The failure to capture data from costs budgets filed in court risks making the review of the guideline hourly rates (GHR) a wasted opportunity, the Association of Costs Lawyers (ACL) has warned.
It also called for the right for Costs Lawyers to seek grade A rates for the most complex work they handle.
Responding to the Civil Justice Council (CJC) working party’s consultation on changes to the GHR, the ACL said it was concerned about the approach of basing the proposed figures on the small number of cases which have reached detailed assessment.
This risked the GHR merely reflecting what judges awarded on assessment rather than informing courts of the “broad costs of litigation” – which was their original intention.
The ACL said an obvious solution was to use data already lodged with the court in costs budgets. “This will be a more accurate approximation of the actual rates in the wider market which are being charged to litigants.
“The harvesting and processing of this data would not be too onerous of a task. The courts already review thousands of budgets and the data which could be procured would provide the basis of a more wide-ranging evidence-based review without requiring significant extra resources.”
Otherwise the work done by the CJC could be “a wasted opportunity”, the association warned, especially given the key role the GHR could play in “achieving the desired balance between a controlled legal spend and ensuring appropriate remuneration and access to justice”.
With Lord Justice Jackson’s idea of fixed costs for all cases worth up to £100,000 and ultimately £250,000 still on the table, the ACL said using differing guideline rates for so-called intermediate claims, as well as some multi-track claims, “could address many of the problems identified by Sir Rupert without the inherent disadvantages that a fixed costs regime brings to actions of such value and complexity”.
The ACL welcomed the confirmation in the draft Guide to the Summary Assessment of Costs that qualified Costs Lawyers would be eligible for payments as grades B or C depending on the complexity of the work.
It said: “Despite this position being ratified in 2014 by the Master of the Rolls, it is the experience of our members that we are routinely, automatically delegated to a grade D for bill drafting and written advocacy. ACL would respectfully urge the wider judiciary to note this current position.”
But costs law and the work of Costs Lawyers are growing ever more complex, the response went on – work that was previously the preserve of costs counsel.
“Many of our peers achieve the status of partner in top 100 law firms, clearly demonstrating exceptional competence. On this basis ACL struggles to comprehend the arbitrary cut-off point that qualified Costs Lawyers can only ever recover a grade B rate, regardless of the complexity of the work.
“ACL is firmly of the belief that an appropriate rate should be recoverable for appropriate work, that being a grade A rate for the most complex work. The principles which are applied to other regulated legal professionals when determining recoverable rates should be applied to Costs Lawyers.”
In response to other issues, the response questioned reducing the rest of the country to just two bands when London has three.
“ACL naturally appreciates the pre-eminent position London has within the legal market. It would agree that London itself has a diverse legal market that warrants appropriate triple banding for guideline rates.
“This does not take away however the need for the guideline rates and bands to account for the diversity in the legal markets of say Shrewsbury and Sheffield, or Hereford and Hull. Under the current proposals there seems to be none.”
The bigger issue was how working practices would change post-Covid and whether litigators would continue to work from home. “Such a development would, ACL feels, lead to the location of where work was done to be less relevant over the skill, complexity and the value of the lawyer required to undertake the work.”
ACL vice-chair Francis Kendall said: “The CJC review was much needed but the limited evidence base it uses means it may not deliver what both clients and the profession needs – a balance between access to justice and proper remuneration for the work done.
“As the working group recognises, there are also underlying issues that mean this is just a sticking plaster anyway. The marketplace has been subject to continual and significant changes over the past decade, including the introduction of fixed costs, budgeting and more recently the move to home working.
“These developments raise fundamental questions about how best hourly rates can evolve to meet these changes. ACL would encourage the CJC to actively consider these questions in future, not-too-distant reviews.”
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Notes to editors:
Association of Costs Lawyers
The Association of Costs Lawyers (ACL) is a membership body representing and promoting the status and interests of Cost Lawyers in England and Wales. Founded in 1977, the Association was granted authorised body status in 2007 and is a front-line regulator, able to authorise its members to undertake the reserved legal activities of litigation and advocacy. In recognition of this new-found status, ACL changed its name from the Association of Law Costs Draftsmen in 2011. Costs Lawyers are regulated by the Costs Lawyer Standards Board.
The term ‘costs draftsman’ denotes an unregulated and unqualified person operating in costs and those who instruct costs draftsmen have no recourse to either the Legal Ombudsman or the Costs Lawyer Standards Board.