Lukewarm response to guideline hourly rates reform

Green: Action needed on costs lawyers’ banding

Last week recommended changes to the guideline hourly rates (GHR) have generated a lukewarm response from the profession.

The Civil Justice Council working party put forward what it called “modest” increases as well as changes to the London bands and a requirement that London firms charging London rates must certify that the work was actually done in the capital.

The Law Society’s head of justice, Richard Miller, agreed that the GHR were “long overdue a review”.

He added: “Although this report has been carried out as a standalone piece of work, it will be important to consider these changes in the context of other civil justice reforms including the Ministry of Justice’s work on fixed recoverable costs and the wider HMCTS reform programme.”

Claire Green, chair of the Association of Costs Lawyers, recognised that deciding on new rates was “no easy task”.

She continued: “The working group describes its proposed increases as ‘modest’ and if nothing else that will hopefully aid their approval should they be the final figures recommended to the Master of the Rolls.”

She welcomed some of the “tweaks”, most notably by recategorising London 1 and London 2 bands to reflect the type of work done rather than a firm’s postcode, and ensuring that every part of the country outside the capital was specifically allocated to a band.

“The working group notes that, back in 2015, the then Master of the Rolls, Lord Dyson, accepted the recommendation that suitably qualified costs lawyers should be eligible for grades B and C. Implementation of this, and recognition of the value of our work, is now long overdue.”

The working party said it did not address this issue given what happened at the last review.

Ms Green added: “The group clearly sees its work as an interim measure ahead of a fundamental review of the GHR in the context of the profession’s changing working practices. To some extent, the GHRs do reflect a time when legal life was very different to today’s technology enabled practice.

“But in the meantime it is important that costs lawyers and solicitors have their say on the working group’s report.”

In its submission to the group’s call for evidence, defendant firm Keoghs expressed concern that it was gathering data about the hourly rates claimed upon assessment – which because of conditional fee agreements were “not representative of the hourly rates that a claimant would actually pay his solicitor for the services provided” – as well as the amount allowed on assessment.

The firm’s data showed that only 1% of cases went to assessment and the hourly rates were the pre-eminent issue in most of them “because those claimed significantly exceed the hourly rates claimed in the 99% of cases that settle without a hearing”. This meant the average hourly rates that the court assessed in those cases was not representative of the average hourly rates claimed.

Howard Dean, a partner and director of costs at defendant firm Keoghs, said these concerns were not addressed, “largely as a result of the decision not to pursue more meaningful, and current, relevant data”.

He continued: “Furthermore the new GHR and Guide to Summary Assessment risks ‘double counting’ of the factors that affect the hourly rate allowed between the parties because the data informing the proposed GHR comes from the hourly rates on multi-track cases that have proceeded to provisional and detailed assessment.”

He argued that the hourly rates claimed and allowed in such cases already took into account elements such as value, importance to the claimant, complexity, and skill involved, in what may be high-value, life-changing, complex injury claims.

But the report recommends that judges could allow rates in excess of the GHR for “substantial and complex litigation” by taking these same factors into account.

“It follows that duplication may arise where the court allows a materially higher rate than the proposed guideline rate,” Mr Dean said.

Sarah Prager, a barrister at 1 Chancery Lane, questioned whether, with the rates for London 3 and National 1 and 2 converging, there would eventually be only two bands: “London and Here Be Dragons.”

She wrote on the chambers’ website: “Some might go even further and question whether in the new era of working from home a London weighting is justifiable at all…

“We did, however, note with approval that the CJC recognises that the rates for counsel in the White Book 44SC.39 are ‘hopelessly out of date’, ‘unhelpful’, and ‘should be deleted from the guide’.”

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