Following the introduction of increased hourly rates from 1 January 2026, please see my blog below setting out the new rates and what that will mean going forward.
Tag: guideline hourly rates
Complexity pays – securing hourly rates in excess of guideline rates
Introduction
The case of Micula & Ors v Romania [2024] EWHC 3566 (SCCO) involved the enforcement of an arbitral award issued by the International Centre for Settlement of Investment Disputes (ICSID). The issue of hourly rates charged by legal professionals was a central point of discussion in the judgment, focusing on the importance of the complexity of the matter in determining the appropriate hourly rate to award.
Background of the case
Micula & Ors v Romania involved the enforcement of an arbitral award issued by the ICSID. The Claimants were investors who were eligible for a tax incentives scheme, and the Defendant, Romania, had repealed the scheme. To compensate for the damage sustained from the repeal of the scheme, the Micula brothers requested the establishment of an arbitral tribunal under the ICSID convention and, in 2013, an arbitral award of EUR 178 million was awarded to the Claimants in compensation for the repeal. The Claimants subsequently took steps to enforce the arbitral award.
The decision regarding the hourly rates and legal costs
The issue of costs recovery in respect of the enforcement proceedings was heard before Costs Judge Leonard in the Senior Courts Costs Office (SCCO). The hourly rates charged by the Claimant’s legal team were considered and discussed in relation to the complexity of the case and the expertise required.
The Costs Judge considered CPR 44.4 (3) to highlight the ‘factors to be taken into account in deciding the amount of costs’, and he suggested that the application of hourly rates should be grounded on the circumstances of the claim. He noted that the work was undertaken between 2014 and 2017 when guideline rates had not increased since 2010, claiming that during this time they were of less value as a starting point in any context, much less a detailed assessment, indicating that the hourly rates claimed were to be analysed based on other factors alongside the guideline rates.
Moreover, Costs Judge Leonard then referred to Choudhury J in Powerrapid and emphasised that the Master of the Rolls had made clear that guideline rates were no more than a guidance and a starting point for judges undertaking summary assessment, and a possible helpful starting point on detailed assessment.
It was made clear by the Judge that facts such as international elements, value, and importance may justify significantly higher rates. The Costs Judge also explained that Choudhury J himself accepted that whether guideline hourly rates were helpful as a starting point was a matter for the Costs Judge, having regard to the relevant circumstances. However, it was also mentioned that increased hourly rates claimed later in the bill were excessive beyond what could be awarded, making clear that the rates must remain reasonable and proportionate.
Ultimately, the Costs Judge allowed an hourly rate at a maximum of £700 per hour for Grade A, £500 per hour for Grade B, £380 per hour for Grade C and £200 per hour for Grade D. In reaching this decision, the Costs Judge concluded that it was a “complex case with substantial international elements” meaning that the case was “top end” for commercial litigation and required the skill, effort and responsibility undertaken by the receiving party’s solicitors to also be top end of the scale.
Conclusion
The Micula & Ors v Romania case underlines the significance of considering the circumstances of a case when determining the appropriate hourly rates. It provides insight into the approach adopted when assessing hourly rates and it sets out the key components that are taken into account by the Costs Judge at detailed assessment.
Angela Nako is a Paralegal in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com
Guideline Hourly Rates in the Court of Protection
As you may be aware, the Master of the Rolls has accepted the recommendations of the Civil Justice Council Costs review. As per the recommendations, the Master of the Rolls has confirmed that ‘the 2021 Guideline Hourly Rates will be uplifted for inflation from 1 January 2024 in accordance with the Services Producer Price Index.’ The guideline hourly rates will then be uplifted annually by the Services Producer Price Index.
The new hourly rates are as follows:
The increase is approximately 6-7% depending on your geographical location.
What impact will the new Guideline Hourly Rates have on Court of Protection?
The new guideline hourly rates will come into effect from 1 January 2024. In order to ensure that COP Practitioners are able to claim these within bills, it is imperative that all retainer letters and client care letters are updated to reflect the new hourly rates. Without this paperwork, the practitioner will be unable to claim the new hourly rates as they would be in breach of the indemnity principle.
