GUIDELINE HOURLY RATES
I deal with this subject in detail in my forthcoming book – Personal Injury Small Claims, Portals and Fixed Costs available from Amazon here.
the Senior Courts Costs Office considered some principles in relation to hourly rates and Conditional Fee Agreement success fees.
This was difficult litigation in relation to phone hacking and was regarded of great importance to the claimant.
The Court allowed the following rates, and it will be seen that these were not significantly above the Guideline Hourly Rates last reviewed in 2010.
|Grade||Rate Allowed||Guideline Hourly Rate|
Thus it seems now that even in the most difficult and important case, as far as recoverable costs are concerned there will be no significant increase on guideline hourly rates.
No doubt this is part of the move to Fixed Recoverable Costs for everything.
The effect is that the Guideline Hourly Rates have not gone up for seven years.
With the incoming tide of Fixed Recoverable Costs they will almost certainly never rise again.
These rates are as follows:-
|Grade||London 1||London 2||London 3||National 1||National 2||National 3|
|Grade A – Solicitors or Fellow of CILEX over 8 years’ qualified experience
(my italics to emphasise the change under the Guideline Hourly Rates 2014).
|£409.00||£317.00||£229.00 – £267.00||£217.00||£201.00||£201.00|
|Grade B – Solicitors or Legal Executives (CILEX) over 4 years’ qualified experience and Costs Lawyers who are suitably qualified, and subject to regulation, depending on the complexity of the work
(my italics to emphasise the change under the Guideline Hourly Rates 2014).
|£296.00||£242.00||£172.00 – £229.00||£192.00||£177.00||£177.00|
|Grade C – Other qualified Solicitors or Legal Executive and Costs Lawyers who are suitably qualified, and subject to regulation, depending on the complexity of the work
(my italics to emphasise the change under the Guideline Hourly Rates 2014).
|Grade D – Trainee Solicitors, paralegals or equivalent||£138.00||£126.00||£121.00||£118.00||£111.00||£111.00|
A full list of the areas covered by the categories (London 1, London 2, London 3, National 1, National 2 and National 3) can be found here.
The Civil Justice Council Costs Committee, chaired by Foskett J., made recommendations on the Guideline Hourly Rates for 2014 in their report to the Master of the Rolls, Lord Dyson, in May 2014.
The recommendations made by the CJC Costs Committee included:-
- new rates as follows:-
|Grade||National||Inner London||Outer London|
|Grade E – paralegals or non-legally qualified fee-earners with less than 4 years’ civil litigation experience||£75.00||£109.00||£83.00|
- introduction of Grade E for paralegals;
- a single National rate, outside of London, for each Grade;
- two rates for London, rather than three, that is an “Inner London” rate and an “Outer London” rate;
All of these recommendations have been rejected.
Grade D of the Guideline Hourly Rate will continue to be the starting point for paralegals until evidence of the market is available.
Lord Dyson stated:-
“I have given very careful consideration to the recommendations for new rates, but regret that I cannot accept them.”
The only amendments that have been accepted by Lord Dyson are as follows:-
- Fellows of CILEX with eight years’ post qualification experience are to be included within Grade A; (This will introduced on 1 October 2014)
- Costs Lawyers who are suitably qualified, and subject to regulation, depending on the complexity of the work are to be eligible for Grade C or Grade B payments; (This will introduced on 1 October 2014)
Lord Dyson concluded by stating:-
“The present situation is deeply unsatisfactory. GHRs are needed to guide summary and detailed assessments of costs…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.
…It is imperative that sound and reliable evidence is obtained.”
But for now; the rates do not change…
The Civil Justice Council Costs Committee has conducting a survey (Guideline Hourly Rates Survey 2013) of solicitors concerning Guideline Hourly Rates and the deadline for completing the questionnaire was Friday 29 November 2013.
Quite separately there is a Call for Evidence (PDF 22.2kb) on the costs of running a litigation practice and written submissions were be made by Friday 6 December 2013.
There is an introduction by Mr Justice Foskett and a letter from him and the questionnaire/survey (Guideline Hourly Rates Survey 2013) together with Frequently Asked Questions ( FAQ: Guidelines for Hourly Rates Survey 2013), including information and guidance concerning Guideline Hourly Rates, prepared by Mr Justice Foskett.
Here is the speech given by Mr Justice Foskett to MASS – The Motor Accidents Solicitors Society – on 25 October 2013 and which deals with Guideline Hourly Rates.
As part of the review the Civil Justice Council’s Costs Committee will consider whether to introduce a further category of fee earner for costs lawyers and costs clerks (their terms).
A recommendation concerning Guideline Hourly Rates will be made by the Civil Justice Committee to the Master of the Rolls by 31 March 2014.
