Solicitor Guideline Hourly Rates Should be a Starting Point

Various Claimants v News Group Newspapers Ltd [2023] EWHC 827 (SCCO)

 

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In the recent “phone hacking litigation” case of Various Claimants v News Group Newspapers Ltd [2023] EWHC 827 (SCCO), it was stated by Costs Judge Rowley that the solicitor Guideline Hourly Rates (GHR) should be used merely as a starting point and not the finishing point in determining hourly rates in detailed assessment.

 

Solicitor Guideline Hourly Rates: An Overview

Solicitor Guideline Hourly Rates are used as a basis for solicitors and fee earners to charge their clients for legal services. The guideline figures were last reviewed in October 2021 and take into account factors such as the complexity of the work, the seniority of the solicitor, and the location of the solicitor’s practice.

Prior the review in 2021, rates had not been updated since 2010; and thus, faced scrutiny from many professionals in in the legal sector. In 2021, the Civil Justice Council working group proposed increases to the previous guideline hourly rates of between 14% and 20% (based on the grade of the fee earner) compared to the Guideline Hourly Rates of 2010.

Whilst this proposal was set in an interim report, in July 2021, the Civil Justice Council recommended that these proposals be implemented in full in their final report. The final report provided a lengthy and detailed analysis of the previous Guideline Hourly Rates. The Civil Justice Council recommendations were addressed to the Head of Civil Justice/Master of the Rolls and to the Rule Committee.

The Master of the Rolls accepted the recommendations and the increased Guideline Hourly Rates came into force from October 2021.

The new solicitor Guideline Hourly Rates sets out different rates for solicitors and fee earners based on the grade and location. For example, a Grade A solicitor in a centrally based London firm would be able to charge significantly more than a Grade C solicitor based outside of London.

Although the new solicitor Guideline Hourly Rates came as a welcomed update, many would still argue that they do not reflect the different types of work being carried out by solicitors. For example, it could be argued that those carrying out substantial and complex litigation, such as heavy commercial and corporate work by centrally based London firms should justify a significantly higher rate.

 

Various Claimants v News Group Newspapers Ltd [2023]

In this case concerning solicitor Guideline Hourly Rates, it was stated by costs Judge Rowley that rates are provided as a starting point for those faced with summary assessment, but should not necessarily be the finishing point.

“GHR may be a useful starting point in a detailed assessment as well as in a summary assessment.”

He further stated:

“The GHR are provided predominantly to assist judges who do not specialise in costs cases to deal with a summary assessment of costs when faced with the successful party’s summary assessment schedule and competing arguments from the advocates.”

The Costs Judge discussed proportionality and referred to the “Lownds Test” which was set out in  Lownds v Home Office [2002] EWCA Civ 365.

“The “Lownds Test” required the court to consider at the outset whether or not the costs claimed appeared to be disproportionate on a global basis. Depending upon that conclusion, the court would allow costs that had been reasonably incurred and were reasonable in amount, or would apply a stricter test of necessity in respect of those costs.”

He further stated:

“With the move of the test of proportionality to the end of proceedings as confirmed by the case of West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220, the advocates’ opportunity to roam over the terrain of the substantive case has to some extent been stymied. However, the factors in CPR 44.4 which related to the Lownds test, also apply to the question of the appropriate level of hourly rates. Consequently, submissions on hourly rates now tend to take considerably longer than they did in order for each advocate to describe the nature of the case in addition to any specific points regarding the hourly rates claimed.”

He also discussed the complexity of the case and the expertise of the fee earners involved, and in his decision, a Grade C rate was allowed at £275 and a Grade B rate was reduced to £350.

“Given the expertise of the solicitors and the weight of the case in terms of its value, complexity and importance, I take the view that the claimants have justified the hourly rates that have been claimed.”

Some Grade A fee earners were granted a rate of £490 per hour, whilst others were allowed a rate of £460 per hour, significantly above the guideline rate applicable.

“In respect of the Grade A fee earners, I am persuaded that Messrs Hutchings, Thomson and Heath should be entitled to the rate of £490 per hour. I do not see that a peripheral fee earner as Mr Canty as here can justify more than the general hourly rate of £460 which I allow for him along with the other Grade A fee earners. “

How can ARC Costs Assist?

The team at ARC Costs regularly assist both paying parties and receiving parties in preparing documents, such as Bills of Costs and Costs Budgets. We also often deal with disputes between parties in relation to the hourly rates being charged as part of any costs recovery. Please note that, as shown in the above case, solicitor guideline hourly rates remain guidelines only. A number of factors can be taken into account to allow for a higher rate to be claimed in costs, such the expertise of a Solicitor and the complexity of the case.

The issues of the hourly rates claimed in costs can be dealt with through Points of Dispute and Replies, with oral submissions sometimes being required at summary assessment and detailed assessment where a decision on the reasonableness of the rates claimed will be made by the costs judge.

To discuss your costs query further, please contact us on 01204 397302 or email on of the team at info@arccosts.co.uk. Alternatively, you may complete our online enquiry form and we will contact you to discuss your query further.

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