was a warning to taxing officers from a significant proportion of solicitors practising in the central London area that their taxing norms might be out of date.

In fact the plaintiff claimed substantially less than the average City of London rates in the survey. Having regard to the survey and with the benefit of the assessors' advice, the figures for direct hourly costs claimed by the plaintiff were entirely reasonable and should have been allowed on taxation.

The plaintiff claimed a 70 per cent uplift to reflect, principally, the importance of the case and its complexity. Although the plaintiff's own claim was straightforward and relatively modest, the counterclaim alleging professional negligence was of great importance to it. It was not, therefore, a run-of-the-mill case. Despite the inter-relationship between the direct costs figure and the uplift, taxing authorities should not use one as a means of adjusting or correcting the other.

The hourly rates should be pounds 140 and pounds 80 as originally claimed. The uplift of 70 per cent applied by the master should be confirmed, producing respective hourly rates of pounds 232 and pounds 136.