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Costs

Guideline Hourly Rates Consultation - Weightmans' response

The piecemeal approach to costs reform continues.

Download a copy of our response submitted for the Guideline Hourly Rates Consultation

Content

  • Question 1: Comments on the methodology used by the working group
  • Question 2: Comments on the recommended changes to areas London 1 and London 2
  • Question 3: Comments on the recommended GHRs set out in paragraph 4.18 of the report
  • Question 4: Comments on whether the rate of £186 for London 1 Grade D is too high; if so, at what rate it should be set and why?
  • Question 5: Comments on the recommended changes to the geographical areas in section 5 of the report and the recommendation to have two national bands?


The piecemeal approach to costs reform continues.

What is the true value of the GHR’s to compensators in isolation, when the GHR’s:

  1. are not intended to replace figures used by those with accurate local knowledge;
  2. are not scale figures;
  3. are broad approximations only;
  4. are intended to provide a starting point for those faced with summary assessment.

Compensators looking for certainty to enable accurate reserving are once again left wanting by the fact that para 3.23 of the report instils a requirement upon judges who assess costs to have proper regard to the paragraph 29 proposal which states:

In substantial and complex litigation an hourly rate in excess of the guideline figures may be appropriate for grade A, B and C fee earners where other factors, for example the value of the litigation, the level of the complexity, the urgency or importance of the matter, as well as any international element, would justify a significantly higher rate.”

Our data confirms that less than 1% of disputed claims for costs proceed to a detailed assessment hearing. Notwithstanding that most claims for costs will settle for an inclusive sum, the report heavily relies upon the expertise of those members of the judiciary conducting costs hearings. There appears to have been no stress testing of firms’ expense of time calculations, improvements in technology, home working etc. Who is to say that the 2010 GHR’s were the appropriate platform from which to start the review and simply add a percentile increase?

Transparency enabling a party to make an informed decision is key to the effective management of any claim. 

The failure to recognise that any review of the GHR’s surely must go hand-in-hand with the MOJ’s consultation on extending the fixed recoverable costs regime in civil cases, of 28 March 2019, following Sir Rupert Jackson’s report of 2017, is misguided.

A move in the right direction to achieving transparency was signified by the introduction of costs management assisting the decision-making process within a claim and effective reserving.  

Surely the time has come for a call to arms to secure a joined-up approach to costs reform, to include the extension of the fixed recoverable costs regime, the review of GHR’s and the continued development of costs management to all claims without exception.

We at Weightmans are committed to reform. However, the proposed increase to the GHR potentially rewards and sustains an outdated model of the inefficient law firm operating on a traditional basis. The proposals do not reflect the reality of how expertise is deployed, aided by cutting edge tech-enabled and efficient case management systems. The GHR consultation represents an opportunity to cut rates, factoring in the substantial ongoing investment in those systems and software by law firms.

If, like us, you agree that a review of GHR’s in isolation does not address the ever-increasing costs associated with claims, we want to hear from you.

 

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