The Civil Justice Council have released their working group report in respect of guideline hourly rates. The guideline hourly rates haven’t been increased since 2010. The CJC report does provide a brief history of why the hourly rates have stagnated for over a decade with the main reason being that the evidence has just not been there to make a well-reasoned and accurate decision.
However, the CJC have taken a different approach which has looked to the experience and wisdom of the Costs Judges at the SCCO and the regional Costs Judges and the rates that have been allowed at detailed and provisional assessments as the foundation for their recommendations. The following are the recommended 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%)|
It is clear that the CJC have placed more reliance on the hourly rates which have been allowed by costs judges instead of reflecting purely an inflationary increase because the report does set out the following inflation date: ‘the increase from 2010 (Q1) to 2020 (Q3) was:
- 13% using the Service Producer Price Index (SPPI) for all services,
- 17% on SPPI (for professional services),
- 34% on SPPI (legal services), and;
- 24% using the Consumer Price Index.
Another interesting conclusion reached by the CJC is the convergence between National band 1 and band 2/3. The CJC have considered this convergence and whilst the recommended rates demonstrate this, the CJC have maintained a distinction between the two. Furthermore, the CJC has highlighted that numerous areas of the country had previously not been formally allocated to a band and the report suggests the areas which should be rightfully allocated to a banding.
However, it should be noted that these rates are still subject to consultation and the CJC are requesting further input before the recommendations are formally submitted to the Master of the Rolls in the summer.
Whilst these recommendations are welcome news for many firms up and down the country, it is important to note that these rates will not be applicable immediately should the rates be approved by the Master of the Rolls. This is because the indemnity principle will still be applicable and restrict firms from claiming rates in excess from the rates contained within their retainer with the client. In order to take advantage of the recommendations it is now important for firms to consider their existing retainers with their clients and check that there are terms that allow for the firm to review their hourly rates and then provide notice to the client that the hourly rates will be increased.
For more advice on how to update the hourly rates within a retainer please feel free to get in touch and we can help you.
The report can be found here.
Please note: the consultation period closes at 4pm on Wednesday 31 March 2021. Comments/information received after that time and date will not be considered.
To respond to the consultation click here.
For further information, please contact Kris Kilsby here.