I’ve been in this town so long that back in the city
I’ve been taken for lost and gone
And unknown for a long long time
Fell in love years ago
With an innocent girl
From the Spanish and Indian home
Home of the heroes and villains
-The Beach Boys
Summer’s lease has a very short term. Now that September has arrived, one’s thoughts inexorably turn towards autumn and the slow stately progression of days via Halloween and Guy Fawkes, to Christmas time, as the year dies. For me, September has always marked the beginning of the year, and not the beginning of the end: although Michaelmas Term begins this year on 1st October, I hark back to September marking the start of the academic year, in a flurry of new shoes, uniforms, pencil cases and lunch boxes.
At the end of July, with a nod to one of the oldest and corniest tricks employed by the Civil Service, just before the holiday season commenced and people departed (in sofar as they could) for their summer holidays, the Civil Justice Council published its final report on guideline hourly rates. A copy of the report can be found here: Civil-Justice-Council-final-report-on-guideline-hourly-rates.
On 17th August 2021, Sir Geoffrey Vos, Master of the Rolls accepted the report’s recommendations, which come into force officially on 1st October 2021. He stated:
“I am grateful to the CJC, Mr Justice Stewart, and his entire working group for this report.
The published guideline rates have been static for too long and this needed to be addressed. I am satisfied with the evidence and arguments set out by the working group. I plan to implement all the recommended changes from Friday 1 October 2021 and to that effect I have asked my Officials and Master Gordon-Saker, Senior Costs Judge, to take forward the publication of the revised guide to summary assessment.
I am grateful to those who have taken the time to write to me about this work, particularly those who have raised concerns during the consultation process in respect of likely changes to working practices following the pandemic. Whilst I think there is likely to be merit in their concerns, I do not think that this should delay the necessary update of what is ultimately an advisory guide. I have, however, agreed with the Civil Justice Council that there will be a further review of guideline hourly rates reporting within 2 years.”
The results of the review can now be found in a new edition of the Guide to the Summary Assessment of Costs which can be found here: Guide-to-the-summary-assessment-of-costs-2021. Interestingly the foreword to the publication echoes the comment in the press release:
I am acutely conscious that questions have again been raised about the Guide itself and the methods and analysis that go into its production. In response, I would emphasise that the Guide is, as it has always been, no more than a guide and a starting point for judges carrying out summary assessment. This Guide is no different to its predecessors in that it continues to offer assistance to Judges. In every case, a proper exercise of judicial discretion has still to be made, after argument on the issues has been heard.
Many people will be aware of the context of the report: guideline hourly rates having been set in 2010, they remained set in stone for the following decade, becoming more and more irrelevant, as the years past and inflation took its toll and working practices changed.
An attempt to revise the hourly rates in 2014 (the Foskett review) floundered, and the issue was placed in the tray marked “too difficult” where it remained for a number of years. It is interesting that the Master of the Rolls decided to move forward decisively now, grasping a nettle that others suggested should be left ungrasped and pending other events:
Many paying parties and their representatives submitted that the review should have been conducted in the wider context of Sir Rupert Jackson’s civil justice reforms, that it should have awaited changes in (a) Fixed Recoverable Costs. (b) the HMCTS reform programme, (c) changes in business models and (d) the effect of home working. A number submitted that location of fee earner should be irrelevant and geographical areas abolished. These suggestions could not at this point in time be properly assessed and taken into account by the working group, which repeats what was said in the Interim Report, namely:
“A further review by a working group should be considered once the need is considered by the CJC to have arisen. This may well be within, say, 3 years, though it is difficult to predict, especially given the impact of the Covid-19 pandemic and the HMCTS reform programme. That would be the appropriate occasion to examine the methodology, how effective this working group’s work has been, and any appropriate, evidence-based amendments to geographical areas.”
One can imagine that the Working Group was not immune to perceived sectoral interests when considering the representations made to it:
2.7. It would not be unfair to summarise the responses from receiving and paying parties by saying that the former argued that the proposed GHRs were insufficient and that more specialisations should be recognised as warranting separate and higher GHRs; the latter that they were based on totally flawed methodology and that no increase
was warranted or, indeed, that the present GHRs were too high. Having rehearsed and responded to the main criticisms of the methodology in the Interim Report, and taking into account all the responses, including the many which supported it, the working group has concluded that, though capable of some valid criticism, it is the best available in all the circumstances and is a sufficiently sound basis on which to make recommendations.
Moreover, there was a readily discernible desire to cut the Gordian knot:
3.74. In conclusion, on the overall question of methodology, the working group considers that there is wisdom in the area of GHRs in the aphorism that: “He who seeks perfection will never be content.”
