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Dyson rules out changes to guideline hourly rates until better data obtained

The Master of the Rolls has ruled out making changes to the guideline hourly rates (GHRs) “at the present time”.

Lord Dyson said he could not accept new GHRs proposed in a report from a Civil Justice Council committee, chaired by Mr Justice Foskett, principally because of a “fundamental shortcoming” in the evidence.

The CJC committee proposals would have seen an overall net reduction in fee income of 2.23% for all qualified fee-earners and 5.14% for all fee-earners.

However, the committee expressed concerns in particular that a Law Society Law Management Section survey and the committee’s own survey suffered from the ‘self selection’ nature of the respondents who replied; they were not randomised surveys.

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The committee also recognised that all of the surveys relied on were based on the responses of a very small part of the large community of civil litigation solicitors throughout England and Wales.

Pending the outcome of the CJC review, the GHRs have remained fixed at the level of the rates promulgated in 2010.

Explaining his decision to reject the principal recommendations, Lord Dyson said efforts needed to be made to obtain “far more comprehensive evidence” than it was possible for the CJC committee to obtain.

The Master of the Rolls said: “The resources available to the committee were exiguous. It has done sterling work. All members, in particular its chairman Foskett J, invested a huge amount of time and effort into the process. The members of the committee and its expert economists all gave their services without charge. I am extremely grateful to every one of them. They produced a report of real quality.

“But the value of such a report ultimately depends on the quality of the data on which it is based.”

Lord Dyson rejected the phasing in of the proposed GHRs suggested by the CJC committee. He also said he had considered and rejected as a temporary measure the previous solution of altering the current rates in line with inflation.

“[This] would be arbitrary and would be difficult to justify in the light of the recommendations (albeit not sufficiently evidence-based) that the average rates should in general be reduced,” he added.

Describing the present situation as “deeply unsatisfactory”, Lord Dyson said: “GHRs are needed to guide summary and detailed assessments of costs. There needs to be public confidence that there is a reliable basis for them.”

The Master of the Rolls said he proposed to hold urgent discussions with the Law Society and the Government to see what steps could be taken to obtain evidence on which the GHRs could reasonably and safely be based.

“I have reached my conclusions after the most careful consideration and with considerable regret,” he added. “But it would be wrong to make decisions as to appropriate GHRs which are not based on sufficiently robust evidence. It is imperative that sound and reliable evidence is obtained.”

There were some recommendations made by the CJC committee that Lord Dyson said he could accept, however.

These were that:

  • there should not be an additional Grade A star; that separate GHR bands specific to specialist fields of civil litigation should not be introduced; and that 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.
  • the criterion for Grade A fee earners should be amended so that it includes Fellows of CILEX with 8 years’ post-qualification experience; and Costs Lawyers who are suitably qualified and subject to regulation be eligible for payment at GHR Grades C or B, depending on the complexity of the work. Both of these recommendations will be introduced on 1 October 2014.

The Master of the Rolls said he could not, however, accept the recommendation to introduce a new Grade E for paralegals. “As the committee acknowledged, there are no comprehensive data in respect of the range of paralegal salaries or costs. In the absence of such data, there is no proper basis for concluding that the recommendation reflects the market. Until reliable evidence of the market is available, Grade D rates will continue to be the starting point for assessment.”

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