Legal executives to recoup same fees as solicitors

‘The market should determine rates’

John Bramhall is the president of London Solicitors Litigation Association

“The LSLA has been awaiting the outcome of the Master of the Roll's deliberations on the Costs Committee of the CJC's recommendations on GHRs with some nervousness.

“The concern was that rather than the normal market-driven or inflationary increase, we would have seen a fundamentally different approach adopted leading to a potentially significant reduction in recoverable rates. The LSLA has consistently believed the market should determine rates and that the CJC Committee's model – expense of time plus a seemingly arbitrary pre-determined profit level – was not going to reflect market rates fairly. The LSLA notes that the MR has rejected the Costs Committee's recommendations, emphasising the original intention of the guidelines, as reiterated by Jackson – that ‘the aim of the GHR should be to reflect market rates’.

“While it is disappointing for the MR to conclude that the data available to the committee fell short of adequate for him to determine appropriate rates for GHRs, we support that conclusion. We will urge the committee to revisit its criteria better to reflect the MR's view that reliable market evidence is needed so that GHRs are a broad approximation of actual rates in the market.

“The LSLA will continue to assist the committee in its work, and note that the changes that are to be made to rates for costs lawyers and legal executives seem pragmatic and sensible given the increasing role both have in contested cases.”

‘The writing is on the wall’

Chris White is a senior costs draftsman at Plexus Law

"After both sides of the industry have waited with bated breath for a long time the outcome is something of an anti-climax to those of a defendant persuasion, although claimant PI firms will doubtless be breathing a collective sigh of relief.

"With many such firms basing their business model on the employment of junior unqualified fee earners to conduct PI claims the proposed reductions to the Grade C and D charging rates would have had substantial impact at a time when many are still reeling from the impact of other reforms such as fixed fees for fast track and the abolition of success fee recovery.

"The writing would, however, appear to be on the wall, with these rate changes, or something very much like them, likely to be introduced after a further period of consultation. This is a temporary stay of execution only and will soon continue the drive to curtail the excessive costs in civil litigation that has been so prevalent over the last 15 years.

"When the reduced rates are introduced it will be interesting to see the extent to which they are adopted at District Judge level. The courts have hitherto viewed the rates as a starting point or guide only and have augmented them where a matter was viewed as complex or difficult, particularly in multi track cases.

"With fixed fees only for fast track cases going forward the battle ground for defendants will be those multi track cases and the attempts by claimants to increase the lower rates substantially to reflect any perceived complexity in the litigation or indeed their own individual overheads. Those arguments now promise to have far more at stake for both parties than ever before."

'Avoiding change for the sake of change'

David Johnson is the president of the Forum of Insurance Lawyers (FOIL):

"The Master of the Roll’s announcement around Guideline Hourly Rates reflects many of the concerns that FOIL raised when giving evidence before the CJC’s Costs Committee.

"Variation of the GHR has the potential to significantly impact on litigation costs and with that, insurance premiums. In light of that fact, FOIL has consistently maintained that any change in the GHR would need to be supported by a solid body of independently gathered and verified evidence.  The budgetary constraints on the CJC’s Costs Committee were always likely to make it difficult for them to obtain sufficiently robust evidence on the issues. Moreover, even had that evidence been forthcoming it would not account for the full effects of the Jackson reforms, which have yet to fully crystallise.

"Against that background, FOIL is pleased to see an avoidance of change for the sake of change. It is also pleased to see that within its recommendations, the committee did not recommend different rates for different types of litigation but did advocate a new paralegal grade, both points that featured in FOIL’s consultation response."