Increase to Guideline Hourly Rates
Guideline Hourly Rates are the guideline figures Solicitors can charge per hour for recoverable work carrying out a summary assessment of court costs. These rates are set by the Master of the Rolls and the HM Courts & Tribunals Service.
The Master of the Rolls recently approved an increase to Guideline Hourly Rates proposed by the Civil Justice Council in their report ‘Guideline Hourly Rates Working Group for Consultation’.
This increase has been long awaited as the previous Guideline Hourly Rates had been in place unchanged since 2010. There are many factors that influence how much Solicitors charge for the work they do such as inflationary pressure, business overheads and salary increases compared to profitability. These factors increase in cost and pressure year on year meaning Guideline Hourly Rates need to increase in line to keep the commercial viability of law firms.
Here is a quick comparison of the changes from the old to new guidelines:
| Old (2010) | Grade A | Grade B | Grade C | Grade D | New (2021) | Grade A | Grade B | Grade C | Grade D | |
| London 1 | £409 | £296 | £226 | £138 | London 1 | £512 | £348 | £270 | £186 | |
| London 2 | £317 | £242 | £196 | £126 | London 2 | £373 | £289 | £244 | £139 | |
| London 3 | £229 – £267 | £172 – £229 | £165 | £121 | London 3 | £282 | £232 | £185 | £129 | |
| National 1 | £217 | £192 | £161 | £118 | National 1 | £261 | £218 | £178 | £126 | |
| National 2 | £201 | £177 | £146 | £111 | National 2 | £255 | £218 | £177 | £126 |
The new guideline hourly rates can apply to all work conducted from 01/10/2021. It is important to note that these rates are not retrospective, so any work performed before this date is still subject to the old 2010 guideline hourly rates as a starting point for assessment.
As you can see the rates for every grade of fee earner in every location have increased, some by upwards of 30%. This should benefit Claimant firms in enabling higher hourly rates to be claimed within bills of costs and higher hourly rates to be recovered at Provisional Assessment and Detailed Assessment Hearings. A key piece of information to remember is that the court confirm the newly proposed guideline hourly rates are still ‘the starting point’ in deciding on what hourly rate should be recovered at assessment. A quote from Master James that sticks with me: “Guideline rates are exactly that, guidelines not tramlines”. Divergence from guideline rates is always on the table, this means that recovery of enhanced rates will still be commonplace however likely to a smaller extent than previously.
It is likely to be a while before we see claims being settled that were incepted after 01/10/2021 or have most of the work incurred post this date. One area of costs in which we could see an instant difference is costs budgeting. When setting the future estimated costs within a Precedent H Costs Budget, all work will now been incurred post-01/10/2021. As such this will mean the new increased guideline hourly rates can apply. This is something to bear in mind when attending CCMC hearings as we need to factor in the new higher rates to the budgeted estimated costs.
All live claims as of today will have most work incurred pre-01/10/2021 but Claimant firms can still use the increase in guideline hourly rates as a negotiation tool right now. The new guideline rates can assist to show the 2010 guideline rates are too low and out of date given the new increases now allowed across the board. This should help in the short term and benefit Claimant firms more until we start to deal with more work post-01/10/2021 in bills of costs.
In summary the implementation of the new guideline hourly rates applies to all work conducted after 01/10/2021 but can be used as a negotiation tool for any work incurred before this date. We should see a general increase across the board in the level of rates firms are able to recover which should benefit all Claimant firms. Enhanced rates are still likely to be achieved on most cases, especially the higher value more complex circumstances. However we anticipate the paying party is still expected to argue for guideline rates with no enhancements on most claims.
When instructing PIC at any stage of a costs claim, be it budgeting, drafting or negotiations we will factor in the new Guideline Hourly Rates where applicable and use them as a negotiation tool to maximise costs recovery.
If you need clarification or further advice on any points raised in this article please do not hesitate to ask, we will be happy to assist.
Will Knowles, Legal Costs Negotiator
04.11.21