The ACL has called for implementation of the 2014 recommendations that Costs Lawyers should be able to recover at grade B or C rates in the wake of the Civil Justice Council working party interim report on the guideline hourly rates (GHR), which was published last Friday.
The report, which recommended what it described as “modest” increases ranging from 7% to 35% to the existing rates, noted that the previous review headed by Lord Justice Foskett in 2014 recommended that “suitably qualified Costs Lawyers should be eligible for grades B and C”, which was accepted by the then-Master of the Rolls Lord Dyson. However, as his overall decision was against making changes to the rates, they were not implemented.
The working group said it had not revisited the issue – along with others, such as putting CILEx Lawyers with eight years-plus qualification on an equal footing with solicitors – “given that they were the subject of detailed consideration in 2014”.
ACL chair Claire Green said: “Implementation of this [recommendation], and recognition of the value of our work, is now long overdue.”
The working group report is now out for consultation until the end of March ahead of a final report going to the Master of the Rolls, Sir Geoffrey Vos, in the summer.
It said that inflation since 2010 was 13% using the service producer price index (SPPI) for all services, 17% on the SPPI for professional services, 34% on the SPPI for legal services and 24% using the consumer price index. One of the SPPI indices should be used to annually uprated the GHR, it recommended.
The working group proposed changing the London 1 and London 2 bands so that they reflect the work done, rather than postcode, given the “vast range of work of varying complexity and size” carried out by City law firms. Thus London 1 would primarily be for very heavy commercial and corporate work and London 2 for all other work.
The group struggled to obtain much data from lawyers at big commercial firms; most of that evidence was based on judicial summary assessment rates. It also recognised that there were anomalies in the present boundaries for London 2 and London 3, but said costs judges would “no doubt continue to take into account the nature, complexity and location of the work when assessing complex high-value work carried out by firms which are based in areas of central London but are located in London 3”.
The report recommended merging National 2 and 3 into a single band, as the rates were the same and would continue to be under its proposals, although it might be that a single national rate could be achieved in the future review. It also placed those parts of the country not currently allocated to a band into one.
The report said: “The working group is of the opinion that these recommended GHRs will give to the inexperienced judge a better steer, by providing a simplified scheme to assist such judges without them being a substitute for the proper exercise for judicial discretion.”
The working group noted that the Foskett review saw evidence that some firms were charging for work at their Central London office rates that was carried out in regional or outsourced offices. Foskett said: “This will, of course, always be a matter for close scrutiny at that costs assessment stage.”
However, some members of the present working group were not convinced that this happened; the report said the Civil Procedure Rule Committee should consider “a small but significant amendment to the summary assessment form N260 and to the information provided on the detailed assessment bill” which would require the signatory to specify the location of the fee-earners carrying out the work.
The group said it had not made more radical recommendations given the likelihood that another, more fundamental, review of the regime would soon be required.
The court modernisation programme and Covid-19 were likely “fundamentally to affect the way in which the legal profession provides its services” and a further review by a working group “should be considered once the need is considered by the CJC to have arisen”.
The group said: “This may well be within, say, three years, though it is difficult to predict… That would be the appropriate occasion to examine the methodology, how effective this working group’s work has been, and any appropriate, evidence-based amendments to geographical areas.”
Ms Green said: “It is unarguable that the GHRs need to be increased after a decade-long freeze. Deciding on new rates is no easy task. The working group describes its proposed increases as ‘modest’ and if nothing else that will hopefully aid their approval should they be the final figures recommended to the Master of the Rolls.
“The report also makes some welcome tweaks to the regime, most notably by recategorising London 1 and London 2 bands to reflect the type of work done rather than a firm’s postcode, and ensuring that every part of the country outside the capital is specifically allocated to a band.
“The group clearly sees its work as an interim measure ahead of a fundamental review of the GHR in the context of the profession’s changing working practices. To some extent, the GHRs do reflect a time when legal life was very different to today’s technology-enabled practice. But, in the meantime, it is important that Costs Lawyers and solicitors have their say on the working group’s report.”
Richard Miller, the Law Society’s head of justice, said: “Guideline hourly rates for solicitors have not been changed in over 10 years and were long overdue a review. Revised rates would give both solicitors and their clients greater clarity about costs and we look forward to responding to the consultation points raised in the report.
“Although this report has been carried out as a standalone piece of work, it will be important to consider these changes in the context of other civil justice reforms including the Ministry of Justice’s work on fixed recoverable costs and the wider HMCTS reform programme.”