Guideline Hourly rates – Where are we now?
If you are familiar with the civil litigation costs process, then there is a very good chance that at some stage you will have come across the term ‘Guideline Hourly Rates’ (GHRs).
GHRs refers to the set of hourly rates issued, originally by the former Supreme Courts Costs Office (SCCO) up until 2006, and in more recent times by the Master of the Rolls, as Head of Civil Justice, up until 2010.
The GHRs were intended to be used as a starting point for judges carrying out summary assessments of costs, i.e., the procedure by which the Court, when making an order about costs, orders payment of a sum of money instead of fixed costs or ‘detailed assessment'. However, the judiciary also often adopt the GHR as a starting point for the assessment of hourly rates when undertaking detailed assessments of costs as well.
The GHRs, listed by pay band and grade for different parts of the country, were last updated in January 2010, approximately 11 years ago now.
The last GHRs set in 2010 were as follows:
Grade | London 1 | London 2 | London 3 | National 1 | National 2 | National 3 |
Grade A – Solicitors over 8 years’ qualified experience | £409.00 | £317.00 | £229.00 – £267.00 | £217.00 | £201.00 | £201.00 |
Grade B – Solicitors or Legal Executives (CILEX) over 4 years’ qualified experience | £296.00 | £242.00 | £172.00 – £229.00 | £192.00 | £177.00 | £177.00 |
Grade C – Other qualified Solicitors or Legal Executives | £226.00 | £196.00 | £165.00 | £161.00 | £146.00 | £146.00 |
Grade D – Trainee Solicitors, paralegals or equivalent | £138.00 | £126.00 | £121.00 | £118.00 | £111.00 | £111.00 |
The GHR were not reviewed between 2011-2013, however in May 2014, the Civil Justice Council Costs Committee made recommendations for increased Guideline Hourly Rates for 2014 in their report to the Master of the Rolls, Lord Dyson.
Despite the Committee’s recommendations for an increase to the GHR, the only amendments that were accepted by Lord Dyson were as follows:-
- Fellows of CILEX with eight years’ post qualification experience were included within Grade A; (introduced on 1 October 2014)
- Costs Lawyers who are suitably qualified, and subject to regulation, depending on the complexity of the work were eligible for Grade C or Grade B payments; (introduced on 1 October 2014)
Since then, despite growing pressure from some within the legal industry to update the GHR due to things such as increased overheads and fluctuating levels of inflation, the Guidelines have up to now remained unchanged.
Given the increased pressure for Fixed Recoverable Costs in recent years, driven strongly by the insurance industry, it was thought by some that the GHR would never rise again.
So, does this ultimately mean the GHR will remain unchanged until such time as Fixed Costs Recoverable Costs are implemented?
Well, if recent case law over the issue of GHR in the past year or so is anything to go by, then the answer would appear to be no.
The first signs that the senior judiciary were concerned with the issue was in October 2019 in the case of Ohpen Operations UK Ltd v Invesco Fund Managers Ltd [2019] EWHC 2504 (TCC). In her ruling on costs, Mrs Justice O'Farrell urged a review of the GHR, saying the current levels were “not helpful” when deciding what reasonable rates should be in 2019.
These comments were followed by a meeting of the Civil Procedure Rule Committee in March 2020, a sub-committee of the Civil Justice Council (CJC) established to review the GHR. They hoped to have a report ready for full consultation by the end of 2020. However, given the impact of Covid-19 during 2020, it appears this timeframe will not be met.
However, pending the outcome of the review, in the last few months there has been some important judgments which have provided some updated guidance over the issue of GHR.
Firstly, in his judgment in PLK & Ors (Court of Protection : Costs) [2020] EWHC B28 (Costs), Master Whelan directed Senior Courts Costs Officers to allow, with immediate applicability, rates that are up to 20% higher than the 2010-fixed GHR when conducting Court of Protection assessments (as long as they relate to outstanding billables from 2018, 2019 and 2020 onwards).
More recently, when ruling on the appeal in Cohen v Fine & Ors [2020] EWHC 3278 (Ch), HHJ Hodge said GHR “should be the subject of, at least, an increase that takes due account of inflation” and that pending the outcome of the CJC’s review, the GHR should be increased by 35% to reflect this.
It seems a lot of the judiciary are now ceasing to treat the current GHR as an appropriate ‘starting point’ for the assessment of hourly rates. However, to what extent the CJC will take on board these recent judgments and the effect this will have on the GHR going forward remains to be seen.
Only one thing is for certain, until such time as the CJC release their report, arguments over the appropriate starting point for the Court when assessing hourly rates will continue to rumble on.
by Ryan Bradford Costs Lawyer