There is more misunderstanding about Guideline Hourly Rates than any other aspect of costs. Here I am not setting out the rates, but rather when they should be used, and more particularly of detailed assessment when they should not be used. Quite simply they have no application at all in relation to anything other than summary assessment, and even in summary assessments they are guidelines and not tramlines, and are not supposed to replace the experience and knowledge of those familiar with the local area and field and the field of law generally (see (1) KMT, (2) Kay, (3) Mey, (4) MJY (Children proceedings by their Litigation Friend the Official Solicitor) v Kent County Council  EWHC 2088 QB.
Similar observations had previously been made in Sarah Cox v MGN Ltd  EWHC 1235 and Choudhury v Kingston Hospital NHS Trust  EWHC 90057 and Various Claimants v TUI UK Ltd  EWHC 90017 (Costs).
In Higgs v Camden and Islington Health Authority  EWHC 15 (QB) the High Court concluded that the guidelines were of limited assistance, a decision followed in KMT and others v Kent County Council above.
His Honour Judge Jeremy Richardson QC, sitting with assessors on an appeal from Kingston Upon Hull County Court, has recently considered the issue of guideline hourly rates.
The court said:
“20. A detailed assessment is not a scientific process, neither is it a process which will produce a necessarily right or wrong answer. A multiplicity of different methods for establishing the appropriate hourly rates has flourished. At the heart of this appeal is the question of the relevance of the guideline rates. The range of possibilities varies from following those rates slavishly to ignoring them altogether. There are clearly many shades in between those two extremely. Whilst they are described a “guidelines” for “summary” rather than details assessment, it is nevertheless commonplace on both summary and detailed assessments for courts to be referred to the guidelines. This is often on the basis that they should be uplifted (on the receiving party’s submission); disregarded entirely (receiving party); or followed (a common submission from a paying party in response to a Bill claiming higher rates than those in the Guidelines). However it is put, it is a matter for the court’s discretion. The seven factors in CPR 44.5(3) will be relevant; but the weight afforded to each factor is a matter for the wide discretion of the costs judge.
- As we shall come to explain the guidelines are an extremely useful tool for detailed assessments, but they are not to assume an enhanced status beyond a useful starting place or cross-reference point. We emphasize at once that a detailed assessment requires the exercise of judgement as we hereafter set out”.
Although technically dismissing the claimant’s appeal the Judge was critical, as many others have been, of the rigid guidelines approach of Regional Costs Judge Ian Besford, who made provocative remarks in his judgment. The court held that he imposed a straitjacket upon himself by the comments that he made and that he did not extricate himself from that straitjacket.
His disregard of expertize, which the court held to be synonymous with skill as a charging factor set out in CPR 44.5(3)(e) was an error of law, described by the court as “significant”, “an error of principle” and “plainly wrong”, (paragraph 43) and compounded by an “overly robust approach to the application of the guideline rates”. (Paragraph 44).
The court rejected the argument that Guideline Hourly Rates have no relevance whatsoever on detailed assessments.
“…….it is not wrong in principle at all, and is entirely appropriate, for the guidelines to be referred to during a detailed assessment and/or for them to be used as a starting point or crosscheck”. (Paragraph 39).
Although this decision contains no new point of law or principle, it contains a useful summary of case law.
It is also timely, given the current consultation on Guideline Hourly Rates and the risk that those rates will indeed be slavishly followed in provisional assessments, where the costs Judge will generally not have the solicitor’s file of papers, as well as of course being deprived of oral submissions.
It is most important to note that Guideline Hourly Rates have no relevance in the new scheme of Provisional Assessment in place since 1 April 2013 in relation to bills where the total costs claimed are £75,000 or less.
Provisional Assessment is a form of Detailed Assessment and is dealt with at new CPR 47.15, itself part of CPR 47 which is entitled “Procedure for Detailed Assessment of Costs and Default Provisions”.
The opening words of CPR 47.15 are:
“(1) This rule applies to any detailed assessment proceedings…”
Clearly Judges may be tempted to utilize Guideline Hourly Rates on a Provisional Assessment and equally clearly that is an appellable error of law.
Consequently it is important to make it clear at the beginning of the bill as to why those rates do not apply. I suggest the following wording:
“This bill is subject to Provisional Assessment under CPR 47.15 and Provisional Assessment is a form of Detailed Assessment under CPR 47: Procedure for Detailed Assessment of Costs and Default Provisions.
Consequently Guideline Hourly Rates are not applicable as they are for use in Summary Assessment proceedings only. The rates utilized in this bill are
I am grateful to Judge Michael Cook for much of the following, which appears in Butterworths Personal Injury Litigation Service.
The Senior Courts Cost Office (SCCO) “Guide to the Summary Assessment of Costs” contains guideline hourly rates for different levels of fee earner in different parts of the country. It is not the fault of the guide that the profession and the judiciary ignore its title and most of its content, and focus entirely on the tables of hourly rates. As the title and the content state, the guide is specifically limited to summary assessments of costs, and is intended to provide a simple collation of hourly rates applicable for routine costs to be assessed summarily at the end of a hearing which has lasted no more than a day. It has nothing to do with detailed assessments.
