The Master of the Rolls has announced guideline hourly rates (GHRs) are to be frozen at their 2010 levels indefinitely as there is no prospect of proper evidence being produced to justify a revision.
This may not be entirely bad news for claimant lawyers as it was widely anticipated any revision would be in a downward direction.
On the other hand, what role now for GHRs? Dyson statement noted:
“They remain an integral part of the process of judges making summary assessments of costs in proceedings. They also form a part, even if only a starting reference point, in the preparation of detailed assessments. They also provide a yardstick for comparison purposes in costs budgeting.”
Without any amendments to the published rates, over time they will inevitably be given less and less weight on assessment. Claimant solicitors will inevitably seek to argue the rates should be uplifted. They will face the obvious problem that they cannot simply seek to ask the court to increase the rates in line with inflation. That is the approach the Master of the Rolls has positively rejected. Further, the payment of referral fees was one of the justifications previously put forward in a GHRs review as to why claimant hourly rates were higher than those charged by defendants. With referral fees now banned, guideline rates are arguably to high. This was the logic used to reduce fixed fees in low value RTA claims.
The one inevitable outcome of all this is more uncertainty and more satellite litigation. If individual judges increasingly department from GHRs, but not based on any empirical evidence, how are parties to predict what might or might not be allowed? For all the flaws with GHRs, at least they provided a useful guide as to what the starting point. If this is lost, what is the alternative?
Lord Dyson’s answer, in part, is to continue pressing the government to extend the use of fixed fees. Solicitors may come to regret not taking part in the GHRs survey when they had the chance.