Review of Guideline Hourly Rates

The Civil Justice Council Costs Committee has released a synopsis of its second meeting which took place on 6 June 2013 to start work on its review of the guideline hourly rates.

The discussions centred on eight surveys, including the Firms’ Finance Survey 2011 and the Practising Certificate Holders Survey 2012. It was agreed that the work of the Committee should focus first on the four different groups of data required relating to expense of time, namely:

  • Grade of fee earner and region
  • Salary for each level offee earner
  • Chargeable hours perfee earner/region
  • Overhead costs, allocated per fee earner/region.

The synopsis said that using regularly conducted surveys had the advantage of allowing the benchmark for salaries, chargeable hours and overheads to be reassessed as those surveys were repeated in future years.

Having worked out the costings under these headings, the Committee will move onto the more sensitive task of factoring in a suitable profit margin. The Committee also discussed the possible availability of data from other sources,such as CILEX,the ABI and others.

The next tasks of the Committee will be to agree the contents of its own survey, and the method of inviting the submission of evidence from bodies such asthe LSLA, APIL, MASS, FOIL and NHSLA, and to consider ways of encouraging as wide a response as possible from solicitors’ firms.

The Committee aims to meet again in late July.

here. It closes on 28 November 2013.

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e-Petition Against Government’s Proposal On Fixed Recoverable Costs In Personal Injury Matters

An e-petition against the government’s proposals regarding fixed recoverable costs in personal injury claims has been created here. It closes on 28 November 2013.

New member of team

We are proud to welcome our latest team member, Joanna Sinfield. Joanna qualified as a solicitor in 1995 and was in private practice until November 2007. She has been involved in all areas of costs drafting and negotiation since August 2006 with a particular interest and specialism for personal injury CFA funded work.

Costs Budgets and Detailed Assessments

The Court of Appeal has warned that Costs Judges should not treat costs as reasonable or proportionate when it comes to assessment simply because they fall within the court approved budget.

Troy Foods v Manton [2013] EWCA Civ 615 was a breach of contract claim that fell under the Mercantile Court costs management pilot last year. The Claimant’s budget was approved by HHJ Kaye QC in Leeds. The concern of the Defendant was that the Judge had proceeded on the basis that he would approve any figure for a particular element of the claim, provided it was not so unreasonable as to render it obviously excessive or ‘grossly disproportionate’.

Granting permission, Moore-Bick LJ said…

“…I do not accept that costs judges should or will treat the court’s approval of a budget as demonstrating, without further consideration, that the costs incurred by the receiving party are reasonable or proportionate simply because they fall within the scope of the approved budget.”

“Although the court will not readily interfere with the judge’s decision in a matter of this kind, which essentially involves an exercise of judgment, I think it is arguable that in this case the judge did not apply the correct principles and, as a result, approved an over-generous budget in respect of some elements of costs.”

The judge went on to say that he gave permission so that the Court of Appeal could establish the correct principles upon which costs budgeting is to be carried out and also possibly the proper approach to be taken by costs judges on detailed assessment where there is a budget.

In the event, it is understood, the case has now settled. We will therefore have to wait a while longer for this guidance. However, the belief amongst some that detailed assessment hearings would become largely redundant as a result of the budgeting regime appears to have been quashed.

See the full Litigation Futures article

Civil Litigation Costs Reforms

Further details of how the Jackson reforms are to be implemented have been released by the government.

The reforms will be implemented in April 2013 through Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (the Act), and associated orders and regulations and changes to the Civil Procedure Rules, subject to a delayed implementation for mesothelioma claims, which will not come into effect until a review has been undertaken, and insolvency claims, which will not come into effect until April 2015). In short:  

CFAs / ATE

The Act will abolish the recovery of success fees and after the event (ATE) insurance premiums from the losing side.

ATE in Clinical Negligence Cases

The provisions in the Act allow a limited exception in respect of clinical negligence cases where ATE insurance premiums relating to expert reports will remain recoverable.

25% cap on success fees

The success fee in personal injury cases will be subject to a cap of 25% of damages (subject to this amount not exceeding the regulatory maximum of 100% of base costs), excluding damages for future care and loss.

DBAs

The Act will allow the use of damages-based agreements (DBAs) in all areas of civil litigation.  There will be a 25% cap on the amount of damages, excluding damages for future care and loss, that can be taken as the lawyer’s fee under a DBA in personal injury cases.  For all other cases under a DBA in civil litigation the cap will be 50%, save for cases in the Employment Tribunal where this is aready set at 35%.

10% increase in non-pecuniary general damages

There is to be a 10% increase in non-pecuniary general damages such as for pain, suffering and loss of amenity, which it is said will help balance the impact of the CFA changes. See Simmons v Castle.

QOCS

A system of qualified one way costs shifting (QOCS) in personal injury cases will be introduced so that claimants conducting their case properly will not have to pay towards defendants’ costs if the claim fails.

Increased sanctions under Part 36

The sanctions under Part 36 of the Civil Procedure Rules are being reformed in order to encourage early settlement. 

