A dispute between the litigation funder and class representative in the marathon Mastercard claim has prompted a judge to recoil at the level of costs racked up.
Innsworth Capital was granted permission in January to intervene in the £200 million settlement agreed between claimant Walter Merricks and Mastercard. Innsworth had invested £45m in the case.
Merricks had applied for a court order preventing Innsworth from using confidential documents in support of its intervention, but the court rejected this and ordered that he pay the costs of Innsworth’s application response. In a judgment solely on those application costs, it was revealed that Innsworth’s solicitors Akin Gump had applied for Merricks to pay its total costs of £52,722.
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The Honourable Mr Justice Roth, acting president of the Competition Appeal Tribunal, said such costs were ‘wholly disproportionate and unreasonable’.
He made no criticism of the time spent by Innsworth’s solicitors but said the ‘remarkably high’ level of costs was explained by the hourly rate charged and instruction of both leading and junior counsel. The judge also pointed out that ‘somewhat remarkably’, the total fees for solicitors and counsel came to exactly £26,355 each.
Rates charged by Akin Gump came to £1,475 for Grade A fee earners, £1,120 for Grade B and £690 for Grade C. The firm billed at well over double, and in the case of Grade B solicitors almost triple, the central London guideline rates.
The judge recognised these were complex proceedings but said the documents application was not complicated: he refused anything more than 20% over the guidelines and assessed solicitors’ fees at £12,000. Counsel fees were pared to £10,000 as the amounts claimed had been ‘wholly disproportionate’.
The tribunal has yet to rule on Innsworth’s challenge to the final settlement, which was approved in February.
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