Increasingly the guide is treated as if it prescribes hourly rates: it does not, it merely collates them. To regard these rates as a substitute for solicitors calculating their own rates is to put the cart before the horse – the figures in the guide are no more than a simple collation of figures that individual firms of solicitors have calculated. The original figures for each locality were arrived at through a framework of local co-ordinators based on civil trial centres set up by the Law Society to assist in the agreement of local rates. The co-ordinators were responsible for liaising with local law societies and district judges, and afterwards with the designated civil judge for each trial centre to ensure consistency across the group. The figures were then communicated to the SCCO for publication on its website and in the guide.
In 2005 the guide ceased to give hourly rates approved for each court. It massaged the rates into three groups for the entire country plus London. As a result the rates are no longer approved by any member of the judiciary, do not refer to any particular court and to that extent have become a bureaucratic and not a judicial exercise.
Advisory Committee on Civil Costs
In 2008, the Ministry of Justice transferred the task of collating hourly rates to an Advisory Committee on Civil Costs under the chairmanship of Professor Stephen Nickell, who wrote to the Master of the Rolls on 9 December 2008 as follows:
‘The Advisory Committee on Civil Costs recommends the attached Table of Guideline Hourly Rates to apply from 1st January, 2009. As you know these guideline rates are broad approximations to be used only as a starting point for judges carrying out summary assessment. These rates are interim in nature in the sense that there remain some unresolved issues which are made clear in the enclosed document entitled “The Derivation of New Guideline Hourly Rates”, from which you will understand that at least one member was pressing for an immediate reduction in rates. The unresolved issues include the extent of work done by solicitors outside the region in which they are located and the extent to which referral fees can account for the gap between the hourly rates charged by claimants’, as opposed to defendants’, solicitors. We hope to have looked at these specific issues by 2010.
Our new interim Guideline Hourly Rates are based on data collected in a survey of solicitors and other interested parties as well as both written and oral evidence provided by representatives of the main interest groups and others. The information collected refers to the calendar year 2007 and, as last year, we have used the rise in the Office of National Statistics Average Earnings Index (AEI) for Private Sector Service industries, excluding bonuses, seasonally adjusted, from 2006 Q3 to 2008 Q3 to uprate the 2007 numbers.
I should emphasise that the Committee sees this as unfinished business and that when the outstanding issues have been resolved, we shall revisit the question.’
The committee was concerned that the figures were skewed because an increasing number of firms have offices both in London and the provinces and by the payment of referral fees.
The Master of the Rolls accepted the recommendation of the Advisory Committee that the guideline hourly rates for Summary Assessment should be increased in line with inflation by 1.7% with effect from 1 April 2010. The rates for London 3, Bands A and B are presented as ranges which are said to go some way towards reflecting the wide range of work types transacted in these areas.
Using the guide
The following extracts from the SCCO Guide to the Summary Assessment of Costs are important to its application:
- The guide is specifically limited to summary assessments of costs and is intended to provide a simple collation of hourly rates incorporating a 50% profit mark-up appropriate for routine costs to be assessed summarily at the end of a hearing which has lasted no more than a day. It has nothing to do with detailed assessments.
- The rates, in the words of the guide, ‘are broad approximations only’. They are not prescribed by the SCCO. They are not a scale. They may be amended locally at any time by the Designated Civil Judge. They are not carved in stone.
- The guideline figures have been grouped according to locality by way of general guidance only. Although many firms may be comparable with others in the same locality, some of them will not be. For example, a firm located in the City of London which specialises in fast track personal injury claims may not be comparable with other firms in that locality and vice versa.
- In any particular case the hourly rate it is reasonable to allow should be determined by reference to the rates charged by comparable firms. For this purpose the costs estimate supplied by the paying party may be of assistance. The rate to allow should not be determined by reference to locality or postcode alone.
- An hourly rate in excess of the guideline figures may be appropriate for Band A fee earners in substantial and complex litigation where other factors, including the value of the litigation, the level of complexity, the urgency or importance of the matter as well as any international element, would justify a significantly higher rate to reflect higher average costs.
- The guideline rates for solicitors provided here are broad approximations only. In any particular area the Designated Civil Judge may supply more exact guidelines for rates in that area. Also, the costs estimate provided by the paying party may give further guidance if the solicitors for both parties are based in the same locality.
In (1) Brown-Quinn (2) Webster Dixon LLP and Others v (1) Equity Syndicate Management Ltd (2) Motorplus Ltd  EWCA Civ 1633 the Court of Appeal said that the Guideline Rates for Summary Assessment were of no use or relevance in relation to the hourly rates to be paid by before-the event insurers to non-panel solicitors.
I am grateful to Jon Williams of Williams Associates for bringing the Kingston upon Hull County Court decision to my attention.
Master Rowley allowed the following recoverable hourly rates in a heavyweight clinical negligence case:-
Grade A – £375.00
Grade B –
Grade C – £250.00
Grade D – £130.00
There was no grade B fee earner work post 2009 but prior to that Master Rowley allowed £270.00 per hour.