Guideline Rate Changes Approved and to be Implemented

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Posted on: August 24th, 2021 by Brett Anderson

As many will be aware, there has been considerable pressure from within the judiciary, as well as from the legal industry generally, for revisions to long out-dated Guideline Hourly Rates (“GHRs”). The Civil Justice Council (CJC) formed a working group under the stewardship of Mr Justice Stewart which consulted upon potential revisions and published its recommendations in a final report in July 2021.

The Master of the Rolls, Sir Geoffrey Vos, confirmed on Friday (13 August 2021) that the proposals of the Civil Justice Council (“CJC”) working group will be implemented in full on 1 October 2021 to include the proposed uplift in the guideline rates.

The headlines will, rightly, be written about the revised rates which have seen significant uplift from the position last set in 2010.  The new rates are detailed below for reference.

There are though some other more subtle changes being introduced which are worthy of note too. These include the eradication of National Band 3, revision of what constitutes “London 1”, revisions to the information required on an N260 form and the clarification of the boundaries for National Band 1.

The removal of the distinction between the costs chargeable for conducting litigation in National 2 and National 3, which was almost zero by reference to the 2010 GHRs, is no surprise. The question is how long the distinction between National 1 and National 2 remains as the differentials are minimal. I suspect that come the next review National 2 will become an antiquated reference, lost to the mists of time too. I do wonder though if the expense of conducting litigation in Hull, St Helens and Barrow-in-Furness really is the same as Guildford, Maidstone and Winchester and, if not, why this is no longer felt worthy of reflection in solicitors’ fees?

The centres included in National 1 and National 2 have been clarified and simplified so that all Courts are now covered, removing the debate surrounding several Courts that weren’t properly defined in the previous banding of the Courts.  The only question now remaining to my mind is why is Hertfordshire considered National 2 when all around are National 1? Does someone on the CJC not like Stevenage and St Albans?

The change to London 1 will reflect the nature of the work being undertaken rather than a geographical area of the financial district that is “the city” is a move that London firms will welcome. Central London firms undertaking the heavy city work will now be able to justify more readily the rates the work reflects. Conversely, those undertaking general litigation from City offices will find it increasingly difficult to attract the London 1 rates. Whilst my experience is that such an approach was being adopted in the assessment of rates at the SCCO in any event, it will serve well to have this reflected in the Guideline rates to ensure this is adopted more broadly.

Throughout the report there is a significant ‘nod ‘to changes in working practices which will unquestionably impact on how legal services are costed in the future. With so many firms now working in an ’agile’ way, the true expense associated with undertaking litigation from a particular location is being distorted. This was acknowledged by the Master of the Rolls in approving the CJC’s recommendations but indicating a further review within 2-years should be undertaken. It is also reflected in changes to the N260 (Schedule of Costs for Summary Assessment) which, from 1 October 2021, it will be a requirement to specify both the GHR Grade for each Fee Earner and the location of the office from which Fee Earner operates from.

To me, the changes are the retrospective formalising and implementation of what has been seen in the decisions of the judiciary over the recent years and, to some extent, aren’t forward thinking enough to reflect the shift in working practices witnessed during the pandemic. I have no doubt, we shall see the Costs Masters and Judges wrestle with new arguments as to rates before the next review is upon us so, whilst this guidance is welcome, hourly rates will remain a fertile battlefield.

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%) £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%)
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