Various Claimants v MGN Ltd
| Jurisdiction | England & Wales |
| Judge | Master Gordon-Saker |
| Judgment Date | 09 November 2016 |
| Neutral Citation | [2016] EWHC B29 (Costs) |
| Court | Senior Court Costs Office |
| Docket Number | Case No: AGS/1600058 |
| Date | 09 November 2016 |
[2016] EWHC B29 (Costs)
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
Royal Courts of Justice, Strand
London, WC2A 2LL
Master Gordon-Saker
Case No: AGS/1600058
Mr Simon Browne QC and Mr Jeremy Reed (instructed by Atkins Thomson) for the Claimants
Mr Jamie Carpenter (instructed by RPC) for the Defendant
Hearing dates: 21 & 22 September 2016
Judgment Approved
This judgment sets out the reasons for my decisions on the following issues:
i) Hourly rates
ii) Success fees
iii) ATE premiums
iv) The applications for relief from sanctions by Mr Yentob and Mrs Horlick.
The hearing which commenced on 21 st September 2016 was listed for the determination of preliminary issues (hourly rates, success fees, ATE premiums and proportionality) on the detailed assessment of the Wave 1 Representative Claims and the Wave 1 Settled Claims and for the detailed assessment of the Wave 1 Common Costs bill. In the event, shortly before the hearing, the parties agreed the base costs of the Wave 1 Common Costs bill in the sum of £2,034,603 (as against the sum of £2,944,269 claimed) and the base costs of Ms Gulati, Mr Flitcroft, Ms Gibson and Mr Eriksson have also been agreed. What was left to be decided were the hourly rates for the remaining Wave 1 individual claims, the success fees for all of the Wave 1 individual claims and the ATE premiums for the Wave 1 individual claims. In addition Mr Yentob and Mrs Horlick applied for relief from sanctions in respect of their delay in serving notice of funding.
Phone hacking
It is likely that any reader of this judgment will have a good understanding of the phone hacking litigation and I need not summarise it here. The background is well summarised in the judgment of Mann J following the trial of the Wave 1 claims: Gulati & others v MGN Limited [2015] EWHC 1482 (Ch), published at:
http://www.bailii.org/ew/cases/EWHC/ Ch/2015/1482.html
Hourly rates
Counsel's submissions on hourly rates followed their submissions on success fees and were relatively short. Both parties approached this issue broadly by reference to grades of fee earners, rather than by reference to individual firms or individual fee-earners, save in relation to Mr Heath of Atkins Thomson (and formerly of Taylor Hampton). I heard submissions on the appropriate rate for Mr Heath at the hearing on 4 th October 2016 and gave the reasons for my decision orally.
CPR 44.4 provides that in deciding whether costs are reasonable in amount the court will have regard to all the circumstances including (a) the conduct of the parties (b) the amount of any money involved (c) the importance of the matter to the parties (d) the complexity of the matter (e) the skill, effort, specialised knowledge and responsibility involved (f) the time spent (g) the place where the work was done and (h) the last approved or agreed budget.
The firms representing the Claimants were based in Central London, with the exception of Steel & Shamash, who were based near Waterloo, and Stewart- Moore who were based near Olympia. All of the firms specialise in media work. Stewart- Moore, who acted for Mrs Horlick, have for some of the work charged lower rates than the other firms. Steel & Shamash acted for Mr Gascoigne and Mr Yentob.
The Defendant contended that rates representing no more than modest increases on the guideline hourly rates for summary assessment should be allowed. Mr Carpenter, on behalf of the Defendant, pointed to the range of rates charged within firms for different clients and submitted that if a lower rate was reasonable for one client, it would be reasonable for all of that firm's clients in a similar case. He also pointed to the range of rates between the firms; solicitors doing similar work in broadly the same location.
Mr Carpenter submitted that the claims were not complex, either factually or legally; although he conceded that the assessment of damages in these cases involved novelty and created new law. Nor were they of significant value. The damages recovered fell within a range of £15,000 to £260,250. Mr Carpenter also relied on the involvement of counsel as relieving the responsibility assumed by the solicitors.
It is not in issue that it was reasonable for the Claimants to instruct the solicitors who were instructed – broadly Central London firms who specialise in media work. Nor is it in issue that this is not a case in which City rates would be justified.
