The Master of the Rolls, Sir Geoffrey Vos, has approved the new guideline hourly rates (GHR) proposed by the Civil Justice Council’s GHR working group.
This is the first change to the GHR since 2010. Some would argue long overdue and realistic, others would argue premature and generous, depending whether they sit on the claimant or defendant side of the fence.
The new GHR are as follows:
|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%0||£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%)|
A revised Guide to the Summary Assessment of Costs has been produced, which it is planned will come into force from 1 October 2021.
In its final report at the end of July, the CJC’s GHR working group, chaired by Mr Justice Stewart, made no significant changes to the interim recommendations it issued in January, which called for “modest” increases in the GHR, ranging from 7% to 35% (see table above).
The other key changes include amending the London 1 and London 2 rates to reflect the work done, rather than whether or not firms were in the City, making London 1 primarily be for very heavy commercial and corporate work and London 2 for all other work.
The National 2 and 3 bands will be merged into a single band and those parts of the country not currently allocated to a band will be put into one.
The Master of the Rolls, Sir Geoffrey Vos, said:
“I am grateful to the CJC, Mr Justice Stewart, and his entire working group for this report.
“The published guideline rates have been static for too long and this needed to be addressed. I am satisfied with the evidence and arguments set out by the working group. I plan to implement all the recommended changes from Friday 1 October 2021 and to that effect I have asked my Officials and Master Gordon-Saker, Senior Costs Judge, to take forward the publication of the revised guide to summary assessment.
“I am grateful to those who have taken the time to write to me about this work, particularly those who have raised concerns during the consultation process in respect of likely changes to working practices following the pandemic. Whilst I think there is likely to be merit in their concerns, I do not think that this should delay the necessary update of what is ultimately an advisory guide. I have, however, agreed with the Civil Justice Council that there will be a further review of guideline hourly rates reporting within 2 years.”
As stated by Sir Geoffrey, there is to be a further review of the GHR within 2 years to take account of changing working practices (e.g. increased remote and hybrid working) brought about by the pandemic. Claimant bodies will undoubtedly press for further increases, particularly if the rate of inflation and cost of living continue to rise, while defendant bodies will argue for reductions or a freeze on the basis that the overheads of claimant law firms have reduced through remote and hybrid working.
The full Courts and Tribunals Judiciary publication, including the new draft Guide to the Summary Assessment of Costs 2021 can be accessed here.
We could see claimants’ solicitors’ costs on multi-track hourly rate cases increasing by 15% to 20% across the board as a result of the new GHR. Insurers and other defendant organisations will need to review and increase their reserves accordingly on any impacted cases.
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