Proportionality

There will be a new stricter rule on proportionality, to be set out in Rule 44.4(5) (recently unveiled by Lord Neuberger) as such…

44.4(5) Costs incurred are proportionate if they bear a reasonable relationship to:

(a) the sums in issue in the proceedings;

(b) the value of any non-monetary relief in issue in the proceedings;

(c) the complexity of the litigation;

(d) any additional work generated by the conduct of the paying party; and

(e) any wider factors involved in the proceedings, such as reputation or public importance.’

Referral fees

The Act prohibits the payment or receipt of referral fees in personal injury cases.

RTA Scheme  

It is intended that existing RTA PI scheme be increased from £10k to £25k and expanded to cover employers’ liability and public liability claims.

Second office

In September 2008 we opened our second office in Wooburn Green, Buckinghamshire. This has given us the additional space to allow us to take on new clients while maintaining and further enhancing our service levels.

Jackson rewind?

Labour’s shadow justice minister Andy Slaughter has told the Westminster Legal Policy Forum that it was too early to judge the effectiveness of the Jackson reforms and the ongoing changes to fixed fee claims.

The former barrister said the legal profession was struggling to deal with an ‘unprecedented avalanche’ of change and it was ‘foolhardy’ to try to reform so much in such a short space of time. Slaughter said his party would look to ‘unwind’ some reforms if they are found to be failing in 2015. This would be done, he said, through a more thorough consultation process that would take account of the opinions of members of the legal profession.

A major criticism of the reforms is that there has been an abject failure by the government to listen equally to the views of both sides to the argument, leaning too much in favour of bringing costs down for defendants to the detriment of access to justice for claimants. Slaughter said…

‘Politicians have a problem when they look for quick fixes or listen too much to one side of the argument… It’s a lesson we need to learn – we need to listen to the profession as well as the Daily Mail. I would not want a Labour government to be prisoner to vested interests [but] we have gone too far the other way in ignoring experts in this area simply because politicians think they are feathering their own nests.. I don’t know how the profession – let alone the public – is going to cope with the changes coming through.’

Time will tell how effective or workable the reforms will be. However, Slaughter’s comments may bring some comfort to (albeit with probably an equal measure of scepticism from) claimant lawyers who have already started to feel the effects and will continue to do so over the coming months and years.

Read the full Law Society Gazette article.

Simmons and Castle

The Court of Appeal has revisted its earlier July 2012 judgment in which they controversially announced that with effect from 1st April 2013 general damages in tort cases would increase by 10% from current levels. Following an application by the Association of British Insurers in August to intervene the court was invited to reconsider whether the 10% increase should only apply to cases where the claimant’s funding arrangements for his or her legal costs had been agreed after 1st April 2013.

One of the primary concerns expressed by insurers about the 10% uplift in damages was that a successful claimant who begins a claim before 1st April 2013, under a CFA or with the benefit of ATE insurance, would be entitled to both the 10% increase in damages and the continued recoverability of any success fee or ATE insurance premium if the proceedings conclude after 1st April 2013. 

The Association of Personal Injury Lawyers and The Personal Injuries Bar were joined as 2nd and 3rd Interested Parties and the court recovened on 25th September 2012 to consider written and oral submissions. Having done so, they concluded that….

“…we would, as it were, delete para 19 from our earlier judgment, and replace para 20 with the following paragraph:

“Accordingly, we take this opportunity to declare that, with effect from 1 April 2013, the proper level of general damages in all civil claims for (i) pain and suffering, (ii) loss of amenity, (iii) physical inconvenience and discomfort, (iv) social discredit, (v) mental distress, or (vi) loss of society of relatives, will be 10% higher than previously, unless the claimant falls within section 44(6) of LASPO. It therefore follows that, if the action now under appeal had been the subject of a judgment after 1 April 2013, then (unless the claimant had entered into a CFA before that date) the proper award of general damages would be 10% higher than that agreed in this case, namely £22,000 rather than £20,000”.

Click here for Judgment

Response to Report on GHR published

Master of the Rolls’ decision and Committee’s report on Guideline Hourly Rates 


The Master of the Rolls has published his response to the Civil Justice Council Costs Committee’s comprehensive report on Guideline Hourly Rates, rejecting the committee’s findings and determining there should be no change to the guideline hourly rates which were last updated in 2010 due to an in sufficiently strong foundation of evidence. He did however accept several of the Committee’s recommendations, including that:

  • There should not be an additional Grade A star
  • Separate GHR bands specific to specialist fields of civil litigation should not be introduced
  • Separate rates should not be introduced for detailed assessments of costs, but that there should be greater flexibility in detailed assessments than would ordinarily be shown in summary assessments

Two positive changes which will be introduced in October 2014 are that:

  • Grade A fee earners will include Fellows of CILEX with 8 years’ post-qualification experience
  • Costs Lawyers who are suitably qualified and subject to regulation will be eligible for payment at GHR Grades C or B, depending on the complexity of the work

New Model CFA, but be warned!

The Law Society has published a new Model CFA for use in personal injury and clinical negligence cases.

However, be warned! Commentators have suggested that it contains errors. See Kerry Underwood’s stark warning regarding its use.