Guideline hourly rates: increases move closer to implementation?

Earlier in the year, the Civil Justice Council consulted on a range of increases to Guideline Hourly Rates (GHRs) for solicitors. The proposals put forward for consultation in an interim report amounted, on average, to increases of between 14% and 20% (by grade of fee-earner) when compared to GHRs last set in 2010. On July 31 the CJC released its final report, a post-consultation analysis, the most important recommendation of which is likely to be that ”The Guideline Hourly Rates proposed in the Interim Report should be implemented in full.”

As was the case with the interim report/consultation, the final report released on Friday is a lengthy and detailed analysis and runs to more than 100 pages. The somewhat predictable and polarised nature of the debate on GHRs is captured in this preliminary observation: “It would not be unfair to summarise the responses from receiving and paying parties by saying that the former argued that the proposed GHRs were insufficient … the latter that they were based on totally flawed methodology and that no increase was warranted or, indeed, that the present GHRs were too high.

The final report deals in detail with the principal objections raised against the interim report from all sides and has “concluded that, though capable of some valid criticism, it [the interim report] is the best available in all the circumstances and is a sufficiently sound basis on which to make recommendations.” It follows that the CJC group is very definitely sticking to its guns.   

Unfortunately, there is little of comfort here for the legacy insurance market in particular, in the sense that any increases in GHRs will increase financial liabilities for historic risks. The report does acknowledge the sector but it seems there is nothing it can do: “IRLA noted that the increases would have a substantial impact upon them, for example where there are Conditional Fee Agreements in mesothelioma claims and in their bulk legacy claims, primarily noise-induced hearing loss with a low value but exempted from Fixed Recoverable Costs. The working group is not able to take account of such factors. Legacy claims, their funding and lack of inclusion in Fixed Recoverable Costs, have been the subject of specific policy decisions which cannot affect recommendations on GHRs.

Those recommendations – the main one noted above being, in effect, ‘just do it’ – are addressed to the Head of Civil Justice / Master of the Rolls and to the Rule Committee. Although the MR’s comments in the CJC brief press release which accompanied publication steer a very neutral course at this stage, my sense is that the final report brings implementation of the proposed increases to GHRs (and of the adjustments to bands and grades) a good deal closer. It is possible that the changes could be in place before the end of this year or by early 2022.

Written by Alistair Kinley, Director of Policy and Government Affairs at BLM

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