December is always a time of quiet reflection on what has been and a time to look forward to what could be. It is beyond doubt that 2023 has seen one of the most significant changes in the legal profession for a while with the implementation of the extension of the Fixed Recoverable Costs regime. It is certainly too early to tell the specifics of the impacts that it will have but it can be safely stated that the impacts will be felt far and wide.
With such a seismic change come opportunities. Now more than ever, taking a moment to pause and reflect on the changes can provide the breathing space to identify those opportunities. Below I take a look at just some of aspects to consider in the coming year.
A new year – a new set of Guideline Hourly rates
One of the early Christmas gifts that arrived down the chimney was the confirmation from the Master of the Rolls that he has accepted the Civil Justice Council’s recommendations. The recommendations are in respect of implementing an increase in the Guideline Hourly Rates to reflect the SPI rate. Not only has this been confirmed to be effective from 1st January 2024, but it has been confirmed that there will be annual reviews which will incorporate further inflationary increases to the Guideline Hourly Rates.
The new rates that are effective from 1st January 2024 are below:
|Solicitors and legal executives with over 8 years’ experience
|Solicitors and legal executives with over 4 years’ experience
|Other solicitors or legal executives and fee earners of equivalent experience
|Trainee solicitors, paralegals and other fee earners
The 2021 Guideline Hourly Rates are included in brackets.
As a result, it should be every fee earner’s new year’s resolution to review their retainers. The new rates will not apply simply as of right. If you have a retainer which is set at the 2021 Guideline Hourly Rates then you will be limited to these rates as a result of the indemnity principle. It is therefore necessary to review the retainers to ensure that: firstly, the retainer provides for the hourly rates to be increased, and secondly to ensure that the client is notified that the rates will be increased. Only once the client has been notified of the increased hourly rates will the new rates be effective.
It should also be borne in mind that the Master of the Rolls has also greenlit a working party to conduct a review into the methodology used to calculate the guideline hourly rates. It tis therefore something that requires a watching brief next year.
The Extension of the Fixed Recoverable Costs Regime
In October this year the last remnant of the Jackson Review was implemented with the new Intermediate Track introduced to the CPR. The introduction has resulted in a lack of clarity and a number of unanswered questions are bound to result in satellite litigation in 2024 and beyond. For instance, one aspect that is highly likely to lead to numerous headline grabbing decisions is how the Courts will allocate cases to the different complexity bands within the Intermediate Track. The definitions provided within the rules are reliant on each other with the only source of clarification will be through judicial comment.
Furthermore, it is anticipated that only 6 months after the implementation of the extension of the Fixed Recoverable Costs regime there will be updates made to the rules from April 2024 onwards. These are likely to relate to the main issues consulted upon by the Ministry of Justice in August and September 2023 including the costs of assessment in fixed recoverable costs disputes and the inclusion of clinical negligence claims within the intermediate track.
In respect of clinical negligence claims it is anticipated that there will be delays to the implementation of the Department of Health and Social Cares proposals for fixed costs for clinical negligence claims valued at less than £100,000.00.
50 years of the Solicitors Act 1974
Next year will mark the ‘golden’ anniversary of the Solicitors Act 1974 and even at the grand age of 50 the provisions held within the Solicitors Act are more relevant to practitioners than ever before.
Partly engaged in managing disputes between solicitors and their clients, the Solicitors Act has long been relatively dormant in respect of costs due to prevalence of inter partes recovery or legal aid provision. However, as these avenues continue to be limited, reduced and capped, it ultimately results in solicitors turning to their own clients in respect of recovering shortfalls in respect of costs.
Unfortunately, the Solicitors Act provisions are not the simplest or most streamlined to assist in resolving any disputes that may arise and arguably unfit to meet the increasing number of disputes that are being brought. It is unlikely that there will be primary legislation to update the contents in the near future, therefore, it is wise to become well acquainted with the provisions.
Kris Kilsby is a Costs Lawyer at Paramount Legal Costs and a Council member of the Association of Costs Lawyers. For any further questions or queries about costs and costs budgeting please get in touch at [email protected]