A&O slammed for “shocking” costs

Allen & Overy

(A&O) has been slammed by the High Court for racking up almost £5.2m in costs and spending the equivalent of nine man years for a five-day trial.

Mr Justice Floyd, in handing down his cost judgment yesterday (17 April), on patent infringement case Research In Motion UK (RIM) v Visto, held there was “quite a staggering disparity” between the cost estimates of the two parties.

Visto’s lead partner Gary Moss from Taylor Wessing estimated that his firm’s costs would be £1m compared to £5.18m for A&O acting for RIM.

Floyd J said he had been given a breakdown of costs, which “reveals some really shocking statistics”.

Over the 15 months between the claim form being issued and the trial, the magic circle firm had one partner, Nicola Dagg, three senior associates and three associates as well as an unspecified number of trainees and paralegals working on the case.

One of the senior associates spent 2,252 hours working on the case while another spent 2,291 hours. For these two associates alone the charges amounted to nearly £2m.

Floyd held: “For these sums of money one would be entitled to expect each of them to be able to recite all the documents in the case by heart.”

The judgment continues that Dagg spent 1,387 hours on the case, while the remaining associates spent 3,500 hours or so between them.

In relation to other legal costs, Floyd ruled: “Perhaps most surprising of all is that another £1m odd has gone on trainees and paralegals. They have spent over 5,000 hours on the case.”

Dagg defended the high costs for paralegals and trainees by stating that her instructions were to leave no reasonable stone unturned, but Floyd J felt that the research was unnecessary and “surprising”.

Floyd J ruled: “If one adds up all the hours spent by RIM’s solicitors, one finds that some nine man years have been spent over 15 months. All for a trial with no disclosure which lasted about five days.”

The cost order came about following Visto and RIM disputing three patent infringements. RIM was the overall winner in relation to one while on the other two RIM consented to their revocation before trial.

The High Court’s final order was for a cost judge to go through RIM’s costs item by item so Visto could pay 66 per cent costs on all three patents. RIM was ordered to pay 51 per cent of Visto’s total assessed costs on all three patents.

A spokesman for A&O said: “”The reality is that the legal costs were a tiny fraction of the value of RIM’s business, which was put at risk through this litigation. A&O’s efforts also benefited RIM and the industry by removing Visto’s ability to pursue disproportionate financial gain from the patent.”

Dagg instructed Antony Watson QC as lead counsel with Thomas Hinchliffe, both of Three New Square for RIM.

Moss instructed lead counsel Henry Carr QC of 11 South Square, assisted by Henry Ward of 8 New Square.