We have recently seen another case in the Senior Courts Costs Office (SCCO) which has considered the 2010 guideline hourly rates, and questioned whether they can be relied on in cases throughout 2020 and beyond.
The case of PLK & Ors (Court of Protection: Costs)  EWHC B28 (Costs) considered SCCO Guideline Hourly Rates against the impact of inflation in cases today. This case was a Court of Protection case, and so there was no paying party disputing the basis or level of costs. Still, the Court considered the hourly rates claimed.
In this case, the SCCO consolidated the assessments in four cases that were chosen to represent the costs claimed by Deputies in different parts of England, in the management of the affairs of protected parties who had sustained significant brain or birth injuries. It was argued by the Deputies that the Court’s approach in Assessments of Costs to rely largely on Guideline Hourly Rates set in 2010 was unjust, and did not take into account the commercial realties of 2020.
Current guideline hourly rates 2010
The guideline hourly rates 2010 (current) are:
|Pay band||Fee earner||London grade 1||London grade 2||London grade 3||National grade 1||National grade 2||National grade 3|
|A||Solicitors and legal executives, 8+ years’ experience||£409||£317||£229 – £267||£217||£201||£201|
|B||Solicitors and legal executives, 4+ years’ experience||£296||£242||£172 – £229||£192||£177||£177|
|C||Other solicitors, legal executives or fee earners of equivalent experience||£226||£196||£165||£161||£146||£146|
|D||Trainee solicitors, paralegals and other fee earners||£138||£126||£121||£118||£111||£111|
The Deputies argued the Court should utilise a more flexible approach and referred to CPR 44.3(3). They accepted that the Guideline Hourly Rates should be used as merely “a starting point” in assessing the hourly rates. The Guideline Hourly Rates were last revised in 2010 and their use, without reference to inflation and increased expenses since that period, was incorrect and unjust.
Master’s call for an empirical uplift
Master Whalan was not convinced that firms carrying out Court of Protection work had experienced a significant increase in hard and soft overheads.
However, the Master did find that the Guideline Hourly Rates should be used as a “starting point”, and then an empirical uplift should be applied to reflect the incidence of inflation between 2010 and 2020. He accepted that he had no power to review or amend the GHR, either formally or informally, as this role is the exclusive preserve of the Civil Justice Council.
However, he still was still “satisfied that in 2020 the GHR cannot be applied reasonably or equitably without some form of monetary uplift that recognises the erosive effect of inflation and, no doubt, other commercial pressures since the last formal review in 2010.”
This is another case in a line of cases from the SCCO, which has considered the current guideline hourly rates and decided that they cannot be applied justifiably without an uplift that recognises the effect of inflation. This is a good result for receiving parties as Courts are accepting that the GHRs should now generally be updated to allow for inflation. There was previously resistance to that, but the Costs Masters at least seem to be accepting that they are now badly out of date.
Work on revising the 2010 rates is underway but this ruling may bring early pressure to bear on rates that many expect will rise following the Civil Justice Council review. So watch this space…