Guideline Hourly Rates Increases Confirmed from 1 October 2021

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07 October, 2021

Siobhan Hardy
Partner, Head of Housing and Regeneration (Litigation)

The Master of the Rolls, Sir Geoffrey Vos, has confirmed that from the 1 October 2021 new guideline hourly rates recommended by the review undertaken by the Civil Justice Council (CJC) published in April 2021, will come into use in the civil courts. It is expected that there will be a further review within 2 years. The rates and geographic areas have both been revised.

The new rates

The report sets out the rates as follows (percentage increase on current rates in brackets):

Grade A Grade B Grade C Grade D
London 1 £512 (25.2%) £348 (17.6%) £270 (19.5%) £186 (34.8%)
London 2 £373(17.8%) £289 (19.5%) £244 (25%) £139 (10.4%)
London 3 £282 (13.7%) £232(15.8%) £185 (11.9%) £129 (7%)
National 1 £261 (20.2%)

£218 (13.5%)

£178 (10.7%) £126 (6.8%)
National 2

£255 (26.78%)

£218 (23.2%) £177 (21.3%) £126 (13.5%)

The rates were last reviewed 11 years ago and are set to increase by up to 34.8%.

CJC recognised that the new rates will not please everyone, stating:

"The majority of those who criticised the rates fell broadly into the expected categories, namely receiving parties thought they were too low, whereas paying parties thought them too high."

Despite that, the final version of the guide, which is expected to be published soon, will largely mirror what has already been set out with some minor changes to rectify a drafting error.

The new geographic areas

The geographic areas covered by the 5 new area bands have been amended and are as follows:

London 1 is for very heavy commercial and corporate work carried out by centrally based London firms with no specific postposed allotted.

London 2 covers City & Central London - other work for specific postcodes London Band Area

London 3 is Outer London for all other London Boroughs, plus Dartford & Gravesend

National 1*

i. The counties of Bedfordshire, Berkshire, Buckinghamshire, Dorset, Essex, Hampshire (& Isle of Wight), Kent, Middlesex, Oxfordshire, East Sussex, West Sussex, Suffolk, Surrey and Wiltshire

ii. Birkenhead, Birmingham Inner, Bristol, Cambridge City, Cardiff Inner, Leeds Inner (within 2km of City Art Gallery), Liverpool, Manchester Central, Newcastle City Centre (within 2m of St Nicholas Cathedral), Norwich City and Nottingham City.

National 2: All places not included in London 1-3 and National 1

* We understand that an amendment from the draft will show that additionally, existing National 1 counties and other identified National 1 centres will remain in Band 1.

Forbes Comments

Despite opposition from some in the insurance and defendant solicitors' sectors on the basis that working practices have changed forever due to the changes brought about by the pandemic, it was decided that this should not delay the bringing in of what is an advisory guide.

In particular, there has been some disquiet amongst those representing paying parties due to the proposals relating to the rates to be used for home workers. The report refers to using the rates applicable for the location of the office to which the person doing the work is "predominantly attached". That could be open to abuse by attaching home workers to the office with the highest rates no matter where they reside. The CJC response was that the GHR are not intended to cover work done from home, but that could be open for consideration in a future review, and that this solution is intended to deal with files being transferred to a different office for work to be done there. They further said that now is not the time to consider the impact of the pandemic on home working but that remained possible for consideration in a subsequent review.

These new rates will effectively apply retrospectively, in that they are to be used on summary assessments which are carried out after the date of approval. They say that this is because the rates are based on 2019-20 data on what has been awarded or agreed so there is no justification for any phased introduction. Equally however there is no justification for any increase in these rates bearing in mind the present turbulent economic times coupled with low interest rates.

These changes are unlikely to please paying parties. However, you should not lose sight of the fact that these are "guidelines" only so if you feel they can be challenged you should do so. Whether that finds judicial favour is another matter, and we will have to see how the courts interpret these rates. Frankly, we do not hold out too much hope of being able to reduce them on assessment in the majority of cases.

For more information contact Siobhan Hardy in our Insurance department via email or phone on 0113 386 2686. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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