Sitting on the fence

The guideline hourly rates (GHR) interim report, published by the Civil Justice Council (CJC) for consultation in January, showed how it struggled to obtain evidence from lawyers. 

In 2015, the GHR were frozen at their 2010 levels indefinitely. This was after the decision was made that there was no prospect of the evidence required to change them being produced, despite recommendations in a report produced by a similar working group headed by Mr Justice Foskett. 

A repeat of that, when the final report goes to the new Master of the Rolls, Sir Geoffrey Vos, this summer would be a disaster.

The 2020 working group was chaired by Mr Justice Stewart with members from across the judiciary and profession, including the Association of Costs Lawyers (ACL). The headline from the report is that there should be what it describes as “modest” increases – ranging from 7 per cent to 35 per cent depending on the band and grade.

It recorded that inflation since 2010 was 13 per cent, using the service producer price index (SPPI) for all services; 17 per cent on the SPPI for professional services; 34 per cent on the SPPI for legal services; and 24 per cent using the consumer price index. You might think the SPPI for legal services is the one to use. It is in line with HHJ Hodge (who consulted the Bank of England inflation calculator), although costs judge Master Whalan went for the consumer prices index.

The working group sat on the fence: “If the GHRs produced in this report are accepted as being soundly based, then in the short term they could be updated annually in line with an appropriate SPPI index.” 

The other recommendations mainly affected London. It proposed changing London 1 and London 2 rates to reflect the work done rather than postcode, reflecting the “vast range of work of varying complexity and size” carried out by City firms. Thus London 1 would primarily be for heavy commercial and corporate work and London 2 for all other work.

It recognised the anomalies in the present boundaries for London 2 and London 3 and said, pending a wider review, “costs judges will no doubt continue to take into account the nature, complexity and location of the work when assessing complex high value work carried out by firms which are based in areas of central London but are located in London 3”.

The group recommended merging national bands 2 and 3 into a single band. In future, there may be a single national rate. 

There was only one area of specific disagreement on the proposed rates. Foskett J recommended suitably qualified costs lawyers should be eligible for grades B and C, while CILEx fellows with eight-plus years’ post-qualification experience should have parity with solicitors of equivalent experience.

Lord Dyson accepted both recommendations but, because of his overall decision, they weren’t implemented. The working group said it did not revisit them, “given that they were the subject of detailed consideration in 2014”. We strongly believe they should now be introduced. Costs lawyers more than prove their worth and as properly trained and regulated professionals should be equated with more senior practitioners.

It’s also worth noting that the working group said the rates for counsel in the White Book were unhelpful and “hopelessly out of date” and should be deleted from the Guide to the summary assessment of costs. 

The working group wasn’t wrong in describing its recommendations as modest. The profession has until 31 March to respond to the consultation and make the case for something more radical. What was clearly holding it back, however, was a belief that a deeper review would soon be required.

This is not necessarily wrong, but history shows that reviews of civil litigation costs – outside of personal injury at least – don’t happen quickly. Responding to the consultation now is important. The ACL is convening a working party to do just that.
 
Claire Green is chair of the Association of Costs Lawyers associationofcostslawyers.co.uk