CPR 3.15(8) | £870 Hourly Rate And £90,000 Brief Fee For Leading Counsel Deemed Disproportionate In £1.2m Claim

While CPR 3.15(8) prevents courts fixing hourly rates at costs management, excessive rates can render phase totals disproportionate. The High Court ruled a £1.2m professional negligence claim wasn’t ‘very heavy commercial work’ justifying London Band 1 rates. Using Band 2 as the benchmark, the court reduced phase totals where rates hit £870/hour – achieving proportionality without micromanaging specific rates.

PONTIS FINANCE LLP V KARAM, MISSICK & TRAUBE LLP [2025] EWHC 2298 (Ch)

In Pontis Finance LLP v Karam, Missick & Traube LLP, the court addressed costs budgeting for a £1.2m professional negligence claim where solicitors claimed rates up to £870 per hour alongside £90,000 in combined counsel brief fees. The central issue was whether such rates could be justified when the claim didn’t constitute ‘very heavy commercial work’ warranting London Band 1 guidelines. The court found the claim was of moderate complexity, towards the lower end of Chancery Division litigation, and would turn substantially on its facts rather than complex legal issues. London Band 2 was determined to be the appropriate benchmark for assessing proportionality. While CPR 3.15(8) prevents courts from fixing specific hourly rates at costs management, following GS Woodland Court GP1 Ltd v GRCM Ltd, excessive rates combined with hours billed can render phase totals disproportionate. The court made broad-brush reductions to achieve proportionate totals, approving £115,000 for Trial Preparation (reduced from £136,550) and £50,000 for Trial (reduced from £88,700). Administrative delays had prevented budgeting of several phases, including Disclosure, where costs had become incurred rather than future costs.

"Before looking at the individual phases, I assess whether the overall figure for incurred and budgeted costs is proportionate and reasonable. The overall figure for the Claimant is £489,891.31. I consider that that figure is outside the range of what is reasonable and proportionate for the present case which, as I already explained, is a claim for approximately £1.2 million at most and is not especially complex either as to the facts or as to matters of law, albeit that once the facts are found it may well be that there will be scope for some more or less subtle arguments as to how the law should apply to them."

Citations

Yirenkyi v Ministry of Defence [2018] EWHC 3102 (QB); [2018] 5 Costs L.R. 1177 A budgeting court must approve only the total figures for each phase and avoid micromanaging by fixing specific hours or hourly rates, preserving the parties’ flexibility during proceedings. GS Woodland Court GP1 Ltd v GRCM Ltd [2025] EWHC 285 (TCC) Courts may apply a downward adjustment to phase totals to reflect excessive hourly rates, even without fixing individual rates, as cost budgeting must focus on overall reasonable and proportionate totals per phase. Samsung Electronics Co Ltd & Ors v LG Display Co Ltd & Anor (Costs) [2022] EWCA Civ 466 To justify hourly rates above guideline figures, a clear and compelling reason must be provided showing specific case features that warrant such an increase beyond classification as a general commercial or international matter.

Track allocation housing disrepair CPR 46.13 settlement sum costs restriction SCCO

MRO fee markup cap 25% detailed assessment personal injury Senior Courts Costs Office

Security for costs refused CPR 25.27 very high probability success excessive estimate King's Bench

IPEC scale costs transfer Patents Court PD 30 para 9.2 costs caps Court of Appeal

Costs budget variation CPR 3.15A promptness significant development unfair prejudice Chancery Division

Costs budgeting inter partes proportionality high hourly rates AI disclosure Patents Court CPR 3E

Beneficiary personal liability section 71(3) Solicitors Act 1974 indemnity costs VAT self-supply SCCO

Summary assessment indemnity costs unless order payment on account disclosure default Chancery Division

Provisional assessment set aside CPR 3.1(7) points of dispute filing duty PD 47 para 14.3 SCCO

Fixed recoverable costs police claims CPR 26.9(10)(e) intentional tort exemption

Key Points

When assessing whether budgeted costs are proportionate, courts must consider the phase total rather than approving or disapproving specific hourly rates; however, excessive rates may justify a downward adjustment to the total figure if they render it disproportionate when combined with the time claimed. [23–24, 25, 27]
Even where the number of hours is reasonable, costs may be deemed disproportionate if the hourly rates significantly exceed the applicable guideline rates without appropriate justification. [30, 39–41, 55–57]
Costs will not be proportionate simply because the total phase amount results from high hourly rates over a limited number of hours; courts are entitled to assess whether the total figure for a phase, considering both rate and time, falls within a reasonable and proportionate range. [24–25, 41]
In determining proportionality, the court must take into account the complexity and value of the litigation, but litigation that is fact-heavy rather than legally complex will not ordinarily justify exceptionally high hourly rates. [14–15, 22.3, 31, 35]
Costs incurred in litigation by solicitors located based in London 1 categorised as “not very heavy commercial work” should be assessed using London Band 2 guideline rates unless a compelling justification exists for applying the higher Band 1 rates. [35–36]

