Defendant's Costs From Central Funds: What Hourly Rates Will the Court Allow? — R v Spriddell

Detailed Assessment — 2026-02-06

On appeal from a Determining Officer's assessment of a defendant's costs order following acquittal in a major SFO prosecution (the Balli Group fraud), Costs Judge Leonard held that routine items in a solicitor's bill should receive the same enhancement as preparation time in complex cases, but dismissed the appeal on counsel's fees. The Judge confirmed that reasonable remuneration under a DCO is measured by reference to legal aid rates, upholding reductions from counsel's negotiated fees of £300,000 and £180,000 to £250,000 and £164,454.50 respectively.

Overview

Date: 6 February 2026

Judge: Costs Judge Leonard

Nature of Proceedings: Appeal against determination of a defendant's costs order under s.16 Prosecution of Offences Act 1985, following acquittal on Serious Fraud Office charges

Key Issues:

Whether "routine items" in a solicitor's bill should receive the same enhancement as preparation time in complex cases
The appropriate level of counsel's fees under a defendant's costs order, assessed by reference to legal aid rates
The relevance of IFFO (Individual Fixed Fee Offer) arrangements as comparators

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The Facts

David Spriddell was the finance director of Balli Group and Balli Steel when the group collapsed in 2013 with approximately $1 billion in debts. The Serious Fraud Office prosecuted him for overarching fraud offences involving systematic financial misconduct and trade finance deception across 36 countries. Following what leading counsel described as the longest trial in his considerable experience, Mr Spriddell was acquitted on all counts on 2 February 2023.

A defendant's costs order was made on 6 April 2023, providing for payment from central funds of the costs of one King's Counsel, one junior counsel, solicitors, and disbursements, covering investigation, magistrates' court, and Crown Court proceedings.

Two issues arose on appeal. First, the Determining Officer had classified 174 items of magistrates' court work and 357 items of Crown Court work as "routine," remunerating them at fixed rates of £3.56 and £3.29 per item respectively, rather than at hourly rates. Second, the Determining Officer had reduced counsel's negotiated fees from £300,000 (Orlando Pownall KC) and £180,000 (Lee Marklew KC) to £250,000 and £164,454.50 respectively.

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Routine Items: Complexity Does Not Change the Clock

The appellant argued that nothing about a major SFO prosecution could properly be characterised as "routine." The submission was that routine correspondence covers "menial tasks like those carried out by secretarial and support staff, very short items such as calls to book counsel or check dates, or standard letters confirming a new date" --- not communications in a billion-dollar fraud case.

Costs Judge Leonard rejected this argument in principle but accepted it produced an unfair result in practice. On the core definitional question, the Judge was clear:

> "Routine items are so called by reference to the time they take (or should take), not by reference to the complexity of the underlying case."

A six-minute telephone call to confirm a hearing date remains a routine item whether the case concerns a shoplifting or a billion-dollar fraud. The complexity of the underlying case does not transform the nature of the communication.

However, the Judge found that where solicitors accept substantial responsibility in complex cases, routine items should benefit from the same enhancement applied to preparation time:

> "I find that the routine items identified by the Determining Officer should be allowed the same degree of enhancement as preparation time."

This is a nuanced but important distinction. The items remain "routine" in character, but the rate at which they are remunerated should reflect the overall enhancement warranted by the case's complexity.

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Counsel's Fees: Legal Aid Rates, Not Market Rates

The more substantial part of the appeal concerned counsel's fees. Mr Pownall KC had negotiated a fixed fee of £300,000 and Mr Marklew KC a fee of £180,000. The Determining Officer reduced these to £250,000 and £164,454.50.