The indemnity principle states that ‘a successful party cannot recover from an unsuccessful party more by way of costs than the successful party is liable to pay his or her legal representatives’. When applied to Court of Protection costs, this means a Deputy cannot claim costs higher than those stated in their client care letter or retainer letter. Therefore, we recommend that all paperwork be updated to reflect the new guideline hourly rates in advance of 1st January 2024.
Please be aware that the retainers cannot be backdated, and therefore the rates cannot be claimed prior to 1 January 2024. It is also the case that if the client care letters are updated post 1 January 2024, the guideline hourly rates cannot be claimed prior to the date of the updated client care letter.
If you have any queries you can contact Laura Sugarman at Laura.Sugarman@clarionsolicitors.com for further information.
Uplifted Guideline Hourly Rates from 1 January 2024
It has today been published that the Master of the Rolls has accepted the recommendations of the Civil Justice Council Costs Review, which was published in May 2023.
The 2021 Guideline Hourly Rates will be uplifted as of 1 January 2024 in accordance with the Services Producer Price Index (SPPI). The Guideline Hourly Rates will then be uplifted annually in accordance with the SPPI.
The rates from 1 January 2024 will be as follows (the brackets reflecting the present rates):
| Grade | Fee earner | London 1 | London 2 | London 3 | National 1 | National 2 |
| A | Solicitors and legal executives with over 8 years’ experience | £546 (£512) | £398 (£373) | £301 (£282) | £278 (£261) | £272 (£255) |
| B | Solicitors and legal executives with over 4 years’ experience | £371 (£348) | £308 (£289) | £247 (£232) | £233 (£218) | £233 (£218) |
| C | Other solicitors or legal executives and fee earners of equivalent experience | £288 (£270) | £260 (£244) | £197 (£185) | £190 (£178) | £189 (£177) |
| D | Trainee solicitors, paralegals and other fee earners | £198 (£186) | £148 (£139) | £138 (£129) | £134 (£126) | £134 (£126) |
The Master of the Rolls has also stated that he will establish a further working group to examine the methodology underpinning Guideline Hourly Rates.
Further, the Master of the Rolls has also asked the Civil Procedure Rules Committee to take forward the suggestions in the May 2023 Costs Review with regard to costs budgeting and pilot the same.
Ellena Hunter is an Associate in the Civil and Commercial Costs Team at Clarion Solicitors. You can contact the team at civilandcommercialcosts@clarionsolicitors.com
Hourly rates: is a detailed assessment more beneficial to a receiving party than summary assessment?
In Harlow District Council v Powerrapid Limited [2023]EWHC 586 (KB), the Council (‘Appellant’) made a Compulsory Purchase Order (‘CPO’) in respect of land owned in Harlow by Powerrapid (‘Respondent’). The Respondent successfully resisted the CPO and was awarded their costs.
District Judge Leonard determined the categories of costs that fell within the scope of the costs order and made a preliminary assessment as to the applicable hourly rates, including an uplift on the guideline hourly rates of between 8% and 41%. The Appellant appealed District Judge Leonard’s judgments in relation to the scope of the costs order and the hourly rates awarded.
There are two interesting features of this judgement: firstly, the Court’s position on a party appealing a costs Judge’s determination of hourly rates and, secondly, the relationship between the guideline hourly rates and detailed assessment.
Appealing a costs Judge’s determination of hourly rates
In determining the appeal regarding the hourly rates, the Mr Justice Choudhury considered the judgment of Mealing McLeod v Common Professional Examination Board [2002] 2 Costs LR 223and noted that “Permission to appeal should not be granted simply to allow yet another trawl through the bill, in the absence of some sensible and significant complaint”. Mr Justice Choudhury stated that:
“…the role of the Appellate Court in this context is a limited one, that it should be slow to interfere with the exercise of judgment by a specialist costs judge, and that it should only do so where the conclusions of the judge below exceed the generous ambit within which reasonable disagreement is possible”
In response to the Respondent’s submissions that the Judge did not preside over the substantive matter giving rise to the costs application, Mr Justice Choudhury commented:
“In my view, it would be to usurp the role of the costs judge if the appellate court were to consider that it was in an equivalent position to the costs judge and/or had some greater right to interfere with a judgment merely because the judge below (like the appellate court) had not heard the substantive matter.”
