A commentary on the Guideline Hourly Rates 2021
With hourly rates for Solicitors having remained static for more than a decade, it was announced last year that the Master of the Rolls, Sir Geoffrey Vos, had approved the Civil Justice Council’s (“CJC”) recommended new guideline hourly rates, which were be published in new guidance on summary assessment and which came into effect from 1 October 2021.
The CJC published their recommendations in July 2021 following an extensive evidence gathering exercise amongst members of the legal profession. What is of note to practitioners, given the length of time the 2010 guideline hourly rates went untouched, is that a further review of the rates was promised after two years, i.e. by 2023/24.
The rates
The updated rates as recommended by the CJC and approved by the Master of the Rolls are set out within the table, below. The percentage figures reflect the amount of the increase on the 2010 figures.
| GRADE B | GRADE C | 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 changes have been welcomed by industry leaders and representatives, including the Association of Costs Lawyers.
The working group remains keen to emphasise that the rates are guideline rates and that there is nothing to prevent a Judge from awarding higher rates to a fee earner in a particular case (those where the issues are particularly complex and in which the fee earner bears a heavier responsibility, for example). Conversely, there would be nothing to prevent a Judge from awarding a lower rate in cases which are particularly straight forward, for example.
One case, in which the judgment of the court focused heavily on the application of the 2021 guideline rates and attracted the attention of paying parties up and down the land, is the Court of Appeal decision in Samsung Electronics Co. Ltd & Ors v LG Display Co. Ltd & Anor (Costs) [2022] EWCA Civ 466 (“Samsung”).
Here, the Court of Appeal determined that the respondent, LG, had not provided a “clear and compelling justification” for why hourly rates in excess of the guideline rates should be recoverable inter partes and, accordingly, reduced its costs from a claimed £72,818.21 to £55,000.00.
It should be said, however, that the decision in Samsung was decided on its facts. The appeal hearing was concluded in one day and so the costs of the appeal were summarily assessed (as opposed to being subjected to detailed assessment), the subject matter of the appeal itself was not complex being an appeal hearing about trial forum, the appeal was not document heavy, the amount in dispute was modest by commercial standards, and most importantly it seems, LG did not provide any justification for the charging of rates significant in excess of the guidelines, save to say that it was almost always the case that the rates in competition cases exceeded the guidelines.
Accordingly, Samsung does not appear to be the panacea in respect of disputes regarding hourly rates that many paying parties believe to be the case.
What this means for practitioners?
To properly take advantage of the opportunity afforded to practitioners by the review and increase in guideline hourly rates, practitioners should undertake a review of their retainers and advise clients of any rate increases to ensure ongoing compliance with the indemnity principle. Failure to undertake these important steps may mean practitioners are bound by existing retainer rates and potentially risk finding themselves in breach of the indemnity principle if they try to implement a revision of their rates without taking the action suggested above.
Moving forward, practitioners ought to review and update their retainers on a regular basis to take account of any increase in costs and to take account of any further increases in the guideline rates that may be forthcoming in the future, given the promise made to practitioners following the latest update.
Should it be the case that rates in excess of the guidelines are sought from paying parties following conclusion of a piece of litigation, receiving parties should be ready to point to the factors in the litigation which justifies the rates being claimed.