The Assessment Methodology

The Determining Officer's approach was methodical. She first calculated the graduated fees that would have been payable under the Criminal Legal Aid (Remuneration) Regulations 2013: £126,788 for Mr Pownall and £63,438 for Mr Marklew. She then applied VHCC Category 2 hourly preparation rates with a 50% uplift, arriving at £185,990 for Mr Pownall and £98,815.50 for Mr Marklew. She further allowed Mr Pownall 252 hours of trial and weekend preparation at £374 per hour, plus refresher fees of £1,750 per day over 89 trial days. Mr Marklew received credit for 402.5 hours of preparation at £187 per hour (half of Mr Pownall's rate).

The IFFO Comparator

The appellant pointed to the fees paid to the co-defendant's (Louise Worsell's) counsel under an Individual Fixed Fee Offer (IFFO) arrangement: her KC, Mr Rudolf, received £438,800 and his two juniors £438,400 between them, based on a premise that 4,596 hours of preparation would be required.

Costs Judge Leonard rejected this comparison. The IFFO arrangements reflected different instructing timelines and were predicated on a different basis. More fundamentally, the Judge noted a tension within the regulatory framework: the 2013 Regulations "expressly do not apply to VHCCs except in relation to the reporting requirements and prescribed rates," raising at least "a respectable case" that an IFFO cannot be a valid comparator when calculating reasonable remuneration by reference to the 2013 Regulations.

The Governing Principle

The Judge applied the Simpson's Motor Sales principle: one must envisage "a hypothetical counsel capable of conducting the particular case effectively but unable to or unwilling to insist on the particularly high fee sometimes demanded by counsel of pre-eminent reputation."

Despite acknowledging the exceptional nature of the case, the Judge concluded:

> "Reasonable remuneration is measured by reference to Legal Aid rates of payment."

The Determining Officer's assessment was found to represent a reasonable outcome, and the appeal on counsel's fees was dismissed.

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The Orders

The appeal succeeded only in part:

Routine items: The Determining Officer's identification of routine items was upheld, but they were to receive the same degree of enhancement as preparation time
Counsel's fees: The appeal was dismissed; the fees of £250,000 (Mr Pownall KC) and £164,454.50 (Mr Marklew KC) stood
Costs of the appeal: Only the £100 appeal fee was recovered; no further costs were awarded given the limited success

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Key Takeaways

For Solicitors

1. Routine items are defined by duration, not case complexity --- A short communication remains routine regardless of the sophistication of the underlying matter. The classification turns on the time taken, not the subject matter. However, where a case warrants enhancement of preparation rates, routine items should benefit from the same uplift.

2. Defendant's costs orders are capped at legal aid rates --- The market rate for counsel is irrelevant. Even where counsel negotiate fixed fees above legal aid scales, the Determining Officer (and the court on appeal) will assess reasonable remuneration by reference to the rates prescribed by the Lord Chancellor. The gap between negotiated fees and assessed fees is the defendant's risk.

3. IFFO comparators are unreliable --- Fees paid under Individual Fixed Fee Offers to co-defendants' counsel are a poor benchmark. They reflect different circumstances, different timelines, and may not even be valid comparators under the 2013 Regulations' framework for VHCCs.

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Conclusion

R v Spriddell is a sobering decision for defendants who have been acquitted of serious charges and seek to recover their legal costs from central funds. The case confirms that defendant's costs orders operate within the constraints of legal aid rate frameworks, not at market rates, regardless of the gravity or complexity of the prosecution.

The practical consequence is significant. Where defendants instruct leading counsel at privately negotiated rates --- as they often must in cases of this magnitude --- the shortfall between the negotiated fee and the amount recoverable from central funds falls on the defendant personally. In this case, Mr Pownall KC's agreed fee of £300,000 was reduced to £250,000, and Mr Marklew KC's fee of £180,000 was reduced to £164,454.50. An acquitted defendant bears the difference.

The routine items point is more positive for practitioners. While the classification of items as routine was upheld, the requirement that they receive the same enhancement as preparation time is a welcome recognition that even short communications in complex cases are undertaken by skilled lawyers whose time warrants appropriate remuneration.

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Citation: R v Spriddell [2026] EWHC 233 (SCCO)

Full judgment available at: BAILII

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