Guideline hourly rates for summary assessment were last published in 2010. They provided a range of figures from £126 for a Grade D fee earner in Central London to £317 for a Grade A fee earner. The guideline rates are of course just that: broad approximations of what one might expect to see for "normal" work done by firms in the relevant geographical location.
I have no hesitation in concluding that, in the present case, rates higher than the guideline rates were reasonable. The passages in the judgments of Mann J following trial and Arden LJ on appeal relied on by Mr Browne QC, on behalf of the Claimants, are apt descriptions of the seriousness of these cases.
All this means that Mr Yentob's phone was hacked at least twice a day, and often several times a day, for a substantial part of a period of about 7 years, though perhaps for not the whole of that 7 years. I expect the intensity rose as more and more people got used to the technique and its usefulness. All aspects of his personal and business life were exposed because of the nature of his use of voicemail. This is an enormous intrusion. In those terms this is a serious case. To this one adds the possibility of "farming" his other contacts, the extent of which it is impossible to determine.
— per Mann J [2015] EWHC 1482 (Ch) para 243
Indeed, so far as I can see, there were no mitigating circumstances at all. The employees of MGN instead repeatedly engaged in disgraceful actions and ransacked the respondents' voicemail to produce in many cases demeaning articles about wholly innocent members of the public in order to create stories for MGN's newspapers. They appear to have been totally uncaring about the real distress and damage to relationships caused by their callous actions. There are numerous examples in the articles of the disclosure of private medical information, attendance at rehabilitation clinics, domestic violence, emotional calls to partners, details of plans for meeting friends and partners, finances and details of confidential employment negotiations, which the judge found could not have been made if the information had not been obtained by hacking or some other wrongful means. The disclosures were strikingly distressing to the respondents involved.
— per Arden LJ [2015] EWCA Civ 1291 para 106
While the damages awarded or agreed were not at the top end for civil litigation, they were substantial and, in many cases, significantly more than the previous highest award in a privacy case. I also accept that these claims involved some complexity, not only in relation to quantum but also in relation to liability. Until liability was admitted, the Claimants faced the difficulty of proving the wrongs committed by the Defendant's employees with no clear evidence of precisely what had been done and when. The primary burden of the legal argument may lie with counsel, but the solicitors also have a role in analysing the evidence and formulating and communicating the case. I accept also that these claims required specialist skill, not only because of the nature of the case but also because of the nature of the opponent. The Defendant did not admit liability until late in the day and the claims were opposed, both on liability and quantum, with considerable force by a well-resourced party.
But to my mind the overwhelming factor in this case was the importance of this matter to the Claimants. For that, I need only refer back to the comments of Arden LJ.
It seems to me that some of the rates claimed are nevertheless too high. Taking into account all of the circumstances and based on my experience of comparable (though not similar) cases, in my judgment a reasonable rate for a Grade A fee earner undertaking this work would be £400. For a Grade B fee earner, £280 would be reasonable; £230 would be reasonable for a Grade C fee earner and £140 would be reasonable for the Grade D fee earners. They are the rates that I allow, save in the few instances where a lower rate has been claimed.
Success fees
Again the parties have adopted a broad brush approach. That was, if I may say so, very sensible as about 60 success fees fell to be assessed. Only one success fee was the subject of separate submissions: that of Taylor Hampton in the case of Miss Gibson. In relation to that, I preferred the submissions of the Defendant and allowed 50 per cent. I also heard argument as to whether success fees on work done before the conditional fee agreements were entered into should be recoverable.
In respect of the success fee percentages, the Defendant adopted what was described as an "algorithmic" approach. As illustrated in appendix 1A to Mr Carpenter's skeleton argument, the Defendant argued that the prospects of success fell into 4 bands. The bands reflected what the Defendant suggested were significant developments into the investigation of phone hacking.
For the first 4 cases (Ms Gulati, Mr Flitcroft, Ms Gibson and Mr Eriksson) the Defendant submitted that Taylor Hampton should have assessed the prospects of success at 65 per cent when they entered into their conditional fee agreements between August 2011 and August 2012. In respect of the conditional fee agreements entered into between March 2013 and June 2013 the prospects of success should have been assessed at 70 per cent. From September...
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