Solicitor Guideline Hourly Rates – A starting point, not the finish line

What are the solicitor guideline hourly rates?

Legal professionals, including solicitors, have the discretion to set their own fees, which clients are encouraged to negotiate prior to engaging their services. Nevertheless, guideline hourly rates have been established in England and Wales for legal professionals to use as a reference point.

The Solicitors’ guideline hourly rates (GHR) are primarily used as an indication for cost assessments in court proceedings. Regardless of the pre-agreed rates between clients and legal professionals, judges utilize the guideline rates to calculate awards to solicitors and other legal professionals.

The latest update to the guideline rates was conducted in October 2021. These rates provide a starting point for costs judges to determine the reasonable hourly charge for the work completed by legal professionals.

Costs lawyers, costs draftsmen, and solicitors should consider the guideline rates when addressing matters regarding retainers or costs budgets. However, it’s important to note that individual decisions can be made based on case complexity and client requirements, and fees can be set accordingly.

In the recent case of Various Claimants v News Group Newspapers Ltd [2023] EWHC 827 (SCCO), the Judge stated the the GHR should be used as a starting point for hourly rates, opening up the room of discussion and negotiation surrounding the finalised costs.

Categories of the rates

Solicitors’ guideline hourly rates are split into various different sections. The rates vary depending on the location of the legal professional and the title/experience of the legal professional.

The grades set out for the experience of a solicitor are as follows:

  • Grade A – Solicitors and legal executives with over 8 years of experience
  • Grade B – Solicitors and legal executives with over 4 years of experience
  • Grade C – Other solicitors or legal executives and fee earners of equivalent experience
  • Grade D – Trainee solicitors, paralegals and other fee earners 

The grade of legal professional is then split into their working location:

  • London band 1 – Heavy commercial and corporate work in Central London
  • London band 2 – City and Centrally based London firms
  • London band 3 – Outer London
  • National 1 – Usually inner cities
  • National 2 – Usually outer cities 

As an example, a London band 1 grade A fee earner receives a guideline rate of £512 per hour, as opposed to legal professionals with the same experience based in Exeter, a national 2 area, who get £255 per hour.

Various Claimants v News Group Newspapers Ltd [2023]

In the high profile case of Various Claimants v News Group Newspapers Ltd [2023] EWHC 827 (SCCO), more commonly referred to as the ‘phone hacking’ case, the Costs Judge Rowley stated that the guideline hourly rates should simply be used as guideline figures and a starting point and for the summary assessment when it comes to deciding hourly rate.

“GHR may be a useful starting point in a detailed assessment as well as in a summary assessment.”

He further discussed:

“The GHR are provided predominantly to assist judges who do not specialise in costs cases to deal with a summary assessment of costs when faced with the successful party’s summary assessment schedule and competing arguments from the advocates.”

The Judge also had to take into account the proportionality of the costs, which can be referred to as the ‘Lownds Test’, from Lownds v Home Office [2002] EWCA Civ 365.

“The “Lownds Test” required the court to consider at the outset whether or not the costs claimed appeared to be disproportionate on a global basis. Depending upon that conclusion, the court would allow costs that had been reasonably incurred and were reasonable in amount, or would apply a stricter test of necessity in respect of those costs.”

The Costs Judge Rowley also went on to state how substantial and complex litigation can affect the decision regarding guideline hourly rates, as the expertise, the importance of the matter and the time of the fee earners involved will have to be accounted for:

“Given the expertise of the solicitors and the weight of the case in terms of its value, complexity and importance, I take the view that the claimants have justified the hourly rates that have been claimed.”

When were the rates last changed?

In July 2021, the Civil Justice Council (CJC) announced the updated guideline hourly rates, which were based on surveys and evidence submitted by legal professionals in September and October 2020. The rates were determined by averaging the submissions.

The CJC’s final report and recommendations were published in July 2021 and the Master of the Rolls, Sir Geoffrey Vos, approved the rates. They went into effect in October 2021, marking the first increase in rates in 11 years. The CJC plans to review the rates again in the next two years.

The new solicitors’ guideline hourly rates, which were implemented in October 2021, still maintain a clear distinction between London rates and National rates. However, other qualified legal professionals such as costs lawyers may now charge higher rates than grade D depending on the complexity of the case they are working on, as outlined in the Guide to the Summary Assessment of Costs 2021.

Do solicitors have to follow the guidelines?

As previously mentioned, the guideline hourly rates provided by the Civil Justice Council serve as mere suggestions, and legal professionals may offer rates that are above or below these recommendations. Factors such as the case’s complexity and the nature of the work involved are considered when determining rates, making it a case-by-case decision.

While court assessments of costs can sometimes permit higher rates, the paying party and the costs judge may challenge them.

As indicated in the case of Various Claimants v News Group Newspapers Ltd [2023], solicitors may start to use the guideline rates as more of a starting point when negotiating their fees, taking into account the level of complexity and the amount of time required to handle the case.

How can Greener Costs assist?

Our team of Costs Lawyers and Costs Draftsmen have many years of experience surrounding costs, and can assist in disputes surrounding guideline hourly rates. Though the rates are simply guidelines and have been refered to in the case mentioned as a ‘starting point’, we can assess all the factors in the case, such as the complexity and experience of the solicitor, to come to a fair conclusion in negotiations.

We are able to assist clients from all backgrounds on a range of cases, whether you are the paying party of receiving party. We can help your case from the start of your dispute and can see it through all the way to representation at detailed assessment hearings and high court cases. We understand the complexity and urgency of certain cases for our clients and can advise and provide our services in a timely manner.

Greener Costs is the UK’s first net positive legal costs company, and our aim is to assist your law farm in costs services whilst also helping you become more carbon neutral. Our operations are fully paperless, and we commit to planting 25 trees per instruction.

If you wish to speak to a member of the team here at Greener Costs then please contact us at 01204 263047, info@greenercosts.co.uk or use the online form on our website below.

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