Fixed success fees have been in place for “disease” claims since 1 October 2005. It is therefore surprising that it was not until 2012 that any serious consideration was given as to which claims fell within the scope of the fixed success fee regime (see Fountain v Volker Rail Limited, Bird v Meggit Aerospace Limited and Patterson v Ministry of Defence [2012] EWHC 2767 (QB)).

The leading case of Patterson concerned an unusual non-freezing cold injury. The area of real importance is whether Noise Induced Hearing Loss (NIHL) claims are disease claims for the purposes of the rules. Traditionally such claims have been viewed as “disease” claims. The problem arises because the rules themselves do not define “disease”.

There are currently a growing number of decisions at first instance where the courts have concluded that NIHL is not a “disease”, including Mansfield County, Sheffield County Court and Harrogate County Court. Although a binding decision is still awaited, there is an increasing wiliness by the judiciary to adopt a narrow interpretation to the word.

Despite the disappointment that no new Guideline Hourly Rates have been published, the recent review has finally killed off the argument that Guideline Hourly Rates are of no relevance to detailed assessment and are designed purely for summary assessments on the fast track.

The Costs Committee stated of the GHRs they are:

“primarily a guideline rate for summary assessments and a starting point for calculating rates in detailed assessments”

and:

“The GHR are themselves guidelines and a benchmark for summary assessments. As such, they may provide a helpful starting point in the detailed assessment process, but no more than that.”

The Master of the Rolls wrote:

“It is also important to emphasise the the guidelines were originally intended to be broad approximations of actual rates in the market.”

This is key, the GHRs are intended to reflect the rates that solicitors actually charge in different localities. They were never intended to reflect only what solicitors charge for fast-track litigation (£409 per hour anyone?). Much less was it ever suggested that solicitors charged their clients different hourly rates, for example, for interim hearings where the court dealt with the costs by way of summary assessment as opposed to deferring the matter to detailed assessment.

David Greene, a member of the CJC Costs Committee, writing in the New Law Journal stated:

“GHRs apply largely to fast track and multi track litigation outside the fixed costs regimes. … Further while GHRS were originally introduced to assist judges with summary assessment they had become the cornerstone for all assessment.”

The Master of the Rolls concluded:

“GHRs are needed to guide summary and detailed assessment of costs.”

They are a starting point for both. Nothing more, nothing less.

A further interesting issue arises as to Costs Lawyers being potentially classified as Grade B fee earners (from October 2014). This is as a result of the wording used by Lord Dyson and in the original report recommendation.

To achieve Grade B status as a solicitor or Fellow of CILEX requires a combination of qualification (solicitor or Fellow of CILEX) and experience (over 4 years PQE).

Although we wait to see whether any further guidance will be published, the Costs Committee Report contained the following recommendation:

“The ACL provided evidence giving details on the qualification route, continuing professional development and regulatory framework for Costs Lawyers. The Committee agreed, and determined that the following approach should be adopted for those Costs Lawyers who are suitably qualified and subject to regulation under the Legal Services Act 2007 to undertake reserved legal activities:

(i) For budgeting and bill drafting, save in exceptional circumstances, Costs Lawyers should sit within the grades for Grade C and D fee earners;
(ii) For practising litigation and advocacy, save in exceptional circumstances, costs lawyers should sit within the grades for Grades C or B.”

Lord Dyson accepted the recommendation with these words:

“Costs Lawyers who are suitably qualified and subject to regulation be eligible for payment at GHR Grades C or B, depending on the complexity of the work”

Neither the Report nor Lord Dyson’s words make any comment on experience. Taken together it seems to suggest that a newly qualified Costs Lawyer could attract Grade B status for advocacy if the case was sufficiently complex.

It is, of course, important to recognise that there is a distinction between formal status and the rates that would be justified on assessment. A solicitor of 20 years PQE would clearly fall within Grade A status but would struggle to justify Grade A rates for dealing with a low value RTA. Equally, a non-qualified paralegal might fall firmly within Grade D status but be able to justify rates similar to a Grade A if they were punching considerably above their weight dealing skilfully with a complex clinical negligence claim.

The Report itself recognised this issue:

“The current situation is rather ambiguous; many Costs Lawyers will be bracketed for most work in Grade D, but the criteria for the grades is sufficiently flexible for Costs Lawyers to submit for fees at Grade C and occasionally Grade B where the complexity of the work and the experience/expertise to undertake the work warrants it.”

The strange result of the Report and Lord Dyson’s acceptance of this recommendation is that it appears to have blurred the lines between status (as a matter of definition) and what rates can be justified. It should be a matter of definition as to whether a Costs Lawyer is a Grade B, C or D. It should be a matter of argument as to what rates are reasonable. What we have to date appears to make status an entirely subjective test.

Congratulations to Master Gordon-Saker who has been appointed as Senior Costs Judge with effect from the beginning of October.

He has timed this perfectly as the next couple of years should be a relatively calm period in the costs world and this will allow him to ease himself gently into the new role.