2020 Guideline Hourly Rates

The problem with the 2020 Guideline Hourly Rates is that there aren’t any.  Because nature abhors a vacuum, the judiciary has been taking steps to fill the void.

In PLK & Ors (Court of Protection : Costs) [2020] EWHC B28 (Costs), Master Whalan gave guidance as to the appropriate hourly rate for Deputies in Court of Protection matters.  Pending the outcome of the ongoing formal review into Guideline Hourly Rates, he concluded that Costs Officers in the SCCO should allow uplifts to GHRs of approximately 20%:

“I am satisfied that in 2020 the GHR cannot be applied reasonably or equitably without some form of monetary uplift that recognises the erosive effect of inflation and, no doubt, other commercial pressures since the last formal review in 2010.  I am conscious equally of the fact that I have no power to review or amend the GHR.  Accordingly my finding and, in turn, my direction to Costs Officers conducting COP assessments is that they should exercise some broad, pragmatic flexibility when applying the 2010 GHR to the hourly rates claimed.  If the hourly rates claimed fall within approximately 120% of the 2010 GHR, then they should be regarded as being prima facie reasonable.  Rates claimed above this level will be correspondingly unreasonable. To assist with the practical conduct of COP assessments, I produce a table below which demonstrates the effect of a 20% uplift of the 2010 GHR.  I stress again that I do not purport to revise the GHR, as this court has no power to do so; instead this is a practical attempt to assist Costs Officers and avoid unnecessary delay”

Now, in the case of Cohen v Fine & Ors [2020] EWHC 3278 (Ch) a High Court judge has suggested that GHRs should be uplifted by 35%:

“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). That would produce figures as follows (with the present rates shown in brackets):

A 295 (217) B 260 (192) C 220 (161) D 160 (118)”

To the extent to which the judge was intending this decision to set down some wider guidance beyond the facts of the case, it is unfortunate that the paying parties were not legal represented at either the original hearing or on appeal.  There is nothing within the judgment to indicate that the paying parties, at any stage, made any submissions of any kind as to what, if any, principles should be applied when considering a departure from GHRs.

It should also be noted that this was an assessment that was being conducted on the indemnity basis.  It is therefore arguable that any assessment on the standard basis would justify a different approach.

More generally, the decision appears to have been reached based on the judge’s own personal experience of what solicitors in the North-West are charging for work proceeding in the Business & Property Courts.  Any matters proceeding in other courts, in other parts of the country, will be immediately distinguishable.

A further important point has been highlighted by Andrew Hogan in his costs blog:

“It will be observed that he has used the Bank of England calculator … but that index is not free from controversy.  It will be remembered that in the matter of PLK & Ors (Court of Protection : Costs) that Master Whalan rejected the use of RPI for these reasons:

1. 33. The Brown Shipley & Co. report entitled ‘SCCO Guideline Rates and the Impact of Inflation’ and dated October 2019 demonstrates an RPI inflation rate increase of 31% between 2010 and the end of 2018. The hourly rates claimed in the bills drafted by Clarion and considered in this assessment all apply RPI inflation to the 2010 GHR. Indeed, this is the only basis upon which the hourly rates are argued in the PLK, Thakur, Chapman and Tate bills. Mr Wilcock submits, as a secondary alternative to his primary argument, that the court ‘is invited to apply RPI inflation to the GHR and allow the rates as claimed’ (SA, paragraph 49).  But the problem with this approach (at least in empirical terms) is that most official indexes of the impact of inflation prefer the CPI to the RPI rate.  The official rate of UK inflation has used the CPI since 2004.  Dr Friston, as Mr Wilcock acknowledges, uses CPI inflation in his table(s) at 68.3 to 68.10 in the third edition of Friston on Costs.  CPI inflation from 2010 to 2019 is approximately 21%.”

This decision may not be followed as closely as some would wish.