In a recent libel case, the High Court clarified the judiciary’s approach to contingencies within budgets. In the dispute, contingencies accounted for around 10 per cent of both sides’ future estimated costs.
Where the Court orders a party to pay costs subject to a detailed assessment it will order that party to pay a reasonable sum on account of costs unless there is a good reason not to do so. Such power is not dependent upon the filing of a statement of costs, nor the type of funding arrangement in place
Master of the Rolls’ decision and Committee’s report on Guideline Hourly Rates
The Master of the Rolls has published his response to the Civil Justice Council Costs Committee’s comprehensive report on Guideline Hourly Rates, rejecting the committee’s findings and determining there should be no change to the guideline hourly rates which were last updated in 2010 due to an in sufficiently strong foundation of evidence. He did however accept several of the Committee’s recommendations, including that:
- There should not be an additional Grade A star
- Separate GHR bands specific to specialist fields of civil litigation should not be introduced
- Separate rates should not be introduced for detailed assessments of costs, but that there should be greater flexibility in detailed assessments than would ordinarily be shown in summary assessments
Two positive changes which will be introduced in October 2014 are that:
- Grade A fee earners will include Fellows of CILEX with 8 years’ post-qualification experience
- Costs Lawyers who are suitably qualified and subject to regulation will be eligible for payment at GHR Grades C or B, depending on the complexity of the work
The Civil Justice Council’s Costs Committee have launched their survey into guideline hourly rates.
The participation of “every law firm in England and Wales” is encouraged to ensure that the evidence base is as comprehensive as possible. The survey is available for completion until 29 November. Chair of the Committee, Mr Justice Foskett, has urged firms not to ignore the survey, speaking on Litigation Futures….
“The objective is to create as accurate a picture as possible of salaries and hours charged (and amounts recovered) for all fee-earners, from trainees to senior partners nationwide….
“In a busy world it is always tempting to ignore a survey or questionnaire. However, we have tried very hard to keep the survey short and clear, with questions that can be answered by reference to a firm’s most recent annual report and accounts together with its costs management system.
“My message to all firms engaged in litigation is that this is a real opportunity to contribute to an exercise designed to provide a reliable evidence base upon which to make our recommendations. Criticising the outcome will be somewhat hollow if the critic has not completed the survey.
“My final plea, therefore, to all litigation solicitors is this: don’t ignore it.”
Find the survey here.
The committee reviewing the guideline hourly rates – which were last increased in 2010 – is set to issue a short call for evidence next month and it is vital that practitioners participate in the process, the Association of Costs Lawyers has warned.
The Civil Justice Council hopes to issue a call for evidence at the beginning of November, with a deadline of the end of the month for responses.
See the full Litigation Futures article.
The Civil Justice Council Costs Committee has released a synopsis of its second meeting which took place on 6 June 2013 to start work on its review of the guideline hourly rates.
The discussions centred on eight surveys, including the Firms’ Finance Survey 2011 and the Practising Certificate Holders Survey 2012. It was agreed that the work of the Committee should focus first on the four different groups of data required relating to expense of time, namely:
- Grade of fee earner and region
- Salary for each level offee earner
- Chargeable hours perfee earner/region
- Overhead costs, allocated per fee earner/region.
The synopsis said that using regularly conducted surveys had the advantage of allowing the benchmark for salaries, chargeable hours and overheads to be reassessed as those surveys were repeated in future years.
Having worked out the costings under these headings, the Committee will move onto the more sensitive task of factoring in a suitable profit margin. The Committee also discussed the possible availability of data from other sources,such as CILEX,the ABI and others.
The next tasks of the Committee will be to agree the contents of its own survey, and the method of inviting the submission of evidence from bodies such asthe LSLA, APIL, MASS, FOIL and NHSLA, and to consider ways of encouraging as wide a response as possible from solicitors’ firms.
The Committee aims to meet again in late July.
The Master of the Rolls has received a recommendation from the Advisory Committee on Civil Costs on an increase to the Guideline Hourly Rates for 2011.
The Committee has recommended an earnings related increase for 2011, but the Master of the Rolls has asked the Committee to seek additional information and provide further evidence to allow him to make a more considered decision.
In the meantime, and until further notice, the Guideline Hourly Rates for 2010 will continue to be applied.
A Costs Officer conducting a detailed assessment on a standard basis was not precluded from considering whether the claimants’ costs should be limited to those recoverable under stages 1 and 2 of the Pre-Action RTA Protocol where there was a consent order in which the defendant agreed to pay the claimants reasonable costs.
Costs that are disallowed for want of retainer should not factor in the calculation of the one fifth rule.
HHJ Simon Brown QC, the pioneer of costs budgeting, has given instant reward for keeping within a court approved budget, with a summary assessment of costs in the sum of £351,000 payable within 14 days.