Guideline hourly rates frozen
17th April, 2015
In July 2014 the Civil Justice Council costs committee, after a year-long study, put forward recommendations for a revision of guideline hourly rates (GHRs). The Master of the Rolls, Lord Dyson, rejected the proposals because of fundamental shortcomings in the evidence and sought urgent discussions with the Law Society and the Government with a view to obtaining the appropriate evidence upon which new guideline rates could “reasonably and safely” be based.
Fast forward to April 2015 and Lord Dyson has announced that due to there being no prospect of the evidence required to change GHRs being produced, the existing rates (in force from April 2010) will be frozen indefinitely meaning they will have remained unchanged for 5 years now.
Lord Dyson has said
“These discussions… have not made any material change to the position I was placed in last July – there is no funding available from any source for undertaking the sort of in-depth survey which the Civil Justice Council’s costs committee and its expert advisers consider is required to produce an adequate evidence base.
There is also considerable doubt that even if such funds were forthcoming there would be sufficient numbers of firms willing to participate and provide the level of detailed data required to enable the committee (and in turn myself) to produce accurate and reasonable GHRs.”
Lord Dyson had previously ruled out any inflation based increase, and it was anticipated (and certainly hoped by paying parties) that any revision to GHRs would be in a downward direction.
So whilst Claimant’s Solicitors may have breathed a sigh of relief at avoiding that outcome, they should take heed that Lord Dyson is to continue to press the Government to extend the use of fixed fees.
His view is that the relevance of GHRs is diminishing in any event due to:
- advances in technology and business practices and models
- the ever-increasing sub-specialisation of the law which is seeing the market increasingly dictate rates in some fields (particularly commercial law)
- the judiciary’s use of proportionality as a driving principle in assessing costs
- the greater application of costs budgeting
Lord Dyson has stated “Not least, I hope, of such factors, is a trend towards the greater use of fixed costs in litigation. I have long advocated their wider application, and will continue to press this point to ministers and others in the hope that this important element of the Jackson reforms is implemented.”
For the time being GHRs will remain “… an integral part of the process of judges making summary assessments of costs in proceedings. They also form a part, even if only a starting reference point, in the preparation of detailed assessments. They also provide a yardstick for comparison purposes in costs budgeting.”