Is Wraith still relevant when considering hourly rates?

The recent decision of His Honour Judge Matthews, sitting as a High Court judge, in EJW Builders Ltd & Anor v Marshall & Ors (Re Costs) [2025] EWHC 2898 (Ch) questioned whether Wraith v Sheffield Forgemasters Ltd/Truscott v Truscott [1997] EWCA Civ 2285 would be decided the same today. The Truscott decision is summarised in the Guide to the Summary Assessment of Costs:

“In a case which has no obvious connection with London and which does not require  expertise only to be found there, a litigant who unreasonably instructs London solicitors  should be allowed only the costs that would have been recoverable for work done in the  location where the work should have been done”

Here, the receiving party had been represented pro bono by a firm of solicitors appointed by a legal charity. A pro bono costs order had been made enabling recovery of costs. The solicitors were based in the City of London and would normally attract London Band 1 Guideline Hourly Rates if the matter was properly described as “very heavy commercial and corporate work” but, otherwise, London Band 2. The Judge concluded it fell into the latter category. The claim proceeded in Bristol and the argument was whether the rates should be limited to those appropriate for Bristol (National Band 1). The Judge also decided that the matter could have been handled by local Bristol solicitors.

The Judge questioned whether the same factors as were considered relevant in Truscott continue to apply today:

“Assuming that it were right in the present case to ask whether the defendants acted reasonably, it does not follow that the factors identified by Kennedy LJ in Truscott would necessarily be the same today. The legal services market itself has changed enormously, over the last three decades, since Truscott was decided. There is much more choice of provider than there was then, and much more choice of funding agreement, including conditional fees, ATE insurance, and commercial litigation funding. Advanced technology is also eroding both distance and sense of place. Many firms have multiple offices in different parts of the country, including one in London, as well as large provincial centres. Some fee-earners work in more than one office. Specialisation is ubiquitous. A nimble-footed, highly specialist niche London firm, for example, may charge a higher hourly rate than a high-street provincial firm, but may do the same job more efficiently and quickly, so eroding the latter’s headline cost advantage. What it is reasonable for a paying litigant to do today in seeking legal services may therefore not be the same as at the time of Truscott. It all depends.”

It is no doubt correct that the legal services market has changed dramatically since 1997. Perhaps the most dramatic change has been the explosion of remote working. There are now good arguments as to whether the geographical location of solicitors’ offices should remain relevant for determining hourly rates. However, one has to question whether it was open to the judge to doubt the long established principles. The last Consultation into Guideline Hourly Rates recommended keeping the existing regime with any consideration of the impact of, for example, remote working being postponed for several years.

On the facts of the case, the Judge concluded:

“asking whether it was reasonable of the defendants to instruct a London firm rather than a provincial one would be an artificial exercise in the present case. This is because the defendants were allocated the services of this firm by Law Works, and had no real choice in the matter. If they wished to be represented free of charge by legal professionals, they would have to accept this firm. In my judgment, it is not appropriate to approach this matter by asking simply whether it was reasonable for the defendants to instruct Morgan Lewis & Bockius. …  In my judgment, it was reasonable for the defendants, unable to finance their defence by professional lawyers, to accept the offer of free representation by Mr Brown and Morgan Lewis & Bockius. I will therefore apply London band 2 hourly rates to the solicitors’ notional costs, rather than National band 1.”

Taken entirely in isolation, this reasoning looks uncontroversial. However, it completely ignores a key passage from Truscott:

“I accept that it was reasonable for Mr Wraith to consult his trade union, but the trade union knew or ought to have known what sort of legal fees it would have to expend to obtain competent services for Mr Wraith, who lived in Sheffield and had sustained a serious accident there. Once Mr Wraith consulted his union that knowledge must be imputed to him. As Potter J accepted ‘no doubt there were firms of solicitors in Sheffield or Leeds well qualified to do the work’ and in reality the only reason why the work went to London solicitors was that the union had adopted the practice of sending all their work to those solicitors. That connection seems to me to be of limited relevance on taxation in an individual case. …

None of what I have just said is intended to put pressure on trade unions or insurers to change their policy and parcel out work so that different solicitors act for them in different areas. Some insurers and some unions already operate in that way. Others use one solicitor who has local branches, as is now the case with RJW, but whatever approach is adopted it seems to me that it is the duty of unions and insurers in each individual case to keep down the costs of litigation, and that may well mean that if they go to London solicitors who charge London rates for a case which has no obvious connection with London, and which does not require expertise only to be found there, they will, even if successful, recover less than the solicitors have charged.”

There is no obvious reason why the principles that apply to trade unions and insurers should not apply equally to legal charities. Was the Judge not referred to this passage and, if he was, why did the Judge conclude this was irrelevant or could be distinguished?