Guideline hourly rates – Guidelines not Tramlines

This week, we focus on the often misunderstood topic of The Supreme Court Costs Office (SCCO) Guideline Hourly Rates.

There is more misunderstanding about the SCCO rates than in any other aspect of costs. Quite simply they do not apply to anything other than summary assessment.

Present Position

The SCCO rates for solicitors have remained substantially unchanged since 1st January 2009. The last time the rates were changed was on 1st April 2010, when they were increased marginally by 1.7% to be in line with inflation.

Nevertheless, the Association of Personal Injury Lawyers (APIL) has noted, almost three years have now passed since the SCCO rates were last changed and the retail prices index has increased by a whopping 19.8% and the consumer prices index by 16.7% since 1st January 2009.

The Civil Justice Council Costs Committee conducted a survey of solicitors in November 2013, and their recommendations for the future of the GHR are awaited.

Guidelines not Tramlines

The SCCO rates are supposed to be “guidelines and are not tramlines”, they are merely the product of research and are very clearly out of date.

In addition, applying for an enhancement on the SCCO rates depends entirely on the facts of the case and it is often very difficult to get past the fact that Judges wrongly treat them as prescribed rates rather than guides. There are some helpful authorities see Higgs V Camden & Islington Health Authority [2003] EWHC 15 (QB). In this case the High Court concluded that the guidelines were of limited assistance.

Also some of the wording from the SCCO guide itself is on a literal interpretation very useful e.g. “broad approximations only”…”they are not a scale”.

Yet despite all this compelling evidence Judges do struggle with this and the same arguments are beginning to present themselves in the context of cost budgeting.

We at Ontime Group have enjoyed considerable success applying for enhanced rates at budget hearings. In particular we stress that the nature of the costs management rules are to budget hours for each individual phase that are proportionate to the assumptions relied upon. The budget hearing should not be a detailed assessment and in any event the SCCO rates do not apply to detailed assessment proceedings.

Is a Change Required?

APIL’s view is that the SCCO rates no longer represent a reasonable hourly rate for the work of fee-earners and should be increased to reflect the true cost of goods and services in 2013, by the calculated figure of 18.25%.

Further to this, APIL stated that they “hoped the Civil Justice Council Costs Committee take into account “real-world inflation” when making their decision. Otherwise, this would ultimately have access to justice implications as it will become increasingly difficult for consumers to find independent solicitors to take on their cases.”

This statement of APIL is only further reinforced by the effect of the much publicised Jackson reforms and challenging economic climate. With the vast majority of P.I cases now falling under Fixed Costs, solicitors firms are already struggling to make a fair profit margin. If the SCCO rates are kept at the same level or even reduced, it would only serve to damage the Personal Injury sector further.

The Civil Justice Council Costs Committee response is expected to be published by the end of this month and we are all waiting with bated breath to see how they approach this thorny issue.

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