CJC raises prospect of Costs Lawyers claiming grade A rates in future

The Civil Justice Council (CJC) working group on the guideline hourly rates (GHR) has raised the prospect of Costs Lawyers being able to claim grade A rates in future.

The working group’s final report was issued last Friday with no changes to the draft recommendations it put forward in January.

The report emphasised in several places that, in both the current Guide to the summary assessment of costs and the revised version it proposes, qualified Costs Lawyers were eligible for payment at grades B or C depending on the complexity of the work done.

In a footnote, it added: “Given that Costs Lawyers are now a specific body of authorised lawyers, it may in the future be appropriate to align them with solicitors and legal executives across all grades. However, the working group had not consulted on this and felt unable to recommend it.”

The report noted that one consultee said the N260 needed to include Costs Lawyers at grade B or C. “It is correct that the definitions of grades on the N260 do not include this provision,” the report said. “It is unnecessary for them to do so, since the eligibility of Costs Lawyers to be assessed at grades B or C is not as of right, but case dependent.”

The working group recommended the new rates it put forward in January, as well as amending the London 1 and London 2 rates to reflect the work done, rather than whether or not firms were in the City. This would make London 1 primarily be for very heavy commercial and corporate work and London 2 for all other work.

The National 2 and 3 bands would be merged into a single band and those parts of the country not currently allocated to a band would be put into one.

The working party, chaired by Mr Justice Stewart, received 103 responses to its consultation.

The final report said: “It would not be unfair to summarise the responses from receiving and paying parties by saying that the former argued that the proposed GHRs were insufficient and that more specialisations should be recognised as warranting separate and higher GHRs; the latter that they were based on totally flawed methodology and that no increase was warranted or, indeed, that the present GHRs were too high.”

The biggest criticisms related to the methodology the working group employed to generate the proposed GHR, which mainly used the rates allowed by judges on assessment.

There were several calls to look to at claimed rates but the group rejected the argument that these reflected ‘market rates’. Costs budgets could also not be used, as the ACL had suggested, as the court did not approve hourly rates as part of the budgeting process.

The report said that, “though capable of some valid criticism”, the methodology was “the best available in all the circumstances and is a sufficiently sound basis on which to make recommendations”.

Though only a small percentage of cases went to assessment, “to suggest that the experienced costs judges’ knowledge of hourly rates claimed and allowed should not therefore be relied on is not accepted.

“Albeit that it is not a ‘scientific’ yardstick, it is a reasonable one, and is based on experience.”

The report also recommended to the rule committee that the signatory of the N260 and detailed assessment bill should have to specify the location of the fee-earners carrying out the work.

This is not, however, intended to cover work done from home: “The purpose of the recommendation is precisely to deal with files being transferred to a different office for work to be done there.”

The interim report recommended annual uprating, but the final report said the question of which index to use for this was “extremely controversial”.

“It is understood by the working group that the government has considered such matters in connection with its reviews of [fixed recoverable costs] and [Intellectual Property Enterprise Court] capped costs.

“These reviews should be available publicly before the time of any annual update of GHRs. The working group therefore recommends that the CJC’s decision on annual update of GHRs should be guided by the outcome of these reviews.”

Mr Justice Stewart, who chaired the working group, said: “It is hoped, if the recommendations are accepted, that the new rates will offer greater certainty to litigants, the professions and the judiciary.”

The recommendations will now be considered by the Master of the Rolls, Sir Geoffrey Vos (pictured), who said: “I am mindful of the views of those who have taken the time to write to me and raised concerns during the consultation process in respect of likely changes to working practices following the pandemic.

“I am also aware of those who support the recommendations arguing that the rates need to be addressed after being static for the last 11 years. I will now consider the recommendations in detail and what action ought to be taken.”

ACL chair Claire Green said: “It is unarguable that the GHRs need to be increased after an 11-year freeze. Deciding on new rates is no easy task and the working group has erred on the side of caution in its recommendations. But this will hopefully encourage the Master of the Rolls to approve them as soon as possible.

“We are particularly pleased to see the final report stressing that qualified Costs Lawyers are eligible for payment at grades B or C depending on the complexity of the work done along with the recognition that it may in the future be appropriate to align Costs Lawyers with solicitors and legal executives across all grades.

“Though there were good reasons for the group only having limited evidence to work on, it is clear that a more thorough examination will be needed 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.”

The working group repeated its comment from January that 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”. This may well be “within, say, three years, though it is difficult to predict”, it said.

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Costs News
Published date
05 Aug 2021

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