Guideline hourly rates review could begin next month

The costs sub-committee of the Civil Justice Council is planning to launch on online survey of law firms next month which will mark the start of the Master of the Rolls' review of guideline hourly rates.

Murray Heining (pictured), chairman of the Association of Costs Lawyers (ACL), said the committee's work would "lay the foundations of costs assessments for years to come".

He went on: "This process will make the rates even more influential than they already are and it is imperative that costs lawyers and solicitors ensure that the committee has all the information it needs to recommend realistic and viable new rates."

The rates were last increased in 2010 and the costs committee has been charged with carrying out an evidence-based review and reporting to the Master of the Rolls, Lord Dyson, by 31 March 2014.

Judge Hodge QC, the committee's circuit judge member, told last week's ACL conference that it hoped to issue the call for evidence next month, which would be followed by meetings with professional bodies and firms in February 2014.

Judge Hodge said the current rates were based on data from 2007 and there was a need to review the current costs of running a law firm as evidence emerged of the impact of the Jackson reforms and ABSs.

Other issues are whether there should be different rates for different areas of litigation, such as commercial, personal injury and clinical negligence, and whether the geographical bands should be changed.

Judge Hodge suggested that defining City practices, which have higher rates, by their EC postcodes was outdated, given that Clifford Chance was in E14.

Speaking at SJ Live earlier this week, David Marshall, claimant personal injury representative on the costs committee, said the guideline hourly rates review could be another "iceberg" which would hit lawyers' earnings.

"Rates have gone up by inflation until now, but the committee is looking for evidence and there is no guarantee that rates will go up," he said.

Marshall said the new rules on proportionality in costs were "another iceberg" faced by law firms.

"The fact that work is necessary is irrelevant," he said. "Whether it is proportionate is the issue.

"There is no practice direction on this and judges found it difficult to apply the old rules. We will have satellite litigation for quite a long time."

Marshall said there were 14 definitions of proportionality in the current rules, all of them slightly different.

He added that costs budgeting was a further iceberg, which could result in "huge amounts in costs" for those who did not get their budgets right, and that his firm was using costs lawyers, particularly in the big cases.