"I consider that my approach outlined above is consistent with the decision of Constable J in GS Woodland Court GP1 Ltd v GRCM Ltd [2025] EWHC 285 (TCC) which both parties referred me to. In particular para.14 of Constable J's judgment where he said: 'The rates are excessive and, in due course, whilst of course I am not going to say anything specific in terms of what the rates should be or the precise calculation, I will take account of a relatively sizeable downward adjustment in each of the phases where there heavy time costs to reflect the excessive rates.'"

Key Findings In The Case

The judge found the hourly rates charged by the Claimant’s solicitors—particularly £870 for a Grade A fee earner and £400 for a Grade D fee earner—significantly exceeded the London Band 2 guideline rates of £413 and £153 respectively and were unjustified given the nature and complexity of the case, warranting a downward adjustment in the budgets for relevant phases [36, 39–41].
The claim was categorised as litigation that, while involving some factual and legal issues, was not “very heavy commercial work” and therefore did not justify London Band 1 hourly rates; London Band 2 guideline rates were ruled applicable for assessing proportionality of solicitor costs [22.1–22.4, 35–36].
Even though the hours claimed for several phases were considered reasonable, the total solicitors’ fees became disproportionate due to the combination of those hours with unjustifiably high hourly rates, necessitating reductions in the costs budgets for the Trial Preparation and Trial phases [30, 39–41, 55–57].
The judge reduced the Claimant’s Trial Preparation phase costs from £136,550.00 to £115,000 and its Trial phase costs from £88,700.00 to £50,000, in both instances citing excessive hourly rates as contributing to figures outside the range of what was reasonable and proportionate [48, 60].
The overall costs figure of £489,891.31, inclusive of incurred and budgeted costs, was found to be outside the bounds of proportionality, driven in part by high hourly rates that were not justified by the claim’s factual or legal complexity or its monetary value, which was assessed at between £800,000 and £1.2 million [15, 31–32].

"The overall figure sought by the Claimant for the Trial Preparation phase is £136,550.00. I have concluded that part of that figure consists of excessive solicitors' fees. In line with the approach of Constable J in the GS Woodland case I consider that I should make a downward adjustment to the Claimant's phase figure to reflect the excessive rates unless I consider that the excess is counterbalanced by a shortfall as between the Counsel's fees claimed and the maximum that is reasonable and proportionate. I do not. I consider that a further downward adjustment is appropriate because of my conclusion as to Counsel's brief fees. In the light of those conclusions and the above reasoning, I consider that the overall figure which is reasonable and proportionate for the Claimant's costs for the phase is £115,000. I fix the budget in respect of the Claimant's Trial Preparation phase at £115,000 accordingly."

The High Court’s decision in Pontis Finance LLP v Karam, Missick & Traube LLP [2025] EWHC 2298 (Ch) demonstrates how courts can address excessive hourly rates through broad-brush phase reductions without breaching CPR 3.15(8)’s prohibition on fixing rates.

The case concerned a professional negligence claim brought by Pontis Finance LLP, a lender, against the defendant firm of solicitors, Karam, Missick & Traube LLP. Pontis had agreed to lend approximately £812,500 to an individual purporting to be Stefano Brugnolo, secured by a charge on a Mayfair property. The defendant firm acted for the borrower. Pontis’s case was that the defendant’s client was an impostor and that the firm had failed to perform adequate identity checks. Having advanced the loan monies, which were then paid to the impostor, Pontis claimed it had no prospect of recovery. The claim was for the return of the loan monies, interest, and associated fees, totalling approximately £1.2 million.

Following a Costs and Case Management Hearing (CCMC) on 21 February 2025, the court ordered the parties to file updated costs budgets. The intention was for the court to rule on these budgets promptly on the papers. Due to an administrative oversight, this ruling was significantly delayed from March to September 2025 [§6-8]. Consequently, costs for several phases of the litigation, most notably the Disclosure phase, transitioned from being future costs to incurred costs, thereby limiting the court’s ability to budget for them effectively [§9, §11.1].

