The committee reviewing the guideline hourly rates (GHR) is set to issue a short call for evidence next month and it is vital that practitioners participate in the process, the Association of Costs Lawyers (ACL) has warned.
HHJ Hodge QC, the circuit judge member of the Civil Justice Council costs committee conducting the review, told last week’s ACL Costs Conference in Manchester that it hopes to issue a call for evidence at the beginning of November, with a deadline of the end of the month for responses.
“Practitioners have a chance to inform the process,” he told delegates, “but only by submitting their views, supported by evidence.” There will also be oral sessions with selected professional bodies, organisations and firms in February 2014.
The committee is looking to supplement and test the data it has gathered so far by seeking information from practitioners on salaries, fee income, hours claimed and overheads for each grade of fee-earner in each geographical band, as well as the spread of income between different areas of work.
The GHR were last increased in 2010 and the committee – which is chaired by Mr Justice Foskett – has been charged with conducting a comprehensive evidence-based review and making recommendations to the Master of the Rolls by 31 March 2014 to assist him in setting new rates. It has warned practitioners not to assume the rates will go up as a result.
Judge Hodge said the current GHR are effectively based on data from 2007 and there is a need to review the current costs of running a law firm. As evidence emerges, the impact of the Jackson reforms and alternative business structures will have to be considered too, he added.
Other issues include whether there should be distinct rates set for significant areas of litigation – such as commercial, personal injury and clinical negligence – and rethinking the geographical bands. Defining City practices, to which higher GHR apply, by whether they have ‘EC’ postcodes is outdated, he suggested, given that, for example, Clifford Chance and Lawrence Graham are in E14 and SE1 respectively.
Murray Heining, chairman of the ACL, said: “Though the GHR are a benchmark, and not the fixed rates some believe them to be, the committee’s work will lay the foundations of costs assessments for years to come. This process will make the GHR even more influential than they already are and it is imperative that costs lawyers and solicitors ensure that the committee has all the information it needs to recommend realistic and viable new rates.”
Separately, a recently published note of the June meeting of the committee showed that it is initially working from five surveys. These are three pieces of Law Society research – a 2012 practising certificate holders survey, 2011 firm finance survey and 2011 law management section survey – along with the PwC top 100 law firms survey from 2012, and data provided by defendant costs firm Jaggards. The note recorded that the available data might be cross-checked with similar professions.
The committee also discussed “how and to what extent it should challenge the breakdown that seemed to be emerging” – that firms’ income was accounted for by salaries, overheads and profit in broadly equal measure.