The relationship between the Guideline Hourly Rates and detailed assessment
Upon considering the hourly rates awarded by District Judge Leonard and the applicability of the Guideline Hourly Rates (‘GHRs’) on detailed assessment, Mr Justice Choudhury stated that:
“The Master of the Rolls’ emphasis on the Guide being “no more than a guide and a starting point for judges carrying out summary assessment” is important to bear in mind. I note that the Judge in the present case was not conducting a summary assessment, for which the Guide is principally intended… ”
Mr Justice Choudhury further commented that the GHRs are not as central to a detailed assessment as they are to a summary assessment and highlighted the reference in the Guide to the Summary Assessment of Costs 2021 (‘Guide’) that GHRs are intended to provide a starting point in a summary assessment, and that they may also be a helpful starting point on detailed assessment. He added that whether or not the GHRs are a helpful starting point is a matter to be considered by the costs Judge having regard to all the circumstances of the case.
In dismissing the challenge to the hourly rates awarded, Mr Justice Choudhury stated:
“It was open to the Judge to conclude, as he did, that the GHRs were not particularly useful in this case”
Mr Justice Choudhury in dismissing the appeal stated that “there was no error of principle or law on the part of the Judge and no judgment that exceeded the generous ambit afforded to him. Accordingly, there is nothing that would entitle this Court to interfere with his conclusions.”
Is it more beneficial for a Receiving Party to seek detailed assessment of their costs rather than summary assessment?
Mr Justice Choudhury’s judgment on the relationship between the GHRs and the detailed assessment proceedings reiterates the passage in the Guide that GHRs may be a useful starting point for detailed assessment proceedings, but a Judge can utilise their discretion and find that the GHRs are not useful in light of the circumstances of the case.
The contrast of this judgment to that of Samsung Electronics Co Ltd and others v LG Display Co Ltd and another (Costs) [2022] EWCA Civ 466, in which it was held that there must be ‘a clear and compelling justification’ to obtain hourly rates in excess of GHRs at summary assessment, clearly demonstrates that obtaining an uplift on the GHRs at summary assessment is a higher threshold to pass than at detailed assessment. Whilst the wording of the Guide requires that GHRs be a starting point on summary assessment, and leaves it open to the Judge to determine whether they are in fact helpful on detailed assessment, the case law has certainly widened the relationship between the two assessment processes. It would be preferable for a receiving party to have their costs assessed by way of detailed assessment than summary assessment.
You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com.
Increased Guideline Hourly Rates approved by Master of the Rolls
Following the publication of the Civil Justice Council working group’s final report on guideline hourly rates, the proposed changes have now been accepted by the Master of the Rolls.
The revised rates are as follows and are expected to come into force on 1st October 2021 together with the revised Guide to the Summary Assessment of Costs.
For more details see the recent video on our youtube channel where Professor Dominic Regan and Stephanie Kaye discuss the report, including the practicalities and potential issues going forward for both COP practitioners and commercial litigators.
You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com.
Guideline Hourly Rates – Final Report
The Civil Justice Council working group has now published their final report on guideline hourly rates following the consultation that took place between January and March 2021.
The report responds to the concerns raised during the consultation process, however, the working group’s recommendations remain as per the interim report and will now be considered by the Master of the Rolls.
The recommended revised rates are as follows:
The full report can be found here.
You can find out more about our services here or you can contact the Costs and Litigation Funding team at CivilCosts@clarionsolicitors.com.
Consultation on Guideline Hourly Rates now open
The current guideline hourly rates have not changed since 2010. A long awaited review was announced last year and a Civil Justice Council working group was established. For more details of the working group see https://www.judiciary.uk/related-offices-and-bodies/advisory-bodies/cjc/working-parties/guideline-hourly-rates/
The working group has now published their report and you can find it here.
The working group’s recommendations are set out below.
The consultation is open until 31st March 2021 at 4pm. You can respond online here
Helen Spalding is an Associate in the Costs and Litigation Funding Department at Clarion. You can contact her at helen.spalding@clarionsolicitors.com or on 0113 288 5639.
