Senior judges mull guideline hourly rate review

Kirby: Ohpen a useful ruling to carry around

A group of senior judges at the helm of the civil courts are considering a review of the guideline hourly rates (GHR) “as a matter of urgency”, it has emerged.

There is growing pressure to revise the rates – which have been in place since 2010 – in the wake of comments by Mrs Justice O’Farrell last year in Ohpen that there were unsatisfactory, not helpful and out-of-date.

The Association of Costs Lawyers called for a review following her ruling and also a poll of its members, who said a review was needed urgently, as the GHR were doing more harm than good.

Speaking at December’s meeting of the Civil Procedure Rule Committee, whose minutes have just been published, chair Lord Justice Coulson explained that the civil executive team was “actively considering this matter as a matter of urgency, with a short report to follow”.

The team was set up in 2016 to support the Master of the Rolls in overseeing civil justice and implementing court modernisation.

The next step would be to decide whether this was something for the CPRC to consider, “possibly with outside advice/assistance”, or whether it was more appropriate for the Civil Justice Council to look at it. This would be a decision for the Master of the Rolls, Sir Terence Etherton.

In a recent podcast from London chambers Hardwicke, well-known costs counsel Robin Dunne said the continued existence of rates set in 2010 was becoming “intolerable” for both claimant and defendant representatives alike.

He suggested that, if they remain unchanged, “solicitors will have to end up preparing expense of time calculations for assessments because judges have to start somewhere”.

Also in the podcast, PJ Kirby QC described Ohpen as “a good decision to carry around with you if you are the receiving party” and predicted there would be “further consideration and criticism” of the GHR in the coming year.

Mr Dunne said the “trouble” with the concept of market rates was whether the judge has knowledge of them and whether they would be challenged.

Ultimately, he said the GHR would only be sorted out by the solicitors’ profession “as a whole” providing evidence on the cost of litigation – which it failed to do when the GHR were last reviewed in 2014/5 – or “individual firms coming to the court armed with the figures which justify the cost doing the work and how much the cost has gone up since 2010”.

    Readers Comments

  • Bill says:

    Odd that there seems to be a presumption hourly rates should go up. The evidence in 2014/2015 suggested most of them should go down.

    The guideline rates did not reflect the going rates anyway. In 2001 Grade A rates were introduced as an extra higher rate. Probably as an alternative to working out enhancement for the few cases that warranted it. What actually happened was Grade A became viewed as being the same as old Grade 1 (qualifications for which were commensurate with Grade B) and the rates awarded generally increased. From 2003 the GHR simply increased in line with the RPI. This belied the fact overheads increased relatively little. Wage and rent increases were more than offset with case management software advances reducing time spent and admin/secretarial overheads. The fixed costs for fast track PI cases solicitors are now paid less than they were in 2003 let alone 2010. A lot of them are going to the wall but others cut their cloth accordingly thrive on less than was paid 17 years ago.

    In the context of non fiexed PI and clin neg claimants don’t pay the hourly rates they are notionally charged in the retainer as the case is invariably funded by CFA, DBA, LEI or legal aid. There is no ostensible market rate. Some Costs Judges purport to have knowledge of what the market rate is. They don’t (unless they have happen to have been running an efficient post LAPSO practice recently). They like most of us have no evidence. They may see what lots of solicitors charge but in the absence of market forces claimants have no restraining factor on the hourly rates they charge other the judge themselves. Defendant’s typically charge less than two thirds the guideline rates but seek to recover more inter partes with CCFAs. The present rates are set by Costs Judges but for those Judges to assert knowledge of the going rate is a circular argument. The going rates is what they allow and what they allow presently has no evidential basis.

    The suggestion individual firms can provide evidence of the going rate by reference to their overheads is also flawed. How does a judge determine if those overheads are reasonable or not when there is no market rate to compare them to.

    The evidence obtained for the 2014/15 review also seemed to have been obtained on an odd basis – by considering the rates charged and awarded on assessment rather than overheads. A circular exercise.

    The only way to look at guideline rates is to look at expense of time calculations for firms of solicitors (undertaking similar types of work in similar geographical areas, look at profit levels and set the rate factoring in a reasonable degree of profit.

Leave a Comment

By clicking Submit you consent to Legal Futures storing your personal data and confirm you have read our Privacy Policy and section 5 of our Terms & Conditions which deals with user-generated content. All comments will be moderated before posting.

Required fields are marked *
Email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.


30 March 2021

Judicial review reform: A risk to the courts’ post-Brexit standing

In addition to questions about the motivations for curbing legal challenges to political decisions, the proposed reforms to judicial review raise concerns about undermining the reputation of the English courts

Read More