ACL backs move to change way guideline hourly rates are set

The Association of Costs Lawyers (ACL) has welcomed news that the guideline hourly rates (GHR) are to be reviewed and also backed a call to revert to the old system of setting them locally.

It has emerged that, with the agreement of the Master of the Rolls, a sub-committee of the Civil Justice Council (CJC) has been established to review the rates. It will report directly to Lord Justice Coulson, the deputy head of civil justice.

According to the newly published minutes of March’s Civil Procedure Rule Committee meeting, “given that there have not been any material changes to the rates for quite some time, the aim is that this new sub-committee will make recommendations by the end of the year, so that the rates can be updated”.

The GHR have not been changed since 2010 despite solicitors’ rising costs, and the issue of updating them became live because last year after Mrs Justice O’Farrell said in Ohpen Operations UK Ltd v Invesco Fund Managers Ltd [2019] EWHC 2504 (TCC) that the current levels were “not helpful” when deciding what reasonable rates should be in 2019.

A survey of ACL members in the wake of the decision found that 60% of Costs Lawyers said a review was urgent, agreeing that the current GHR were doing more harm than good.

In 2015, the then Master of the Rolls, Lord Dyson, froze the guideline rates at their 2010 levels indefinitely after deciding there was no prospect of the evidence required to change them being produced.

Last December, the rule committee’s costs sub-committee recommended a different approach to collecting the evidence this time.

Its recently released report said that, though the aim of the GHR was to provide “broad approximations of actual rates in the market”, the investigation by the CJC’s then costs committee that informed Lord Dyson’s decision focused too much on establishing the actual rates to a high degree of accuracy. This was a more rigorous examination than Lord Justice Jackson recommended in his final report on costs in 2010.

The sub-committee’s report said: “It is hoped any review that ought now to take place ensures that it bears more firmly in mind the need to produce broad approximations of actual rates, rather than anything more accurate than that.

“Consideration might equally be given to revert to an approach closer to that which was originally taken to devising the guidelines. Originally, pre-Woolf, the guidelines were set locally. They were arrived at following discussions between the judiciary and local solicitors, and then set by the judiciary in the area.

“A similar approach could be taken now, with the rates being set for Circuits and for London. The guidelines could be based on recommendations by regional costs judges based on, for instance, their experience of costs budgets, with input from local law societies and CILEx.”

The sub-committee said the CJC could then review the results before submitting recommendations. “Such an approach could well ensure that sufficient data was gathered, thus overcoming a problem that hamstrung the costs committee in 2014.”

The report concluded by noting how Lord Justice Jackson accepted that the GHR were a “critical element” in the civil justice system. It said: “It is beyond time, as O’Farrell J highlighted, for that critical element to be put back on a proper footing.”

ACL chair Claire Green says: “It is pleasing that the Master of the Rolls and the sub-committee have recognised the urgency of reviewing the GHR. Especially given the current Covid-19 crisis, it is more important than ever that lawyers are paid a proper, economic rate for their work that reflects the costs they have to carry.

“It goes without saying that this is a very difficult time with many competing priorities, but cash flow is particularly vital for many firms at the moment. A change in the GHR – not gratuitous, but still based on evidence – would be widely welcomed.”

ENDS

For further information, please contact: Kerry Jack, Black Letter Communications

Tel: 020 3567 1208, kerry.jack@blackletterpr.co.uk

Notes to editors:

Association of Costs Lawyers

The Association of Costs Lawyers (ACL) is a membership body representing and promoting the status and interests of Cost Lawyers in England and Wales. Founded in 1977, the Association was granted authorised body status in 2007 and is a front-line regulator, able to authorise its members to undertake the reserved legal activities of litigation and advocacy. In recognition of this new-found status, ACL changed its name from the Association of Law Costs Draftsmen in 2011. Costs Lawyers are regulated by the Costs Lawyer Standards Board. www.costslawyer.co.uk

The term ‘costs draftsman’ denotes an unregulated and unqualified person operating in costs and those who instruct costs draftsmen have no recourse to either the Legal Ombudsman or the Costs Lawyer Standards Board.

Exclusive Access

Members only article

This article is exclusively for ACL members. Please log in to proceed, or click the button below to fill out an application from and become a part of our professional community.

Post details

Post type
Costs News
Published date
23 Apr 2020

Fill this form out to be notified when booking goes live.

Your Full Name
Hidden
This field is for validation purposes and should be left unchanged.