Lord Dyson, the Master of the Rolls, has rejected recommendations for new guideline hourly rates (GHR) because of a “fundamental” shortcoming in the evidence.
The Civil Justice Council (CJC) costs committee proposed changes to the GHR which would have the combined result of a net reduction in fee-income of 2.2% for qualified fee-earners and by just over 5% for all fee-earners.
Rejecting the proposals, Lord Dyson went on to rule out any inflation-based increase in the rates, which have been frozen since 2010.
Describing the situation as “deeply unsatisfactory”, he called for “urgent discussions” with the Law Society and the government to see what steps could be taken to obtain evidence on which the GHRs could “reasonably and safely” be based.
However, there was good news for Chartered Institute of Legal Executives (CILEx) fellows and costs lawyers.
Lord Dyson accepted the committee’s recommendation that CILEx fellows with eight or more years post-qualification experience should be included among Grade A fee-earners.
He agreed with the committee that qualified and regulated costs lawyers should be paid at GHR rates B or C, depending on the complexity of the work.
The Master of the Rolls rejected the idea of creating an additional Grade A star category for fee-earners with 20 years or more PQE or introducing a new Grade E category at the bottom end of the scale for paralegals with less than four years’ experience.
Lord Dyson said he found two concerns expressed by the costs committee itself about the lack of evidence “particularly compelling”.
He said two of the surveys on which the report was based, the Law Society’s Law Management Section Survey and the committee’s own survey were based on “self-selection”.
The other concern was that all of the surveys were based on “the responses of a very small part of the large community” of civil litigation solicitors.
“I have reached my conclusions after the most careful consideration and with considerable regret,” Lord Dyson said.
“But it would be wrong to make decisions as to appropriate GHRs which are not based on sufficiently robust evidence. It is imperative that sound and reliable evidence is obtained.”
Mr Justice Foskett, chairman of the CJC costs committee, attacked defendant law firms earlier this month for failing to respond to its survey.
In a letter to the Master of the Rolls, Foskett J said the committee had “no resources” with which to launch a comprehensive and statistically reliable evidence-gathering exercise.
“We have had no means of compelling responses to our own survey,” he said. “I should, perhaps, emphasise that I did warn the profession in some well-publicised observations before our own survey went ‘live’ that criticisms of the outcome of our work would be hollow if the critics had not responded to the survey.”
Foskett J said the committee’s concerns meant that a majority felt comfortable only with a phased implementation of the new rates, while others thought there should be capping and a phased approach.
He added that there was a “strong feeling” in the committee that a “different approach” to evidence-gathering would be needed when the next exercise was undertaken.