The CJC working party on Guideline Hourly Rates (“GHR”) have prepared a draft report which is open for public consultation between 8 January and 31 March 2021.
Since the introduction of the CPR, Judges at all levels were required to assess costs summarily at the end of a trial on the fast track or at the conclusion of any other hearing which has lasted not more than one day. This requirement led to an immediate request from Judges for some guidance as to how to go about summary assessment and the hourly rates to apply.
This led to the formulation and publication of a comprehensive guide in 2002, the rates being based upon local rates derived from local Law Society expense of time surveys. The rates were increased for inflation up to the last published guide in 2010.
The guideline figures are not intended to replace figures used by those with accurate local knowledge. They are intended to provide a starting point for those faced with summary assessment who do not have that local knowledge.
The Committee have reported that a set of rates on actual data remains impossible as it was when last looked at by Lord Justice Dyson in July 2014. However despite this they have gone on to propose revised rates and emphasis that these are no more than guideline rates and a starting point. Furthermore the overriding need to review the end figure for proportionality remains, regardless of the rates applied.
A comparison of the 2010 and proposed 2021 GHR is set out in the table below:
| 2010 | 2021 (including % rise) | ||||||
Location | Grade A | Grade B | Grade C | Grade D | Grade A | Grade B | Grade C | Grade D |
London 1 | £409 | £296 | £226 | £138 | £512 (25.2%) | £348 (17.6%) | £270 (19.5%) | £186 (34.8%) |
London 2 | £317 | £242 | £196 | £126 | £373 (17.8%) | £289 (19.5%) | £244 (25%) | £139 (10.4%) |
London 3 | £248 | £200 | £165 | £121 | £282 (13.7%) | £232 (15.8%) | £185 (11.9%) | £129 (7%) |
National 1 | £217 | £192 | £161 | £118 | £261 (20.2%) | £218 (13.5%) | £178 (10.7%) | £126 (6.8%) |
National 2 | £201 | £177 | £146 | £111 | £255 (26.78%) | £218 (23.2%) | £177 (21.3%) | £126 (13.5%) |
Subject to the outcome of the consultation, it is recommended that these rates apply from 1 January 2021.
The proposed hourly rates were recommend following a review of data for the period 1st April 2019 to 27th November 2020 covering:
(Less than 1% of cases proceed to detailed assessment, and those that settle do so on a lump sum basis so that the applicable hourly rate is never reduced to a figure. The fact that on average we secure a reduction of almost 30% across our portfolio of cases demonstrates that the hourly rates claimed are often inflated so as to build in a negotiation cushion from which to work)
Before finalising the report the CJC has issued a consultation seeking comments on the following:
Responses to the consultation should be sent no later than 31 March 2021 via the online form.
Prior to the review, Keoghs raised significant concerns with the working party as to the data being sought as we considered it risked producing fundamentally flawed recommendations as to hourly rates. Those concerns have not been addressed, largely as a result of the decision not to pursue more meaningful, and current, relevant data.
Furthermore the new GHR and Guide to Summary assessment risks “double counting” of the factors that affect the hourly rate allowed between the parties because the data informing the proposed GHR comes from the hourly rates on multi track cases that have proceeded to provisional and detailed assessment. The hourly rates claimed and allowed in these cases take into account the following:
The proposed GHR already thus “bake in” an amount for these factors.
Paragraph 3.23 of the draft report asks Judges who assess costs to have due regard to the proposed revised paragraph 29 of the Guide to the Summary Assessment which states:
“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 follows that duplication may arise where the Court allows a materially higher rate than the proposed guideline rate.
An important side effect of this change will be a rise in Court of Protection cost claims now that they can adopt the GHRs as their starting point too. We could see an immediate 20-25% increase in this head of loss. The need for a forensic approach to the grade of work involved and the local market for the work will be critical.
Keoghs will be preparing a response to the consultation following discussions with all its clients. Links to the draft report and consultation are below:
https://www.judiciary.uk/related-offices-and-bodies/advisory-bodies/cjc/
For further information or to discuss the topic above, please contact Howard Dean or Andrew Underwood.
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