Page 16 - PIC Magazine Issue 25 - Autumn-Winter 2025

In-house
Solicitors
Caroline Engledow - Costs Lawyer at Resolution Costs.
I am taking a look at the hourly rates recoverable between the parties
in litigation for in-house solicitors. By this, I mean solicitors who are
employed by government bodies, corporations and local authorities,
and for work that they have done for their clients or the organisation
that employs them.
hen it comes to assessing the hourly rates for such employed solicitors the position is similar to the
assessment of the reasonableness of the rates of a solicitor in private practice.
For employed solicitors the leading case applicable is Re Eastwood [1975] Core Costs Law Reports 50 and
this is the binding authority from the Court of Appeal concerning the recovery of costs by government and
other corporate institutions. It considered whether a fee earner working in-house, for example in local government,
can recover costs from an unsuccessful party at the same level as a fee earner in private practice.
In giving judgement Lord Justice Russell explained this was applicable “to the case of a local government authority,
a nationalised industry… and any industrial concern conducting litigation through its own legal department of
which all the expenses, including the salaries of solicitors, assistant solicitors and legal executives, are paid by it
and not by instructing an independent solicitor or fi rm to act for it”.
In summary the court held:
2 2 2 2
There is no reason to suppose that
the conventional method [of assessing
hourly rates] is other than appropriate
to the case of both independent and
employed solicitors.
1 1 1 1
In cases of this sort it is the proper method of
[assessment] of a bill is to deal with it as though it
were the bill of an independent solicitor, assessing
accordingly the reasonable and fair amount of a
discretionary item such as this, having regard to
all the circumstances of the case.
4 4 4 4
There may be special cases in which it appears
reasonably plain that principle will be infringed if the
method of taxation [assessment] appropriate to an
independent solicitor’s bill is entirely applied; but it
would be impracticable and wrong in all cases of
an employed solicitor to require a total exposition
and breakdown of the activities and expenses of the
department with a view to ensuring that the principle
is not infringed, and it is doubtful, to say the least,
whether by any method of certainty on the point
could be reached.
3 3 3 3
It is a sensible
and reasonable
presumption that the
fi gure arrived at on this
basis will not infringe
the principle that the
[assessed] costs should
not be more than an
indemnity to the party
against the expense to
which he has been put
in the litigation.
Those familiar with the guideline rates for summary assessment and the charges for solicitors in private practice may
know that these comprise an allowance for the actual cost of doing the work, known as the ‘A’ factor, and an allowance
for the profi t/special skill applied/care and conduct applied to the case, known as the ‘B’ factor. It has been argued that
in-house solicitors should not recover the ‘B’ factor, but such arguments have been dismissed. The assessment in Re
Eastwood makes particular reference to these factors, then see Maes Finance Ltd. v Edwards & Partners [2000] 2 Costs
LR 198 for the argument being specifi cally rejected in the Hough Court, QBD, by Mr Justice Elias.
INDUSTRY EXPERTS
16 16 INDUSTRY EXPERTS
Partners In Costs