Ray Of Light For Litigators Chained To Guideline Hourly Rates

A recent decision in the Court of Protection has put guideline hourly rates back under the spotlight, and this will be encouraging to litigators of all specialties.

In 2010, the Senior Courts Costs Office (SCCO) set guideline hourly rates for solicitors, which the Court will use as a “starting point” when assessing a bill of costs. The guideline rates have been applied regularly in application hearings and at trial when costs are sought by the successful party. The rates, which differ depending on the region of the country in which a firm is based, have been in place for over a decade and have not kept up with inflation.

This presents difficulties for successful litigants who find that they cannot recover all of their legal costs. The typical rate of recovery is often between 60% and 75% which usually means that the successful party will be slightly out of pocket, even after succeeding at hearing. Hourly rates are not the only factor the Court will consider of course, and the time spent on various aspects of a case will be scrutinised with deductions made if the Judge considers any aspects of a party’s legal costs to be excessive for the work completed, or disproportionate, given the financial value and complexity of the case. However, there is a sense of double reduction where the hourly rate has been reduced first, and often quite significantly.

Case law

In PLK v Ors [2020] EWHC B28, four solicitors’ firms argued that guideline hourly rates should not apply due to the specialised nature of Court of Protection work. This argument was rejected by Master Whalan, and he stated that he could not change the guideline rates.

However, he stated that if a firm’s hourly rates were no more than 120% of the guideline rates, this would be seen to be “prima facie reasonable” and he commented that costs assessments across the board should follow this approach.

Review of guideline hourly rates

It is understood that there is currently a review of guideline hourly rates in the SCCO and this judgment in the above case may be a reliable indicator that they are set to rise, at least to keep up with inflation since 2010. Before this happens however, the precedent set by Master Whalan may well open the door to Judges and costs assessors taking a much less stringent approach to guideline rates, and this could see a rise in the rates of costs recovered for successful litigants.

As far as the Court of Protection is concerned, this ruling does suggest that Court of Protection work whilst specialised, does not justify higher guideline hourly rates than any other type of litigation. This judgment also stressed the importance of delegating work wherever possible to fee earners who are able to complete it at a lower hourly rate. This is something that deputies looking to instruct solicitors should be on the lookout for and in all cases, deputies should consider proportionality when choosing solicitors. Whilst it may well be in a protected party’s best interests to engage highly regarded specialists, sometimes it is about getting the best deal for that individual so as to minimise their spending.

The level of costs that a protected party will incur should always be fair and economical, and the Courts will often expect to see deputies seeking different quotes and negotiating rates.


How can Nelsons help?

If you have any questions regarding the subjects discussed in this article, please contact a member of our expert Dispute Resolution team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.



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