Legal Cost Specialists

hourly rates

Guideline Hourly Rate Consultation

By on Mar 31, 2021 | 1 comment

The Civil Justice Council’s consultation on Guideline Hourly Rates (GHRs) ends today. One of the questions put out for consultation was whether the N260 for summary assessment and the information provided in a formal Bill of Costs for detailed assessment should require the signatory to specify the location of the fee earners who carried out the work. This appears to have been prompted by concerns raised in the previous 2014 Foskett report into GHRs that firms were charging for work at their Central London office rates, while much or all of the work was actually carried out in regional or outsourced offices. The wording of any proposed rule change remains to be drafted, but it is difficult to see how an amendment requiring the location of the fee earners carrying out the work to be specified would only be relevant for work undertaken in a regional/outsourced office. A statement that all work was undertaken in the City would clearly be fundamentally inaccurate if 50% of the work was undertaken from a shed at the bottom of a fee earner’s garden in Brighton. It would also be illogical to require an N260/Bill of Costs to specify if work was undertaken from a regional/outsourced office but for there to be no matching requirement to make it clear if work is undertaken from a home office. The traditional reason for differing GHRs for different geographical locations is: At least in the case of City firms and, to an extent, Central London firms, the recognition that the work they undertake is normally of a more specialised nature than that of firms practising elsewhere. The overheads (such as office rental, cost of support staff, etc) will vary depending on the location of the firm. To the extent to which the latter of these applies when comparing the work of a personal injury firm based in central Manchester compared to a personal injury firm based in Skegness, how much more must this apply when the work is undertaken by a fee earner working from home with no office rental cost to the firm and, usually, much lower additional overheads? Home working, at least part-time, is not an entirely new phenomenon, but Covid-19 has pushed the...

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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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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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Hourly rates for personal injury work

By on Jul 16, 2018 | 3 comments

Although those working in legal costs tend to get very excited about the latest obscure technical challenge, it is the routine areas of dispute that have the greatest impact on the largest number of cases.  A costs judge allowing an hourly rate of 20% more or less than anticipated will usually completely throw any offers made. One of the particular problem areas surrounding costs law has always been the issue of what hourly rates are appropriate for solicitors undertaking personal injury work who are based in the geographical location which is termed “City of London” (ie postcodes beginning EC1, EC2, EC3 and EC4). The starting point (despite what some maintain) is always to look at the Guideline Hourly Rates for summary assessment.  The last published rates (2010) for Grade A fee earners gave the following for different bands: City of London                                   £409 Central London                                 £317 Outer London                                    £229-267 Band 1 (eg Manchester Central)    £217 Band 2/3 (eg Luton)                        £198 (The explanation given for the range of figures for Outer London is that “these ranges go some way towards reflecting the wide range of work types transacted in these areas”.) It can immediately be seen that there is a vast difference between the Guideline Rates for City and Band 2.  Some of this difference will be due to the average differences in overheads (principally dictated by property prices/rent and wages), but this clearly does not begin to explain the full difference. The answer was to be found as far back as Senior Costs Judge Master Hurst’s decision in King v Telegraph Group Ltd [2005] EWHC 90015 (Costs): “City rates for City solicitors are recoverable where the City solicitor is undertaking City work, which is normally heavy commercial or corporate work.” Although this answers the question as to whether City rates should automatically be applied to personal injury work undertaken by firms based in the City, it does take the matter much further as to what rate...

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Inadequate hourly rates?

By on Aug 31, 2012 | 9 comments

A firm of solicitors is prepared to accept instructions to act in an RTA claim where the claimant has the benefit of BTE insurance and where the BTE policy will pay the solicitors an hourly rate of £130 across the board, including work done by Grade A fee earners. The limit of the BTE indemnity comes to an end and the solicitors at this stage enter into a CFA. At the same time the solicitors more than double the hourly rates being charged. If the solicitors were initially prepared to act in the matter for £130, on what basis does that rate cease to be adequate simply because the terms of the retainer change?...

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New Guideline Hourly Rates?

By on Mar 23, 2012 | 3 comments

I note the suggestion that trainee solicitors could be paid as little as £2.60 an hour in their first year under an amendment to the Solicitors Regulation Authority’s proposals for ending the minimum wage. Presumably we can then expect a corresponding decrease in Guideline Hourly Rates for trainee solicitors to, say, £10 per hour. This should still give firms a reasonable profit margin. Obviously Guideline Rates ranging from £90-138 would be totally unsustainable with pay rates of £2.60 per...

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