COP hourly rates – the wait is over!
Following a Hearing on 26 May 2020, the judgment by Master Whalan was handed down today, indicating a 20% increase to the rates payable in Court of Protection cases. After 10 years of no pay rise, the judgment is welcomed by professionals nationally.
The case was brought by 4 professional deputies from 4 different law firms as applicants collectively, namely Wrigleys Solicitors, Freeths LLP, Boyes Turner LLP and Gillhams Solicitors. The issue brought before the Senior Courts Costs Office was that of hourly rates and the fact that the Guideline Hourly Rates (GHR) had not changed for 10 years, but factors like inflation, increasing workload and growing responsibility on professional deputies had caused concern as to the sustainability of Court of Protection work. Clarion prepared the 4 bills of costs for submission, claiming the GHR of 2010 plus a percentage uplift to reflect RPI inflation (of approximately 31%) between 2010 and 2019.
A Directions Hearing took place on 17 April 2020 and the parties were asked to produce evidence in support of the claim. All four deputies, Clarion and instrumental resources from willing members of the Professional Deputies Forum produced evidence, further reinforcing that the 2010 rates were not fit for purpose.
Richard Wilcock of Exchange Chambers represented the parties at the Final Hearing, and relied on the relevant factors in the Civil Procedure Rules, the GHR Review Committee and recent case law in his submission, all pointing to the fact that changes to the rates payable were essential. He made two key arguments; the first being that COP work is specialised, combined with the fact that deputies carry, in general, higher overheads, including increasing overhead time, which should mean that the current rates are paid with an uplift. His second argument was presented as an alternative solution, in that if the SCCO wanted to rely on the GHR as a starting point, then it must apply an empirical uplift to reflect the incidence of inflation between 2010 and 2019.
Due to inconsistencies in the evidence produced relating to overheads, Master Whalan was not convinced by the first argument. He said that the findings “do not, in my view, demonstrate that the burden is one that is exclusive to COP work or that it is atypically high in comparison with that experienced by practitioners in comparable areas of practice.” He confirmed that the approach set out in Re: Smith and others [2007] and Yazid Yahiaoui and others [2014] was still correct and applicable.
Maser Whalan then moved on Counsel’s secondary argument. He emphasised that he had no power to review the GHR, but recognised that they couldn’t provide “reasonable remuneration unless these rates are subject to some form of periodic, upwards review.” Importantly, Master Whalan states in his judgment, “I do not merely express some empathy for Deputies engaged in COP work, I recognise also the force in the submission that the failure to review the GHR since 2010 threatens the viability of work that is fundamental to the operation of the COP and the court system generally.”
On the topic of inflation, Master Whalan questioned whether CPI was more appropriate than RPI. He said “I am satisfied that in 2020 the GHR cannot be applied reasonably or equitably without some form of monetary uplift that recognises the erosive effect of inflation”. He further specifies that “If the hourly rates claimed fall within approximately 120% of the 2010 GHR, then they should be regarded as being prima facie reasonable” and provides a suitable table of the GHR with a 20% uplift to assist the Costs Officers undertaking future COP assessments:
| Guideline Hourly Rates | ||||
| Bands | A | B | C | D |
| London 1 | £490 | £355 | £271 | £165 |
| London 2 | £380 | £290 | £235 | £151 |
| London 3 | £275-320 | £206-275 | £198 | £145 |
| National 1 | £260 | £230 | £193 | £142 |
| National 2 | £241 | £212 | £175 | £133 |
Master Whalan concludes by saying that the rates above are applicable to all outstanding assessments, regardless of the year the work was undertaken. He also advised that the recommendations of the GHR Working Group must be adopted in preference to his findings.
This outcome is brilliant news for COP practitioners, providing overdue ratification for the work they conduct. Importantly, the outcome will mean that this area of work continues to be sustainable.
Clarion are delighted to have been a part of this case. We will be applying the 20% uplift to all cases going forward, and are happy to revise existing bills which have not yet been assessed to reflect the changes. Please contact stephanie.kaye@clarionsolicitors.com for further information and queries.