Cleary Gottlieb has had its knuckles rapped for seeking to recoup costs at nearly double the maximum guideline hourly rates for litigation (£1,100 per hour). The White Book prescribes a maximum hourly rate of £512 for "very heavy commercial or corporate work" by central London firms. The maximum rate reduces to £373 for other inner London City work, and to £261 for work conducted outside London. 

While it may be difficult to sympathise with a firm which last year reportedly had global revenues of more than £935m, it is obvious that the guideline rates in the White Book have failed to keep pace with the reality of charge-out rates (both in and outside of London). The eye-watering London salaries on offer for newly qualified solicitors alone are often in the news, which can only translate into increased hourly rates for clients. 

But what clients are prepared to pay and the amount which courts are willing to allow them to recoup in adverse costs are increasingly distinct issues. This case should serve as a reminder to law firms to ensure that clients are properly advised in their retainer letters about the costs risk in litigation (including the amounts actually capable of recovery), otherwise it could lead to awkward conversations when the "successful" party in litigation still ends up with a large bill for irrecoverable costs.