New Solicitors’ Guideline Hourly Rates Proposed, as CJC Publishes Consultation

In our ‘Horizon Scan’ of the disease market for 2021 (here), we forecasted that it would not be long before we reported on the recommendations of the Civil Justice Council’s (CJC) Guideline Hourly Rates Working Group, in the wake of a review that was first unveiled in 2020.

Mrs. Justice O’Farrell, in the case of Ohpen Operations UK Ltd v Invesco Fund Managers Ltd [2019] EWHC 2504 (TCC), labelled existing guidelines ‘unsatisfactory’ and pressure was mounting for reform on rates last established in 2010 and last reviewed in 2014.

Sure enough, just a matter of days ago, the CJC published its consultation, which is accessible here.

In short, it appears that all grades of fee earner are on-track for an increase in hourly rates. Thereafter, rates would be updated annually, in line with an appropriate Service Producer Price Index (SPPI), with a more comprehensive review taking place in around 3-years’ time.

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The Working Group expressed its confidence in Judges having ‘proper regard’ to the new GHR when assessing costs, but went on to caveat that Judges will also ‘appreciate that they have been and always will be no more than a guide’.

Moving forwards, regional and county bands are due to be introduced in such a way that no areas are omitted. As it stands, under the present system, large parts of the country are not allocated to a band.

Given that National Bands 2 and 3 have identical GHR and would remain so moving forwards, it is tabled that the latter should disappear and be merged into the former, while the prospect of merging National Bands 1 and 2 was mooted, but ultimately rejected on balance. What is more, London Bands 1 and 2 have been redefined, with the former potentially being restricted to ‘very heavy commercial and corporate work by centrally based London firms’ and the latter absorbing, for example, personal injury work which would no longer apply to the former.

Compounding these band-related adjustments, certification of geographical fee earner location could be required. For instance, to obtain London GHR, one would have to actually conduct business in London. In the midst of the COVID-19 pandemic, with widespread remote working procedures in place, this could prompt some interesting discussion.

The Council is calling for stakeholder responses to the consultation and these must be submitted by 4pm on 31 March 2021.

In particular, responses are sought on the following matters:

  1. The methodology used by the working group, i.e. based on rates ‘allowed on provisional and detailed assessment’ by Regional Costs Judges and Senior Courts Costs Officers.
  2. The recommended changes to areas London 1 and London 2.
  3. The recommended GHR (set out in the table above).
  4. Specifically, whether the rate of £186 for London 1 Grade D is too high; if so, at what rate should it be set and why?
  5. The recommended changes to the geographical areas and the recommendation to have 2 National Bands.
  6. Whether the working group should recommend that the Civil Procedure Rule Committee be requested to consider amending the summary assessment form N260 and the information provided on the detailed assessment bill – the amendment would be to require the signatory to specify the location of the fee earners carrying out the work.
  7. The recommended revisions to the text of the Guide in Appendix J, on summary assessment of costs.

To complete the online response form, click here.