Legal Cost Specialists

Posts by Simon Gibbs

25% uplift to Guideline Hourly Rates to reflect inflation

By on Feb 10, 2021 | 0 comments

The decision of His Honour Judge Mark Pelling QC in ABS Company Ltd v Pantaenius UK Ltd & Ors [2020] EWHC 3720 (Comm) has already generated a certain amount of interest in relation to his comments as to the appropriate hourly rates to allow in a summary assessment. The underlying claim proceeded in the shorter trial scheme and concerned the costs of repairing a yacht under an insurance policy.  The claim settled for €244,000. The comment which has generated interest is: “There are at least two points which need to be made in relation to grade rates under the guideline rate scheme. First of all, the rates are significant out of date. They were fixed in 2010 and they, therefore, reflect the position as it was in 2010, not as it was in 2020. … The conventional approach in relation to guideline rates is to uplift them by about 25 per cent in order to reflect the effects of inflation on the figures previously arrived at.” It is difficult to know exactly what to make of this, although receiving parties will no doubt seek to rely on it. If this is the conventional approach, when did it develop?  Presumably not in 2011.  Did it only develop in 2020 and, if so, what was it before? What does “conventional approach” mean?  Was the judge taking judicial notice that this is what judges up and down the country, whether County Court, High Court, Senior Courts Costs Office, Admiralty Court, etc, all routinely apply?  If so, the lengthy Civil Justice Council working group report on amending Guideline Hourly Rates, now out for consultation, could have been significantly shorter.  As it is, the Civil Justice Council working group certainly did not suggest that this was their research revealed into what is allowed on assessment. The fact that this decision has been reported as “Legal News” suggests that these comments do not simply reflect what we all already knew judges to be doing. As it was, this case was proceeding in the Business and Property Court.  Perhaps the comment was intended to simply reflect the judge’s experience of what was typically allowed in that court.  However, this then raises the question as to what...

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Requirement to serve costs estimate

By on Feb 1, 2021 | 0 comments

PD 28 para.6.1(4) reads: “Attention is drawn to the Costs Practice Direction, Section 6, which requires a costs estimate to be filed and served at the same time as the pre-trial check list is filed.” Naturally, it is therefore sensible to refer to the Costs Practice Direction to see exactly what it has to say on the subject of costs estimates. Unfortunately, the Costs Practice Direction ceased to exist in 2013 when the Jackson costs reforms were introduced. The closest equivalent to Section 6 of the Costs Practice Direction is now found at PD 44 paras.3.1 to 3.7.  However, that deals with formal costs budgets rather than the earlier requirements relating to costs estimates. I wonder how many more years will pass before the CPR is updated to remove erroneous references to the Costs Practice...

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2020 Guideline Hourly Rates

By on Dec 9, 2020 | 1 comment

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...

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Another one bites the dust

By on Oct 30, 2020 | 0 comments

The wheels of justice turn slowly at the best of times but one would hope the regulatory authorities would act with a degree of alacrity. Many readers will recall the case of GSD Law Ltd v Wardman & Ors [2017] EWCA Civ 2144.  This case concerned a number of personal injury claims where GSD Law acted for the claimants. At the subsequent detailed assessment of the costs of those claims in 2014, the paying parties’ insurer alleged systematic fraud and misconduct against GSD Law, including claiming for hourly rates in excess of the retainer rates, claims for senior lawyers’ rates for work done by junior fee-earners, and claims for work that had simply not been done. At first instance, Regional Costs Judge Neaves found GSD Law’s principal, Kirna Madhas, to be “a wholly unreliable witness” and that her evidence was “not only evasive and inconsistent, but dishonest”. He held all the allegations made against GSD Law proved and that the extent of the conduct and dishonesty of GSD Law was at the most serious end of the scale. This included submitting a forged conditional fee agreement to the court. He concluded: “The conduct of the receiving party’s solicitor is sufficiently egregious as to make the only appropriate sanction the disallowance of all costs on the sample files. The receiving party will also pay the costs of the assessment proceedings including the preliminary issues.” The Court of Appeal rejected GSD Law’s subsequent appeal. One of the most striking features about the case (as if forging a CFA were not bad enough) is that during the detailed assessment proceedings Ms Madhas admitted making false allegations to the Costs Lawyer Standards Board about the conduct of the insurer’s Costs Lawyer, Jon Williams of Williams Associates Costs Lawyers.  This was clearly a blatant attempt to undermine the proper challenges that had been made to her fraudulent claim for costs.  Jon Williams is one of the country’s most highly respected Costs Lawyers and, even at the time, this act alone appeared to be adequate reason for Ms Madhas to be struck off. The original decision was in 2014 and the Court of Appeal decision was in December 2017.  The relevant authorities do not appear...

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Belsner v Cam Legal Services Ltd

By on Oct 19, 2020 | 0 comments

The decision in Belsner v Cam Legal Services Ltd [2020] EWHC 2755 (QB) will have sent a shiver down the spine of many claimant solicitors in the personal injury field, although the decision may well have wider implications. The case concerned a solicitor/own client assessment. The underlying matter concerned a low value RTA being pursued in the RTA portal.  The costs recoverable from the opponent to the RTA claim were limited to fixed costs plus disbursements. The client’s solicitors sought to charge their client the costs recovered from the opponent plus 25% of the damages recovered. Section 74(3) of the Solicitors Act 1974 provides: “The amount which may be allowed on the assessment of any costs or bill of costs in respect of any item relating to proceedings in the county court shall not, except in so far as rules of court may otherwise provide, exceed the amount which could have been allowed in respect of that item as between party and party in those proceedings, having regard to the nature of the proceedings and the amount of the claim and of any counterclaim.” Although the claim itself settled prior to proceedings being issued, it was not disputed that this section applied to the case. CPR 46.9(2) provides, in relation to the detailed assessment of solicitor and client costs: “Section 74(3) of the Solicitors Act 1974 applies unless the solicitor and client have entered into a written agreement which expressly permits payment to the solicitor of an amount of costs greater than that which the client could have recovered from another party to the proceedings.” The issue for the court was whether a solicitor seeking to rely on CPR 46.9(2) has to show that the client gave informed consent to the payment to the solicitor of an amount of costs greater than that which the client could have recovered from another party to the proceedings. The terms of the CFA, which governed the costs payable between the solicitors and the client, contained standard Law Society wording: “Normally, you can claim part or all of our basic charges and our expenses and disbursements from your opponent. You provide us with your irrevocable agreement to pursue such a claim on your...

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