The long awaited Guideline Hourly Rate (GHR) report has now been published by the working group. The main takeaway from this report are the proposed increased hourly rates, which have been described as a ‘modest’ increase by the working group.
The working group have proposed the rates based on the evidence provided by the legal community. This evidence, in the most part, is based on the rates that have been allowed on assessment by the judiciary, however if matters settled between the parties and rates were agreed as part of this, the evidence was also welcome.
The Evidence
Many conclusions can be drawn from the evidence and the sample size. It is not surprising however that the evidence from prolific defendant firm DWF, suggests that the hourly rates either agreed or allowed at assessment are in line with current guideline rates or below. The biggest discretion based on the DWF evidence is that Grade A London 1 rates were allowed on average 32.61% lower than the guideline rate. This of course is countered by the data from FOCIS (The Forum of Complex Injury Solicitors) which unsurprisingly shows an increase for GHR almost across the board for the rates agreed or assessed.
There are obvious concerns with the evidence however the legal community were given ample opportunity to provide evidence and the majority have failed to do so.
The Proposed Guideline Hourly Rates
| Grade A | Grade B | Grade C | Grade D | |
| London 1 | £512 (25.2%) | £348 (17.6%) | £270 (19.5%) | £186 (34.8%) |
| London 2 | £373 (17.8%) | £289 (19.5%) | £244 (25%) | £139 (10.4%) |
| London 3 | £282 (13.7%) | £232 (15.8%) | £185 (11.9%) | £129 (7%) |
| National 1 | £261 (20.2%) | £218 (13.5%) | £178 (10.7%) | £126 (6.8%) |
| National 2 | £255 (26.78%) | £218 (23.2%) | £177 (21.3%) | £126 (13.5%) |
Commentary on the Proposed Guideline Hourly Rates
One interesting point to make is the disparity between the evidence and the proposed increased rates. Below is Table 2c in appendix H of the report.
| Grade A | Grade B | Grade C | Grade D | |||||||||
| Pooled | Mean assess ment | Current GHR | Mean % diff | Mean assess ment | Current GHR | Mean % diff | Mean assess ment | Current GHR | Mean % diff | Mean assess ment | Current GHR | Mean % diff |
London 1 | £366.93 | £409 | -10.29% | £289.25 | £296 | -2.28% | £227.49 | £226 | 0.66% | £142.30 | £138 | 3.11% |
| London 3 | £281.80 | £248 | 13.63% | £231.58 | £200 | 15.79% | £184.50 | £165 | 11.82% | £129.46 | £121 | 6.99% |
| National 1 | £260.72 | £217 | 20.15% | £216.42 | £192 | 12.72% | £178.19 | £161 | 10.68% | £126.01 | £118 | 6.78% |
| National 2/3 | £254.80 | £201 | 26.77% | £220.42 | £177 | 24.53% | £177.14 | £146 | 21.33% | £126.03 | £111 | 13.54% |
The above table clearly shows that the average London 1 rates are generally being assessed/agreed in line with the GHR or in the case of Grade A, below those GHR. National 2 on the other hand, has on average, the largest increases overall allowed or agreed. However the rates being proposed see some of the largest increases going to London 1.
Additionally both the proposed GHR and the data in table 2c suggest that there is little to no difference between National 1 and National 2. One possible conclusion is that basing the proposed GHR on the data from the judiciary may not be the best starting point as the court may not be taking into account the additional cost of running for example an inner city Bristol firm compared to a small firm in a local town. The working group however seem to have stuck with these results for the national bandings but have continued to offer three distinct and inflated London bandings.
On a positive note, the report does propose providing bandings for all areas which will save on unnecessary arguments regarding the appropriate banding.
Additionally if the recommendations are accepted it is proposed that the GHR will increase annually in line with an appropriate SPPI index in between full reviews.
Takeaway
Peppered throughout the report is the mantra that guideline rates are simply just that, guidelines. They are to be utilised by the less experience costs judge when deciding the appropriate hourly rate.
‘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 also updated the “Guide for Summary Assessment of Costs’, which succinctly explains that the GHR are a starting point and that depending on various factors an enhancement to those rates will be justified. Below is an extract:
‘28. The guideline figures are intended to provide a starting point for those faced with summary assessment.
29. In substantial and complex litigation an hourly rate in excess of the guideline figures may be appropriate for grade A, B and C fee earners where other factors, for example the value of the litigation, the level of the complexity, the urgency or importance of the matter, as well as any international element, would justify a significantly higher rate. It is important to note (a) that these are only examples and (b) they are not restricted to high level commercial work, but may apply, for example, to large and complex personal injury work.”
Consultation Period
The consultation period is open until 31 March 2021. If you have an opinion I urge you to contact them. They are looking for comment on the below:
‘The working group welcomes any comments on the contents of this draft report. In particular comments are sought on: (i) The methodology used by the working group. (ii) The recommended changes to areas London 1 and London 2. (iii) The recommended GHRs set out in paragraph 4.18 of this report. (iv) Specifically, whether the rate of £186 for London 1 Grade D is too high; if so, at what rate it should be set and why? (v) The recommended changes to the geographical areas in section 5 of this report and the recommendation to have two national bands. (vi) Should the working group recommend that the Civil Procedure Rule Committee be requested to consider amending the summary assessment form N260 and the information provided on the detailed assessment bill - the amendment would be to require the signatory to specify the location of the fee earners carrying out the work.77 (vii) The recommended revisions to the text of the Guide in Appendix J.’
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