Guideline hourly rates to remain the same

Guideline hourly rates to remain the same

The Master of the Rolls has today announced that the Guideline Hourly rates (GHRs) will remain the same for the time being.

The Master of the Rolls has concluded that he cannot, at this time, make any changes to the rates. The issue is the need for much more comprehensive data to be available for the committee. Despite this, some recommendations set out in the report have been accepted by the Master of the Rolls.

Background to the CJC Costs Committee report

This is the first review of GHR by the Civil Justice Council Costs Committee; it was previous undertaken by Master of the Rolls, but, on 31 October 2012, the Government announced that this role would be transferred to the CJC from January 2013. The CJC set up the Costs Committee to carry out the review. The committee was asked to provide a ‘comprehensive evidence-based review’ of the GHR with a view to then making recommendations to the Master of the Rolls. Difficulties have been encountered in seeking to make recommendations as to new hourly rates. This is clearly set out by the Chairman of the committee, The Honourable Mr Justice Foskett, in his letter to the Master of the Rolls (see Recommended Documents). While the committee made recommendations for new GHR, it did so with ‘considerable reservations’.

Conclusion on the proposed GHR

The Master of the Rolls concluded that he could not accept the recommendations to change the GHRs, on the basis of the concerns expressed by the committee in its report. These were:

  • the surveys used to obtain the statistical data suffered from not being were not randomised surveys; there was a ‘self selection’ nature to the respondents who replied
  • the responses comprised a very small number of the civil litigation solicitors throughout England and Wales
  • many of those that responded would not have engaged in a significant amount of multi-track litigation
  • there was a need to lessen the immediate impact of the proposed changes, which some rates decreasing. Consideration should therefor be given to rolling out the changes

The Master of the Rolls in making his decision, wrote:

The present situation is deeply unsatisfactory.  GHRs are needed to guide summary and detailed assessments of costs.  There needs to be public confidence that there is a reliable basis for them.  I propose, therefore, to have urgent discussions with The Law Society and the Government to see what steps can be taken to obtain evidence on which GHRs can reasonably and safely be based.

I have reached my conclusions after the most careful consideration and with considerable regret. 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.

The other issue to consider was the fact that, during the period since the committee was set up, civil litigation costs have undergone a seismic change with the introduction of the Jackson Reforms. The committee did not take these into account. The Master of the Rolls considered that the committee was right to take this approach but noted that the reforms may well have created considerable uncertainty, at least in the short term.

Recommendations - other than the GHR

These are set out in the CJC Costs Committee report

Recommendations to be implemented on 1 October 2014

  • Grade A fee earners will now include Fellows of CILEX with 8 years post-qualification experience (section 6.1)
  • Costs Lawyers, who are suitably qualified and subject to regulation, will now be eligible for payment at Grades C or B; the grade will depend on the complexity of the work (section 6.2)

Recommendations not to change the current position

  • a new Grade A* star - this had been proposed for fee earners with over 20 years PQE who had a superior skill and expertise (section 6.3)
  • separate GHR bands specific to specialist fields of civil litigation - there had been a call for bands for specialist fee earners especially in the field in personal injury, clinical negligence and commercial litigation (section 6.6)
  • separate rates for detailed assessment - there had been a call for separate rates for detailed assessments of costs. While this has not be brought in, the recommendation which has been accepted is that greater flexibility should be applied in detailed assessments than the courts would normally apply in a summary assessments (section 6.7)

Recommendations which have been rejected

  • The recommendation to introduce a new Grade E for paralegals - this was recommended on the basis of the wide disparity between the people who currently fall into Band D.  The Master of the Rolls has decided to retain the Grade D rates as the starting point for assessment.  This was on the basis that there is currently no comprehensive data as to paralegal salaries or costs and therefor no basis on which to conclude that the recommendation reflects the market (section 6.4).

Read our previous discussion of GHRs here and  find further details here.

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About the author:

Janna is a dispute resolution lawyer. She deals primarily with cross border issues and is active in the work being undertaken in relation to the implications of Brexit for Dispute Resolution lawyers. Janna also heads up a LexisNexis costs team bringing together expertise from across the company to deal with the costs issues facing the profession.