Judge: Supreme Court Costs Office (Master Whalan)
Citation:  EWHC B28
In an important decision, the Senior Court Costs Office has looked at the method of assessment of the hourly rates claimed by Deputies and, in particular, at whether those rates need to reflect commercial realities in 2020. The SCCO consolidated the assessments in four cases that were chosen to represent the costs claimed by Deputies in different parts of England in the management of the affairs of protected parties who had sustained significant brain or birth injuries. The central submission of the deputies was that the court’s current approach, which, broadly speaking, relied on the application of the Guidelines Hourly Rates (‘GHR’) approved by the Costs Committee of the Civil Justice Council was, by 2020, incorrect and unjust. Instead, they submitted, the assessment of COP work should be predicated on a more flexible exercise of the discretion conferred by CPR 44.3(3), whereby the GHR were utilised as merely a ‘starting point’ and not a ‘starting and end point’.
Master Whalan did not accept the primary argument of the applicants that COP firms had experienced:
However, he continued at paragraph 31:
Three preliminary observations then inform my initial approach to the applicants’ secondary argument. First, it should be emphasised from the outset that this court has no power to review or amend the GHR, either formally or informally, as this role is the exclusive preserve of the Civil Justice Council. This reality is recognised properly by Mr Wilcock in his written and oral submissions. Secondly, while the court has received submissions concerning the application of an inflationary uplift when applying the GHR, this is not just a ‘blunt tool’, but an approach which endorses the application of a practise which has been rejected explicitly since 2014, from which time the emphasis has been on a ‘comprehensive, evidence based review’. Thirdly, however, it must be acknowledged that the GHR cannot be applied fairly as an index of reasonable remuneration unless these rates are subject to some form of periodic, upwards review. O’Farrell J. in Ohpen (ibid) observed that it ‘is unsatisfactory that the guidelines are based on rates fixed in 2010’ as these ‘are not helpful in determining reasonable rates in 2019’. These observations were made in the context of an assessment of London City solicitor rates in an assessment where the court was not bound by the GHR. It seems clear to me that the failure to review the GHR since 2010 constitutes an omission which is not simply regrettable but seriously problematic where the GHR form the ‘going rates’ applied on assessment. I do not merely express some empathy for Deputies engaged in COP work, I recognise also the force in the submission that the failure to review the GHR since 2010 threatens the viability of work that is fundamental to the operation of the COP and the court system generally.
Against this backdrop, Master Whalan concluded that
Master Whalan indicated that
This approach can be adopted immediately and is applicable to all outstanding bills, regardless of whether the period is to 2018, 2019, 2020 or subsequently. It goes without saying that this approach is subject ultimately to the recommendations of Mr Justice Stewart and his Hourly Rates Working Group and the Civil Justice Council. Ultimately the recommendations of the Working Group must be adopted in preference to my findings.
Subsequent to the decision, the Senior Costs Judge issued a Practice Note explaining some of the practical consequences.
The long gap between the last review of the SCCO Guideline Hourly Rates and the current one has caused problems and dissatisfaction both in the COP and generally. In that context, this decision and the Senior Cost Judge’s subsequent practice direction are welcome interim measures. It is to be hoped that reviews will henceforth happen more than once a decade.