Page 24 - PIC Magazine Autumn Issue 16

Guideline Hourly Rates:
Why now?
The efforts of the current CJC working group are not, of course, the first time that the 2010 GHRs have been reviewed.
In May 2014, the Civil Justice Council Costs Committee, chaired by Mr Justice Foskett (as he then was), reported to
the Master of the Rolls after attempting a “comprehensive evidence-based review” of GHR3. The Committee relied upon different sources of data, including its own survey. However, responses to the Committee’s survey were limited: only 148 completed responses were received. In his foreword to the Report, Foskett J described the response
rate to the survey as “poor”, and that the Committee’s recommendations could “only be as good or as valid as the quality of the evidence at [their] disposal”.
New rates were recommended by the Committee but were rejected by the then Master of the Rolls (Lord Dyson)4. He could not accept the recommended rates because “the evidence on which [the] recommendations [were] based [was] not a sufficiently strong foundation on which to adopt the rates proposed”5. The “shortcoming in the evidence”, said the Master of the Rolls, was “fundamental”.
Desire for change therefore, but a lost opportunity because of the insufficiency of evidence. Practitioners had only themselves to blame.
Demands for change were given fresh impetus by the widely-reported decision of Mrs Justice O’Farrell in Ohpen Operations UK Limited v Invesco Fund Managers Limited [2019] EWHC 2504 (TCC), handed down on 24 September 2019. The decision concerned the summary assessment of the defendant’s costs of a half-day interlocutory application in which the Court, after considering whether the claim had
been issued in breach of a contractually agreed dispute resolution procedure, stayed the proceedings to allow a mediation to take place.
It was argued by the claimant that the defendant’s costs were unreasonable, in part because
“the hourly rates of the defendants’ solicitors [were] unreasonably high, particularly when compared against the Senior Courts Costs Office (“SCCO”) guidelines rates6”.
up, down or just about right?
Matthew Waszak of Temple Garden Chambers reports.
INTRODUCTION
Protest at the inadequacy of using guideline hourly rates (GHRs) at detailed assessment has become an all too familiar argument made by receiving parties in costs proceedings.
In December 2019, the ACL’s survey at its Manchester Conference showed a consensus for change amongst practitioners1. Of the 72 costs lawyers who responded,
60% said that a review of GHR was “urgent”, while a further 26% said that a review would be “helpful”2.
Such a review is now firmly in motion. The minutes from
the March 2020 meeting of the Civil Procedure Rules Committee recorded the formation of a Civil Justice Council (CJC) sub-committee. The sub-committee/working group, led by Mr Justice Stewart, will conduct an evidence-based review of the basis and amount of GHRs, and make recommendations to the CJC and Lord Justice Coulson, the Deputy Head of Civil Justice. Its aim is to circulate its recommendations in a draft report, ready for consultation, by the end of 2020.
But why a review now? And what might the review achieve?
1. See the ACL’s article at: https://www.associationofcostslawyers.co.uk/%2FPress-Releases/ costs-lawyers-call-for-review-of-guideline-hourly-rates
2. See the ACL’s article at: https://www.associationofcostslawyers.co.uk/%2FPress-Releases/ costs-lawyers-call-for-review-of-guideline-hourly-rates
3. Report to the Master of the Rolls: Recommendations on Guideline Hourly Rates for 2014, May 2014- available online at: https://www.judiciary.gov.uk/wp-content/uploads/2014/07/ghr-final-report.pdf
4. See Master of the Rolls, Guideline Hourly Rates, 28 July 2014, available online at: https://www.judiciary.uk/wp-content/uploads/2014/07/ghr-mor-decision-july2104.pdf
5. See Master of the Rolls, Guideline Hourly Rates, 28 July 2014, available online at: https://www.judiciary.uk/wp-content/uploads/2014/07/ghr-mor-decision-july2104.pdf
6. See the judgment at [13(ii)]
7. See the judgment at [14]
8. See the ACL article at: https://www.associationofcostslawyers.co.uk/%2FPress-Releases/ costs-lawyers-call-for-review-of-guideline-hourly-rates
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