Guideline Hourly Rates Subjected to 35% Inflation-Related Uplift ‘as a Starting Point’: Cohen v Fine & Ors [2020] EWHC 3278 (Ch)

A common theme in recent editions of BC Disease News has been the ongoing review of Solicitors’ Guideline Hourly Rates (GHR), which are currently based on figures that were fixed in 2010 and most recently reviewed in 2014.

Our articles have covered decisions in Ohpen Operations UK Ltd v Invesco Fund Managers Ltd [2019] EWHC 2504 (TCC) and PLK & Ors (Court of Protection:Costs) [2020] EWHC B28 (Costs), both of which emphasised the growing need for present day rates that are reasonable, equitable and satisfactory.

Most recently, in edition 316 (here), we reported that swathes of litigators had been inspired by the landmark ruling in PLK, wherein Costs Master Whalan (who was not personally empowered to review or amend GHR) inflated costs by 20% above current GHR, to request similar outcomes ‘across the board’ (i.e. not restricted to Court of Protection actions) – an ‘unprecedented step’ became spill-over litigation.

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It is ‘optimistically’ hoped that the Civil Justice Council’s (CJC) GHR Working Group will publish new recommendations by the end of 2020, though this informal timeline is largely predicated on the level of legal professional engagement with the Group, which has been in short supply.

However, an end to the debate on legal professionals’ fees may not in fact be in sight, as the Ohpen case has now been used, not only to question the appropriateness of solicitors’ GHR, but also the Table of Counsel's Fees.

This unfolded in the case of Cohen v Fine & Ors [2020] EWHC 3278 (Ch), with His Honour Judge Hodge QC (who incidentally sat on the CJC’s Foskett Sub-Committee during the 2014 rate review) stating as follows:

In my experience of sitting in the Business & Property Courts, both in the North-west and in the Rolls Building, the present Guideline Hourly Rates are considerably below the rates actually being charged by the solicitors who practise in those courts. Likewise, the Table of Counsel's Fees bears no relationship to the fees which the courts see being charged for counsel appearing in the Business & Property Courts. In my judgment, pending the outcome of the present review, the Guideline Hourly Rates should be the subject of, at least, an increase that takes due account of inflation. Using the Bank of England Inflation Calculator, it seems to me that an increase in the (Band One) figures for Manchester and Liverpool broadly in the order of 35% would be justified as a starting point (appropriately rounded-up for ease of calculation).

At first instance, DJ Matharu summarily assessed costs in the sum of £27,000 (inclusive of VAT, counsel's fees and disbursements).

On appeal, however, HHJ Hodge QC set aside the existing order and conducted a line-by-line re-assessment of the claimant’s costs bill. Accounting for the impact of inflation on GHR, he calculated costs in the total sum of £35,703.

Full text judgment can be accessed here.

As 2020 draws to a close, we will be paying close attention to the CJC’s press office for any new developments on this enduring issue.