Moving onto the new guide it is worth noting that it contains the following commentary and/or advice to the assessing judge:
27. Guideline figures for solicitors’ charges are published in Appendix 2 to this Guide, which also contains some explanatory notes. The guideline rates are not scale figures: they are broad approximations only.
28. The guideline figures are intended to provide a starting point for those faced with summary assessment.
29. In substantial and complex litigation an hourly rate in excess of the guideline figures may be appropriate for grade A, B and C fee earners where other factors, for example the value of the litigation, the level of the complexity, the urgency or importance of the matter, as well as any international element, would justify a significantly higher rate. It is important to note (a) that these are only examples and (b) they are not restricted to high level commercial work, but may apply, for example, to large and complex personal injury work. Further, London 1 is defined in Appendix 2 as ‘very heavy commercial and corporate work by centrally based London firms’. Within that pool of work there will be degrees of complexity and this paragraph will still be relevant.
It also has this to say about London:
30. In a case which has no obvious connection with London and which does not require expertise only to be found there, a litigant who unreasonably instructs London solicitors should be allowed only the costs that would have been recoverable for work done in the location where the work should have been done: Wraith v Sheffield Forgemasters Ltd  1 WLR 132 (CA). It follows that a party who instructs London solicitors to pursue in London a claim which concerns a dispute arising outside London and which was suitable to be heard in the appropriate regional specialist court should also be allowed only the costs that would have been recoverable for pursuing the claim in that regional court (and see Practice Direction 29 para 2.6A).
31. Where all or part of the work on a case is done in a different location from that of the solicitor’s office on the court record, the appropriate hourly rate for that part should reflect the rates allowed for work in that location, whether that rate is lower or higher (provided that, if a higher rate is claimed, a decision to instruct solicitors in that location would have been reasonable).
The headline figures are as follows:
Many High Court cases justify fee earners at a senior level. However the same may not be true of attendance at pre-trial hearings with counsel. The task of sitting behind counsel should be delegated to a more junior fee earner in all but the most important pre-trial hearings. The fact that the receiving party insisted upon the senior’s attendance, or the fact that the fee earner is a sole practitioner who has no juniors to delegate to, should not be the determinative factors. As with hourly rates the statement of costs supplied by the paying party may be of assistance. What grade of fee earner did they use?
As stated in paragraph 29 of the Guide:
In substantial and complex litigation an hourly rate in excess of the guideline figures may be appropriate for grade A, B and C fee earners where other factors, for example the value of the litigation, the level of the complexity, the urgency or importance of the matter, as well as any international element, would justify a significantly higher rate. It is important to note (a) that these are only examples and (b) they are not restricted to high level commercial work, but may apply, for example, to large and complex personal injury work. Further, London 1 is defined in Appendix 2 as ‘very heavy commercial and corporate work by centrally based London firms’. Within that pool of work there will be degrees of complexity and this paragraph will still be relevant.
|Fee earner||London 1||London 2||London 3||National 1||National 2|
|A||Solicitors and legal executives with over 8 years experience||£512||£373||£282||£261||£255|
|B||Solicitors and legal executives with over 4 years experience||£348||£289||£232||£218||£218|
|C||Other solicitors or legal executives and fee earners of equivalent experience.||£270||£244||£185||
|D||Trainee solicitors, paralegals and other fee earners||£186||£139||£129||£126||£126|
London 1 is very heavy commercial and corporate work by centrally based London firms, not restricted to any particular London postcode.
London 2 is City and Central London-other work including EC1-EC4, W1, WC1, WC2 and SW1.
London 3 is Outer London: all other London boroughs plus Dartford and Gravesend.
i. The counties of Bedfordshire, Berkshire, Buckinghamshire, Dorset, Essex,
Hampshire (& Isle of Wight), Kent, Middlesex, Oxfordshire, East Sussex, West
Sussex, Suffolk, Surrey and Wiltshire
ii. Birkenhead, Birmingham Inner, Bristol, Cambridge City, Cardiff Inner, Leeds
Inner (within 2km of City Art Gallery), Liverpool, Manchester Central, Newcastle
City Centre (within 2m of St Nicholas Cathedral), Norwich City, Nottingham City
All places not included in London 1-3 and National 1.
Of course, history is an oncoming tide.
Already the significance of hourly rates is set to diminish for a tranche of litigation.
The government has now published its response to the Fixed Recoverable Costs consultation and indicated that it will move to a massive expansion of fixed costs across the board: that document can be found here: extending-fixed-recoverable-costs-civil-cases-government-response and due to it’s importance will merit some further posts in due course.