Costs Issues Before the Court

The court was required to determine the reasonable and proportionate budgeted costs for the phases where it retained jurisdiction, specifically the Trial Preparation and Trial phases. The court could not set budgets for the Disclosure phase (as costs were now incurred), nor for Witness Statements and Settlement/ADR phases (due to uncertainty about what work had been completed) [§11]. The central issue was whether the overall figures claimed were proportionate, with a particular focus on the Claimant’s use of solicitors’ hourly rates that substantially exceeded the applicable guideline rates and the instruction of both a King’s Counsel and a junior barrister. The court had to assess proportionality by reference to the factors in CPR 44.3(5), primarily the sums in issue (£800,000 to £1.2 million) and the complexity of the litigation [§15].

The Parties’ Positions

The Claimant argued that the case involved complex legal issues concerning whether a duty of care was assumed to a non-client, the nature of any undertakings given, and potential breaches of trust. It submitted that the majority of the budgeted work was appropriately focused on the Trial Preparation and Trial phases and that the use of both leading and junior counsel was justified. The solicitors’ high hourly rates were presented as a reflection of the firm’s expertise.

The Defendant contended that the claim, valued at approximately £1.2 million, was towards the lower end of the scale for Chancery Division litigation and was not sufficiently complex to be categorised as “very heavy commercial work.” It argued that the case would substantially turn on its facts. The Defendant submitted that the Claimant’s solicitors’ hourly rates were excessive and unjustified, and that instructing both leading and junior counsel was disproportionate, particularly as a managing associate was also budgeted to attend trial.

The Court’s Decision

The court found that the Claimant’s overall incurred and budgeted costs of £489,891.31 were disproportionate for a claim of this nature and value [§31]. The case was assessed as being of moderate complexity, turning largely on its facts, and not qualifying as “very heavy commercial work” [§22]. Consequently, the appropriate guideline band for assessing solicitors’ hourly rates was London Band 2, not Band 1 [§35].

The court acknowledged that its role under CPR 3.15(8) was to approve phase totals, not to fix or approve specific hourly rates [§23]. However, following the approach in GS Woodland Court GP1 Ltd v GRCM Ltd [§26], it held that the combination of excessive rates and the number of hours billed could render a phase total disproportionate. The court therefore made broad, downward adjustments to the phase totals to reflect this.

For the Trial Preparation phase, the Claimant sought £136,550. The court found the number of solicitors’ hours (110) to be reasonable but the rates charged were substantially above the London Band 2 guidelines [§39]. It also found the aggregate counsel brief fees of £90,000 to be disproportionate [§44]. Applying a broad-brush approach, the court approved a budget of £115,000 for this phase [§48].

For the Trial phase, the Claimant sought £88,700. The court identified that the Claimant had erroneously budgeted for four days of counsel refreshers for a four-day trial; only three days were permissible, as the brief fee covers the first day [§51]. Furthermore, the solicitors’ rates were again deemed excessive. The court also disallowed most of the costs for an unexplained Grade D fee earner charged at £400 per hour [§58]. Considering all elements, the court approved a budget of £50,000 for this phase [§60].

The court declined to set budgets for the Witness Statements and Settlement/ADR phases due to the uncertainty over how much work had been incurred during the delay, rendering it impossible to distinguish between incurred and future costs [§11.2, §11.5]. The parties were advised to apply for a further costs management hearing if they wished to budget for these phases.

GS Woodland Court GP1 Ltd v GRCM Ltd [2025] EWHC 285 (TCC)

Key authority on how courts apply downward adjustments to phase totals where excessive hourly rates render them disproportionate

CPR 3.18(b) | Underspend Does Not Constitute Good Reason To Depart From An Approved Budget

Explores the interplay between budgeting and detailed assessment, relevant to understanding how courts control costs through budgeting

CPR 3.15A | Costs Budget Revisions | Significant Developments And The Need To Act Promptly

Details the requirements for varying costs budgets, relevant given the administrative delays that affected budgeting in Pontis Finance

2021 Guideline Hourly Rates, Use of Counsel And Division Of Common Costs

Discusses the application of guideline hourly rates and the use of both leading and junior counsel, directly relevant to the excessive rates and counsel fees issues

How Relevant Are The Guideline Hourly Rates?

Examines judicial attitudes to guideline rates being exceeded, providing context for understanding when rates significantly above guidelines may be justified

CPR 3.14 | Late Costs Budget | Relief From Sanctions Denied

Illustrates the consequences of failing to comply with budgeting requirements, contrasting with the administrative issues in Pontis Finance

Specialist costs services across the UK

TMC Legal provides expert costs drafting, negotiaton and costs budgeting services together with representation in detailed assessment hearings. Our experienced costs lawyers and law costs draftsmen act nationwide. Contact us today.