The Civil Justice Council’s guideline hourly rates (GHR) interim report, published for consultation in January, showed how it struggled to obtain evidence from lawyers.
We should not forget that in 2015, the then Master of the Rolls, Lord Dyson, froze the GHRs at their 2010 levels indefinitely after deciding there was no prospect of the evidence required to change them being produced, despite recommendations in a report produced by a similar working group headed by Mr Justice Foskett. A repeat when the final report goes in the summer to the newly installed Master of the Rolls, Sir Geoffrey Vos, would be a disaster.
The 2020 group was chaired by Mr Justice Stewart and had members from across the judiciary and profession, including the Association of Costs Lawyers (ACL).
The headline from the CJC working group report is that there should be what it described as “modest” increases – ranging from 7% to 35% depending on the band and grade (see table).
It recorded that inflation since 2010 was 13% using the service producer price index (SPPI) for all services, 17% on the SPPI for professional services, 34% on the SPPI for legal services, and 24% using the consumer price index. You might well think the SPPI for legal services is the one to use. It is certainly in line with HHJ Hodge (who consulted the Bank of England inflation calculator), although Master Whalan went for the consumer prices index.
The working group sat on the fence: “If the GHRs produced in this report are accepted as being soundly based, then in the short term they could be updated annually in line with an appropriate SPPI index.” Ideally, it added, they should be properly reviewed on a very regular basis, but recognised this was currently impractical.
The other recommendations mainly affected London. It proposed changing the London 1 and London 2 rates to reflect the work done, rather than postcode, reflecting the “vast range of work of varying complexity and size” carried out by City law firms. Thus London 1 would primarily be for very heavy commercial and corporate work and London 2 for all other work.
It recognised that there were anomalies in the present boundaries for London 2 and London 3 and said, pending a wider review discussed below, “costs judges will no doubt continue to take into account the nature, complexity and location of the work when assessing complex high-value work carried out by firms which are based in areas of central London but are located in London 3”.
The group recommended merging National bands 2 and 3 into a single band – the rates are currently the same and it did not propose changing this – and in future there may be a single national rate.
There was only one area of specific disagreement on the proposed rates.
Foskett recommended that that suitably qualified Costs Lawyers should be eligible for grades B and C, while Fellows of the Chartered Institute of Legal Executives with eight-plus years’ PQE should have parity with solicitors of equivalent experience. Lord Dyson accepted both recommendations but, because of his overall decision, they were not implemented. The working group said it did not revisit them, “given that they were the subject of detailed consideration in 2014”. We strongly believe that they should now be introduced. Costs Lawyers more than prove their worth and as properly trained and regulated professionals should be equated with more senior practitioners.
One other point to note. The working group said the rates for counsel in the White Book were “hopelessly out of date”. Its terms of reference did not include evidence gathering on such rates, which would in any case be a very difficult task. It was “unanimously” of the view that these rates were unhelpful and should be deleted from the Guide to the summary assessment of costs.
The working group was not wrong when it described its recommendations as modest and the profession has until 31 March to respond to the consultation and make the case for something more radical. What was clearly holding it back, however, was a belief that a deeper review would soon be required.
This is not necessarily wrong, but history shows us that reviews of costs in civil litigation – outside of personal injury, at least – do not happen quickly. That’s why responding to the consultation now is so important and the ACL is convening a working party to do just that.
This article, written by Claire Green, Chair of the ACL, appeared in the Sollicitors Journal on 20 March 2021