Commercial Litigation Costs are Too High

Posted: Thursday, 18 December 2008 @ 18:53

Mr Justice Arnold has called for the courts to take a more pro-active approach in curbing the fees that large commercial law firms charge for litigation.

Allen & Overy represented Research in Motion, the makers of the popular BlackBerry mobile device, in intellectual property litigation against Visto, a US technology company. This was not the first time these parties had met in court and, on the last occasion, Allen & Overy racked up charges of nearly £5.2 million in preparing for and running a 5-day trial, a sum that the judge considered was astonishing.

The judge has ordered each party’s solicitors to reveal the costs they have so far billed and to give estimates to the court and each other of likely future costs. Such an order is unusual in patent actions but common in other forms of commercial litigation.

Courts have the power to limit costs by managing cases more closely, by saying what steps should be done and what should not be done, for example, and can cap costs to a certain pre-determined level. However, these powers are rarely used.

What really amazes me about this case is why businesses go to these large commercial law firms at all for litigation. Partners charge huge fees (£750 per hour is not unusual in London) and most work is done by newly qualified or unqualified lawyers who are prone to take ages doing work that a senior solicitor could do quickly and simply.

One of my objectives in setting up Cousins Business Law was to provide specialist business-law services at a partner level for all clients and at a fraction of the cost that these large business firms charge. I guess that’s one of the reasons why we’re growing and recruiting lawyers while many other commercial law firms are struggling at the moment.

Gary Cousins, Business Lawyer

Blog by Gary Cousins
Gary has been providing legal advice to shareholders, directors and business owners for over 25 years. Specialising in dispute resolution Gary is based in Birmingham with clients throughout the UK and overseas. View profile
Call Gary on +44 (0)121 778 3212 or by email
This blog is not intended to constitute legal advice, nor is it intended to be a complete and authoritative statement of the law, and what we say might be out of date by the time you read it. You should always seek legal advice to confirm whether or how any information in this article applies to your particular situation. We offer a free telephone consultation to discuss your particular circumstances.

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