Costs News

06 April 2021
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Costs Lawyers Query Hourly Rates Review

Costs lawyers have raised issues with the data used to inform the review of Guideline Hourly Rates (GHR), the guideline figures used by judges to calculate court costs

In January, a Civil Justice Council (CJC) working party proposed changes to the GHR, categorising lawyers into different grades and suggesting hourly rates accordingly.

Responding to the consultation, which closed on 31 March, the Association of Costs Lawyers (ACL) said it was concerned about the CJC’s approach of basing the proposed figures on the small number of cases which have reached detailed assessment.

This risked the GHR merely reflecting what judges awarded on assessment rather than informing courts of the ‘broad costs of litigation’―which was their original intention. According to the ACL, an obvious solution would have been to use data already lodged with the court in costs budgets.

The ACL response said: ‘This will be a more accurate approximation of the actual rates in the wider market which are being charged to litigants.

‘The harvesting and processing of this data would not be too onerous of a task. The courts already review thousands of budgets and the data which could be procured would provide the basis of a more wide-ranging evidence-based review without requiring significant extra resources.’

Otherwise, the ACL warned, the CJC review could be ‘a wasted opportunity’.

The ACL questioned the CJC’s approach of reducing the rest of the country to just two bands when London has three.

‘ACL naturally appreciates the pre-eminent position London has within the legal market,’ it said.

‘It would agree that London itself has a diverse legal market that warrants appropriate triple banding for guideline rates. This does not take away however the need for the guideline rates and bands to account for the diversity in the legal markets of say Shrewsbury and Sheffield, or Hereford and Hull. Under the current proposals there seems to be none.’

The ACL also called for the right for costs lawyers to seek grade A rates for the most complex work they handle, emphasising that costs law has grown in complexity.

‘Many of our peers achieve the status of partner in top 100 law firms, clearly demonstrating exceptional competence,’ the ACL response said.

‘On this basis ACL struggles to comprehend the arbitrary cut-off point that qualified costs lawyers can only ever recover a grade B rate, regardless of the complexity of the work. ACL is firmly of the belief that an appropriate rate should be recoverable for appropriate work, that being a grade A rate for the most complex work.

‘The principles which are applied to other regulated legal professionals when determining recoverable rates should be applied to Costs Lawyers.’

ACL vice-chair Francis Kendall said: ‘The CJC review was much needed but the limited evidence base it uses means it may not deliver what both clients and the profession needs―a balance between access to justice and proper remuneration for the work done.

‘As the working group recognises, there are also underlying issues that mean this is just a sticking plaster anyway. The marketplace has been subject to continual and significant changes over the past decade, including the introduction of fixed costs, budgeting and more recently the move to home working.

‘These developments raise fundamental questions about how best hourly rates can evolve to meet these changes.’

This article appeared in the New Law Journal on 1 April 2021

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