Legal Cost Specialists

hourly rates

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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The cost of security

By on Jun 17, 2011 | 1 comment

One aspect of the preliminary issues judgment in Motto & Ors v Trafigura Ltd & Anor [2011] EWHC 90201 (Costs) (15 February 2011) that I did not quite understand concerned the cost of security. The claimants’ solicitors had needed to pay for security for their employees whilst working in a dangerous part of the world. These costs were claimed as a specific category of legal costs. Master Hurst allowed such costs and said: “The decision which I have reached in relation to hourly rates does not reflect an additional element for the cost of security in the Ivory Coast, but rather, as Mr Williams submits, the overheads of a firm based in Clarkenwell. Had the hourly rates included an element for overseas security, I should have had to hear argument and details before arriving at a final figure. In the event, therefore, to the extent that it is reasonable and proportionate, the cost of security is recoverable.” However, when dealing with the issue of what hourly rates to allow he ruled: “In my view it is also necessary to take into account the inevitable increase in overheads that will be incurred by having to employ people to work in dangerous conditions overseas.” Perhaps this was meant to mean that staff might have had to be paid more than normal to work in dangerous conditions, and thus the firm would be paying higher salaries (so incurring higher overheads) than would normally be the case. However, this might have been worded more...

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Costs draftsmen hourly rates

By on Jun 15, 2011 | 16 comments

The amount of the claim for costs in the case of Motto & Ors v Trafigura Ltd & Anor [2011] EWHC 90201 (Costs) (15 February 2011) – £104,707,772.72 – was truly eye-watering. This was, on any analysis, a complex group action involving 30,000 claimants. So, what did Master Hurst have to say about the appropriate hourly rates to allow for the law costs draftsmen who prepared the bill of costs in what must be one of the largest and most complex legal costs claims ever seen? “The final matter raised by Mr Bacon was the rate payable to the costs draftsmen. He suggested this should be the grade D rate, and criticised the various mistakes which had been thrown up in the way in which the bill had been drawn. I have no details of the number of costs draftsmen involved, but am aware that Mr Ellis, who is a very experienced costs draftsman, has been in court throughout the hearing. I would expect Mr Ellis to be charged at the grade C rate, and for other more junior costs draftsmen to be charged at the grade D rate. This is a matter which may have to be argued further when the details of the costs draftsmen’s involvement are known.” One of the most well respected costs draftsman in the country, dealing with one of the most complex costs matters, and the provisional view was that grade C rates were appropriate with everyone else at grade D. What a contrast with the views expressed in Cook on Costs: “in heavy bills involving amounts considerably in excess of the fast track … the use of a Grade A or B draftsman … would be reasonable and...

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Hourly rate or success fee?

By on Jun 10, 2011 | 7 comments

When considering the issue of what hourly rates to allow, in the preliminary issues judgment in Motto & Ors v Trafigura Ltd & Anor [2011] EWHC 90201 (Costs) (15 February 2011), amongst the relevant factors identified by Master Hurst was: “I have no doubt in this case that Mr Day has taken responsibility for this litigation at great personal financial risk to himself, and financial risk to his firm generally.” I don’t understand this. The ‘financial risk’ was the risk that the claims would fail and, as they were being run on a ‘no win, no fee’ basis, no costs would be recovered. However, that is what the success fee is designed to cover and was considered elsewhere in the judgment. To factor this in when considering what hourly rates to allow appears to be a case of...

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