The Master of the Rolls has decided to freeze the guideline hourly rates (GHRs), due to the poor response to its call for evidence.
Lord Dyson initially said in July that he had no “evidential base” on which to make any changes to the GHRs, but would hold further discussions with the Law Society and government.
Last week, he announced that these discussions had made no “material change” to the position. The GHRs will therefore remain at their current rates, which were set in 2010.
GHRs help judges assess costs by providing guidelines for the recoverable hourly rate for different grades of fee earner in different regions of England and Wales.
Lord Dyson said: “I am conscious of a number of trends in the legal services market and other factors that are rendering GHRs less and less relevant.” These include advances in technology and business practices; the “ever-increasing sub-specialisation of the law which is seeing the market increasingly dictate rates in some fields (particularly commercial law)”; “the judiciary’s use of proportionality as a driving principle in assessing costs”; and greater familiarity with costs budgeting among judiciary and practitioners alike.
He called for greater use of fixed costs in litigation.
Sue Nash, chairman of the Association of Costs Lawyers, says: “While any decision which gives certainty is to be welcomed, it is unfortunate that the costs committee was unable to fulfill its brief.
“This was a golden opportunity for the legal profession to help shape the debate about the value of legal services but the outcome was made inevitable given the limited responses to the consultation coupled with the lack of resources afforded to the committee. It is difficult to see what other decision the Master of the Rolls could have taken in the circumstances.
“What will be interesting to see now is whether this will give added impetus to the increasingly wide variety of alternative fee and billing arrangements being entered between solicitors and their clients.”
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